Philadelphia-based Thomas Jefferson University has undergone a credit downgrade with cash flow margins expected to stay low for "several years," Moody's said March 30.
The 18-hospital system, which also operates 10 colleges located primarily on two campuses in Philadelphia, is expected to stabilize its days of cash on hand to about 140 but debt will remain high, Moody's said. The outlook is stable.
The downgrade to "A3" from "A2" also includes the Thomas Jefferson college system. Labor costs and an ongoing shift to outpatient care are specific factors for the health side of the system to be aware of, Moody's said.
More positive aspects include a new management team, which is expected to drive efficiencies, as well as the system's leading market position and growth opportunity in its health insurance arm.
Recent appointments at Thomas Jefferson include new Jefferson Health CEO Joseph Cacchione, MD, and CFO John Mordach, who took the reins March 20.