Moody's affirmed hospitals operator LifePoint Health Inc.'s Ba2 corporate family rating with a stable outlook.
The rating agency said LifePoint's rating is supported by its competitive presence in the nonurban markets, along with a track record of stable operating performance and moderate financial policies.
Moody's said the Brentwood, Tenn.-based company's rating is constrained by industry headwinds, including weak admission trends, pressures on Medicaid funding and more aggressive actions by private insurers to reduce healthcare costs.
LifePoint, which is witnessing flat earnings due to these headwinds, has a high level of committed capital expenditures that will weaken its free cash flow and interest coverage metrics over the next 12 to 18 months, according to Moody's.
Moody's expects reduced capital expenditures, along with earnings growth, to support improved free cash flow in 2019-2020.
