Moody’s Investors Service last week affirmed Fairfield Medical Center’s Baa2 rating and revised its outlook to stable from negative, citing its sustained operating improvements. The action affects $34.2 million of rated debt.

The outlook shift reflects FMC’s ability to maintain operating performance in fiscal 2010 despite concerns about operating risks associated with the increasing costs of employing more physicians and the potential for inpatient and ER visit volume erosion from a joint venture project with Mount Carmel Health System.

“In addition, two years of improved operating cash flow generation and investment gains have resulted in growth in unrestricted cash and investments and better debt coverage,” Moody’s wrote.

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