The rating on New Jersey Health Care Facility Finance Authority's bonds, issued on behalf of the West Hudson Hospital Association, reflects adequate financial operations, good debt service coverage, and a strong cash position, offset by weakened inpatient and outpatient volume. The outlook revision reflects the January 1997 affiliation with Saint Barnabas Health Care System and subsequent improved operations and utilization as reflected in the nine-month interims. West Hudson Hospital, located in the Newark, N.J. service area, experienced inpatient admission and outpatient visit decreases in recent years. As a result, net patient revenues dropped 11% from 1994-1996. In addition, the hospital found it difficult to negotiate many managed care contracts since obstetrics and pediatric services are not offered. The affiliation with
