The 'AA' long-term ratings on North Carolina Medical Care Commission's bonds, issued for North Carolina Baptist Hospital Inc., reflect: * Superior liquidity—$356 million of cash and investments, amounting to 352 days' operating expenses, 23 times (x) cushion ratio, and 2x long-term debt; * Very strong earnings and cash flow; * Sustained business growth from management's aggressive, but affordable market penetration strategies; * Winston-Salem's healthy regional economy; * Hospital's distinctive tertiary and quaternary services; and * Long-standing relationship with Wake Forest University's medical school, and faculty-practice plan. Baptist's partnership with the medical school is evolving and strengthening. To more closely align financial incentives, the organizations plan to consolidate administrative support areas, and share a component of operating income. Challenges include: *
