Credit rating agencies reaffirm strength of MaineHealth
June 30, 2020
FOR IMMEDIATE RELEASE
Contact: John Porter
207-329-8594 / firstname.lastname@example.org
Portland, Maine – S&P Global Ratings and Moody’s Investors Service each endorsed MaineHealth with strong credit ratings last week despite the toll that COVID-19 has taken on the healthcare system in 2020.
On Wednesday, S&P reaffirmed its A+ rating for existing bonds as well as for the organization as an issuer of new bonds. On Friday, Moody’s offered a similar opinion of MaineHealth’s credit worthiness, reaffirming its rating of A1-stable. Because of the impact of COVID-19 on the hospital system’s finances, S&P did change its outlook rating from “positive” to “stable,” noting that “revenue pressure and market volatility stemming from COVID-19 has dampened financial performance” in the current fiscal year. This revised outlook, however, is stronger than S&P’s overall “negative” outlook for the entire healthcare industry.
“Obviously, the last four months have been challenging,” said Al Swallow, MaineHealth’s Chief Financial Officer. “These reports affirm our belief, however, that we remain well positioned to support our patients, care team members and our communities in the years ahead.”
Earlier this year MaineHealth, which consists of nine local health systems in Maine and Carroll County, N.H., said that it expected lost revenues related to the coronavirus pandemic to be around $400 million for the 2020 calendar year, assuming that there is not a dramatic increase in infections in its service area.
MaineHealth has received approximately $110 million from the government in pandemic relief funds and hopes it is eligible for about $40 million more, but that still leaves it with expected COVID-19 related revenue losses of approximately $250 million for the year.
Fortunately, as noted in the credit rating reports, MaineHealth entered the crises in strong financial shape, and it is expected that, once the pandemic has passed, the system will return to financial health. Already, MaineHealth has started to bring back services that were idled in March as part of its pandemic planning, putting in place extensive safety protocols on behalf of its care team and patients.
Because of its financial strength, MaineHealth has committed to maintaining the jobs and pay of its employees through the current fiscal year, even for those employees who had been idled due to the earlier cancellation of elective and non-urgent procedures. Going forward, MaineHealth has said it will continue to prioritize its care team members as it works through the crisis.
Still, MaineHealth expects that it will have to manage growth in its workforce and scrutinize future capital investments carefully to make up for the financial impact of the pandemic. The healthcare system is hoping the federal government steps forward with additional relief funds to take the pressure off its local hospitals, especially those in rural communities where delivering care is already financially challenging.
In their reports, the rating agencies singled out MaineHealth’s decision two years ago to consolidate its member hospital organizations in Maine under a single Board, management and financial structure. The agencies noted that this unification of its members has enabled the system to work through the COVID-19 crisis and remain strong and stable. S&P also noted that the merger earlier this year of Mid Coast-Parkview Health in Brunswick into MaineHealth added to the system’s strength.
“Our vision is “Working together so our communities are the healthiest in America,” said Swallow. “That has never been more important for the 1.1 million people we support in our local communities. Together, if all of us do our part to fight this virus and support one another, we are confident that our future remains a bright one.”
MaineHealth is a not-for-profit integrated health system consisting of nine local hospital systems, a comprehensive behavioral healthcare network, diagnostic services, home health agencies, and more than 1,700 employed and independent physicians working together through an Accountable Care Organization. With close to 22,000 employees, MaineHealth is the largest health system in northern New England and provides preventive care, diagnosis and treatment to 1.1 million residents in Maine and New Hampshire. It includes Franklin Memorial Hospital/Franklin Community Health Network in Farmington, LincolnHealth in Damariscotta and Boothbay Harbor, Maine Behavioral Healthcare in South Portland, MaineHealth Care at Home in Saco, Maine Medical Center in Portland, Memorial Hospital in North Conway, N.H., Mid Coast-Parkview Health in Brunswick, NorDx in Scarborough, Pen Bay Medical Center and Waldo County Hospital in Rockport and Belfast, Southern Maine Health Care in Biddeford and Sanford, Spring Harbor Hospital in Westbrook and Stephens Memorial Hospital/Western Maine Health Care in Norway. MaineHealth Affiliates include Maine General Health in Augusta and Waterville, New England Rehabilitation Hospital in Portland and St. Mary's Regional Medical Center in Lewiston. It is also a significant stakeholder in the MaineHealth Accountable Care Organization in Portland.