Credit rating agency ups the outlook for Northern Light Health

Courtesy / Northern Light Mercy Hospital Facebook The recently completed construction project at Portland’s Northern Light Mercy Hospital, seen here, helped convince credit rating agencies to improve their outlook on the parent health care system.

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By Staff

On the heels of multimillion-dollar investments in facility upgrades, Northern Light Health has improved its credit rating from Moody’s Investors Service and maintained a positive one from Standard & Poor’s Global Ratings.

Both agencies said they reviewed the long-term rating on the bonds issued for Maine's second-largest health system, which is headquartered in Brewer.

Moody’s revised Northern Light Health’s outlook to positive from negative but affirmed the system’s Ba1 rating. S&P reaffirmed Northern Light Health’s BBB rating with a stable outlook.

Both ratings indicate vulnerability to changing economic conditions.

Moody’s noted in a report released this week that the Ba1 rating is supported by Northern Light Health’s “strategies to increase patient access and growing brand awareness, which will help offset the impact of the pandemic on volumes.”

The agency said it was reassured that a multiyear improvement plan that builds off of the success of 2021 as well as the completion of the Northern Light Mercy Hospital consolidation project, completed Jan. 4, will help sustain cash flow.

In addition, Moody’s said the positive outlook reflects that “margins in fiscal 2022 will likely be relatively close to fiscal 2021 levels as continued improvement initiatives will offset pandemic-related and labor challenges,” according to a news release.

Northern Light Health senior vice president and chief financial officer, Tony Filer, said the ratings validate Northern Light Health’s commitment to its continued investment in Maine communities.

“Throughout the pandemic, Northern Light Health has stood strong — a united front dedicated to providing our communities with the services they need both close to home and virtually through telehealth,” Filer said. “Our teams across Northern Light Health have risen to the challenge and through hard work, diligence, and innovation continue on our mission to make healthcare work for Maine people.”

In addition to the Portland project, Northern Light Health, headquartered in Brewer, is redeveloping hospitals in Blue Hill, Greenville, Bangor and Ellsworth.

Missions of the projects include modernizing and expanding facilities and services, expanding telemedicine capability, supporting lean workflow, and accommodating new health care technology.

The Northern Light Mercy Hospital consolidation at its expanded Fore River campus was recently completed with a price tag of around $83 million.

Northern Light has implemented other programs as well.

Amid health care's labor crisis, it hiked wages at Northern Light Eastern Maine Medical Center in Bangor last November.

A $250,000 grant awarded last fall by pharmaceutical giant Pfizer Inc. (NYSE: PFE) and the Boston-based Institute for Healthcare Improvement is aimed at improving Mainers' health care access.

Northern Light Health is a network of health care providers throughout Maine, including Eastern Maine Medical Center in Bangor and nine other hospitals. Headquartered in Brewer, the system operates a total of over 100 facilities and employs more than 12,000 people.