Two investor rating agencies have given MaineHealth strong marks for its financial stability, even after accounting for $300 million in borrowing to finance a hospital expansion.
The ratings from Moody’s and Standard & Poor’s puts the Portland-based network at No. 3 in New England for financial soundness, after the parent companies of first-place Massachusetts General and second place Yale-New Haven hospitals, according to a statement from MaineHealth.
“This is big news for us,” said John Porter, MaineHealth communications director. “Of course it will help keep the cost of the expansion in control because a good rating equals a good interest rate, but it also puts us in a good position to provide health care in places where it’s hard to provide health care, namely rural communities.”
Moody’s Investors Service assigned a rating of A1 to the first component of approximately $300 million in bonds to be issued by MaineHealth for its $512 million expansion project at Maine Medical Center. Rating agency Standard & Poor’s said this week it would maintain its rating of A+ with a stable outlook for the health care system as the initial bonds are issued.
At a time when many rural health care organizations have struggled, MaineHealth has consistently exceeded its financial goals, largely on the strength of Maine Medical Center, said Bill Caron, CEO and president, in the statement. However, Caron also credited member organizations across the system, noting the rating agencies looked favorably on the work being done at the system’s smaller hospitals under challenging circumstances.
MaineHealth includes Maine Med and 11 other medical centers in Maine and four other health care affiliates.
Porter said the ratings agencies looked at three primary factors in determining their ratings. First, the system’s financial performance, which has historically been strong, has been buoyed by moving some procedures to tertiary care centers where new technologies and high patient volume are cost effective. Secondly, the network has made progress in rural markets where it has shored up its finances, said Porter. And third, the ratings agencies saw the management benefit of coming under the direction of one board.
Last November, all members of MaineHealth voted in favor of unifying into one board to oversee what is the state’s largest health care network. Maine Medical Center, Franklin Community Health, Pen Bay Medical Center, Southern Maine Healthcare and several other community hospitals and health care systems had been working on unifying the system for more than a year.
When complete, one board of trustees will ultimately make decisions instead of 10 separate, independent boards.
Maine Med started its $512 million expansion in May, and expects work to continue for five years. Plans call for a new, 270,000-square-foot building along Congress Street, which would become the hospital’s main entrance, 19 new operating rooms and 128 new single-occupancy patient rooms.
In all, the project would increase the hospital’s footprint by about 25 percent.
Business Editor Carol Coultas can be contacted at 791-6460 or at:
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