EMHS

S&P’s Bond Rating and Outlook for EMHS is Positive

3/19/2014


EMHS long-term rating affirmed
 
Brewer, Maine – (March 19, 2014) – A report by Standard & Poor’s Rating Services affirms a BBB long-term rating, and notes that the outlook for EMHS is positive. The S&P report provides a current financial assessment of EMHS as well as a perspective of the organization’s future financial outlook.
 
Derrick Hollings, senior vice president and chief financial officer of EMHS, says the S&P report, released this month, affirmed its BBB long-term rating on the $143.9 million series 2013 bonds issued by the Maine Health and Higher Educational Facilities Authority for the EMHS Obligated Group. The report highlights the strengths and threats to EMHS’ credit rating which includes the October 2013 acquisition of Mercy Hospital in Portland, Maine, and Eastern Maine Medical Center’s modernization project. Hollings adds the report also highlights the successful integration of Mercy into EMHS, “including a lower Mercy operating loss than expected during the first quarter of fiscal year 2014, as well as the EMMC construction project being on time and on budget.”
 
EMMC plays a critical regional healthcare role; with thousands of Mainers relying on EMMC for primary, specialty, and acute care. On any given day, about half of the medical center’s inpatients come from outside the primary service area. The S&P report recognizes EMMC’s strength in the market, but notes weak earnings during the first quarter of fiscal year 2014. Deborah Carey Johnson, RN, EMMC president and CEO, and senior vice president of EMHS says while EMMC is not currently where it would like to be with its FY 2014 budget, there are significant growth goals in place. “Eastern Maine Medical Center is very strong financially. We have a talented team focused on the important mission of organization and we expect to end the year with a positive bottom line.”

M. Michelle Hood, FACHE, president and CEO of EMHS says while it might be easy to focus on the work that needs to be done; there is plenty of good news in the S&P report. “EMHS is outperforming the market with days cash on hand, and the operating margin is nearly doubled by the earnings before interest, depreciation and amortization, or EBIDA.” Hood also notes that the report indicates EMHS is carrying a much lower debt load compared to similarly S&P rated healthcare systems, “This is a strong indicator of tight management of both the income statement and balance sheet over many years.”
 
The full report can be found on the EMHS website at: (http://www.emhs.org/Document-library/Reports/RatingsDirect_Analysis_1274089_03_12_2014_16_11_45.aspx.)
 
About the Modernization Project
• EMMC is licensed by the State of Maine to operate 411 inpatient beds, yet currently has only enough space to operate about 350 beds
• Surgical suites will be updated. Adult inpatient and surgery areas are more than 35 years old and not designed to support modern surgical technology
• Private rooms and departmental adjacencies will enhance care efficiency and quality, patient safety and privacy, and comfort.
 
About EMHS
EMHS, based in Brewer, Maine is an integrated health delivery system covering approximately 70 percent of the land mass in the state and serving more than 40 percent of the state’s residents. The system’s broad range of services includes eight hospitals, physician practices, long-term care facilities, home health and hospice, and ground and air emergency transport services.
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