Moody's applauds UMass Health financials, Epic launch

Grant Welker UMass Memorial Medical Center in Worcester.

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By Zachary Comeau

Because of its four years of financial improvement and launch of the Epic electronic medical records system, UMass Memorial Health Care’s revenue bond rating from Moody’s has been upgraded from Baa3 to Baa2, according to the healthcare organization.

The improved rating gives the service providers the flexibility to make more strategic decisions on investments and improvements, the health care system said in a press release Wednesday. The improved rating reflects a similar decision made in December by Fitch Ratings, which praised UMass Memorial's financial turnaround since CEO Eric Dickson took over.

For the Moody's rating, the healthcare system credited its employees and more than 50,000 ideas submitted to improve processes and procedures.

The rating agency pointed to three key factors for the upgrade: four years of financial improvement, stable Medicaid Supplement Funds and the launch of Epic, a new electronic health records system.

The rating boost affects about $100 million of outstanding rated debt issued through the Massachusetts Development Finance Agency, Moody’s said on Tuesday.

The upgrade reflects the system’s generally steady operating performance, and will improve moderately after the launch of Epic, Moody’s said.

“The Baa2 rating further reflects the health system's large size, key role as an academic medical center and safety net provider in central Massachusetts, and close working relationship with the University of Massachusetts Medical School,” Moody’s said.

Challenges for the system, according to Moody’s, include a high-cost structure, above-average Medicaid exposure and above-average adjusted leverage and a large unfunded pension liability.