Standard and Poor’s Rating Services has upgraded UMass Memorial Medical Center’s outlook from negative to stable, citing improved financial performance and affirmed the Worcester hospital’s BBB+ bond rating on Tuesday.
“The outlook revision to stable reflects material improvement in financial performance with profitable audited 2014 results and continued positive, although thin, earnings in fiscal 2015 to date,” said Standard & Poor’s credit analyst Cynthia Keller.
Standard and Poor’s credited the vision of the hospital’s new management team with turning financial performance around. Changes in labor levels stabilized salary and benefit expenses at approximately 2013 levels, according to S&P. Supplemental funding from Medicaid also bolstered revenue in 2014, and the hospital likely would have posted a loss last year without it, S&P said.
A higher rating may be ahead, according to S&P, once the hospital posts multiyear positive operations and balance sheet ratios improve.
