Northern Light Health’s outlook upgraded from negative to stable by Standard & Poor’s

BREWER — Standard & Poor’s (S&P) Global Ratings revised its outlook from negative to stable and affirmed its ‘BB-‘ long-term rating for bonds issued by Northern Light Health. S&P stated that the outlook revision to stable reflects improved fiscal 2025 underlying performance ahead of budget results through the first quarter of fiscal 2026, with both periods showing positive cash flow.

“This is good news that a rating agency like S&P has recognized that the efforts we are taking to address significant financial headwinds are moving our healthcare system in the right direction,” shares James Rohrbaugh, CPA, executive vice president and chief financial officer, Northern Light Health. 

S&P stated in a report released that with a robust turnaround plan underway, Northern Light Health’s fiscal 2025 operating performance exceeded expectations, with the system meaningfully lowering its operating loss to near breakeven and creating sufficient cash flow to meet its debt service coverage covenant. The ratings agency did note that Northern Light Health’s weak unrestricted reserves and constrained payer mix including a reliance on governmental payers are challenges but improving volume trends and diversity of assets are positives for the healthcare system.

“We continue to make positive improvements to ensure Northern Light Health continues to deliver high-quality care and is sustainable to address the healthcare needs of Mainers today and for decades to come,” shares R. Guy Hudson, MD, president and CEO.

Northern Light Health’s financial turnaround plan has reduced operating losses from $156 million in fiscal year 2024 to $15 million in fiscal year 2025.  Some other positives noted in the report were Northern Light Health’s success in reducing reliance on contract labor, reducing staff turnover rates and increasing recruitment of nurses.