Optum partner Northern Light’s outlook revised to negative as operating results remain weak

Brewer, Maine-based Northern Light Health, which agreed in January to transfer 1,400 of its employees to healthcare provider Optum, cut its outlook from stable to negative amid weak operating results in recent years, S&P Global reported Feb. 15.

The rating agency has retained the ‘BBB’ rating on various Northern Light bonds. Management has initiated a number of initiatives to strengthen the system’s financial profile and make the rating credible, S&P said.

However, a further downgrade cannot be ruled out in the future.

“The negative outlook includes our view of permanent operating losses and significantly weaker unrestricted reserves, which provide limited flexibility during this period of earnings and cash flow stress,” S&P said in a statement. “Unless NLH shows a trend towards financial improvement, we view a downgrade as a possibility. In addition, the success of management’s recovery efforts and new partnerships will be key rating factors.”

Northern Light Health posted a $178 million loss in fiscal 2022.

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