Fitch Affirms Baystate at “A+”; Outlook Remains Negative

Springfield, MASS. – Fitch Ratings has affirmed Baystate Health’s credit rating of A+ with the Rating Outlook remaining Negative. Fitch ratings are used by investors to make decisions about investments, lending, and other financial arrangements. Fitch, one of the “Big Three” credit rating agencies, uses a scale of AAA to D to indicate likelihood of default. An “A” rating reflects high credit quality with a low expectation of default.

Fitch’s rating affirmation reflects Baystate Health returning to a positive operating margin in FY25 after several years of operating losses, and Fitch’s expectation for continued progress as the system’s transformation plan matures. The affirmation also reflects Baystate's essential role as the leading provider in Western Massachusetts, with an academic and community physician network, integrated health plan, strong share in key specialty lines (heart and vascular, neuroscience, oncology, orthopedics, and surgery), and safety net provider for higher-acuity services (trauma, children’s hospital, women’s health, and behavioral health).

The Outlook remains Negative despite demonstrated improvement, as Baystate looks to steadily grow its balance sheet, especially Days Cash on Hand of about 107 days to solidly above 130 days. FY25 results outperformed budget with an operating EBITDA (earnings before interest, taxes, depreciation, and amortization) margin of 3.2%, supported by strong volumes, lower labor spend, and other transformation initiatives. Looking forward, operating EBITDA is budgeted for 5% in FY26 and then expected to stabilize around 7% starting in FY27.

“I am immensely proud of the tough work of our incredible team members to rapidly turn around performance in just a year, especially greater financial stability and resilience,” said Peter D. Banko, President & CEO of Baystate Health. “The direct feedback from Fitch Ratings – specifically the continued Rating Outlook of Negative – is a critical moment for us together. Despite Medicare, Medicaid, and other headwinds, we are being asked to advance beyond workforce efficiencies and do more (and do it faster) with physician access, hospital throughput, Health New England and provider network integration, the physician enterprise, supply chain, pharmacy, and revenue cycle improvements.”