Investor Relations During COVID-19: What Healthcare Leaders Should Know

Even before COVID-19, regularly communicating a healthcare organization’s objectives, performance, strengths, and challenges—whether financial or operational—was critical to establishing trusted relationships with the investor community. Now, with uncertainty going forward due to COVID-19, proactively communicating with investors should be a top-of-mind strategy for health system leaders.

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Given the financial impact of the pandemic on health systems, now is a good time for healthcare leaders to consider: What information does the investor community—investors, lenders, credit support providers, and rating agencies—wish to see from healthcare providers in the current environment? How can healthcare leaders most effectively use investor communications to convey the impact of COVID on their organizations and their plans for recovery?

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Communicating with investors in an uncertain economic environment can be a daunting prospect for healthcare leaders. Some fear that oversharing information could result in a decline in credit ratings and more restricted access to capital or that uncertainty around the future impact of COVID-19 could lead them to provide inaccurate forward-looking statements. From the perspective of rating agencies, however, a highly transparent investor relations approach can bolster confidence in a healthcare organization—particularly during periods of economic uncertainty. As Lisa Goldstein, Associate Managing Director, Moody’s Investors Service, shared during a recent panel discussion, rating agencies are especially interested in hearing about the challenges health systems have encountered during the pandemic—such as supply chain—and the ways in which systems are responding and identifying new opportunities for cost savings. As always, rating agencies and credit analysts would rather know that borrowers are aware of challenges and have a plan to address them.

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Hammond Hanlon Camp LLC (“H2C”) and Hall Render recently analyzed dozens of COVID-19-related disclosure statements from health systems to understand health systems’ approach to investor relations during the pandemic. These communications range from postings to EMMA and other voluntary disclosure actions as well as information provided via quarterly financial statements. Some organizations provide a great deal of information, as shown in the exhibits that follow, while others have provided less detailed information. Below, we highlight key trends as well as our recommendations.