Capital Finance
Hospitals are one of the most expensive commercial structures to build or renovate. Before green lighting a project, hospital executives must confirm that new construction will address existing pressures, as well as attract and serve patients for decades to come.
On Monday, Chicago-based Ventas Inc., the largest U.S. healthcare real estate investment trust by market value, approved a pair of deals that total $3.5 billion.
Hospitals in Georgia have struggled financially in recent years, as uncompensated care costs rose after the recession and the state rejected Medicaid expansion. But one standalone facility decided that affiliation and clinical integration might be the right path to stave off closure.
With the Massachusetts Attorney General granting Partners Healthcare System a long-term lease on life as the dominant provider in Eastern Massachusetts, it's almost certain that the state and its residents will continue to pay above-average healthcare costs.
As the federal government continues to cut reimbursements and private insurers follow suit, many CFOs are having a hard time justifying buying new property to expand services, however, in some cases, it shouldn’t be ruled out.
Increased admissions drove revenue gains for Tenet Healthcare Corporation and Community Health Systems in the first quarter of 2014 compared to 2013. Both for-profit hospital firms appear confident midway through Q2.
Hospitals of all sizes are looking for partners. But the quest to increase market share by acquiring physician groups or other hospitals is drawing critical analysis from regulators, particularly if a merger results in eliminating a competitor.
In years past, many hospitals didn't think twice about buying new property as an investment in the future, confident that they would eventually see a return on their investment. But, as the song says, "the times they are a-changin'."
Michigan-based Metro Health has been able to set itself apart from other community hospital systems in part by its ability to access and leverage capital. Metro's success offers a template for best practices in capital acquisition through strategies such as public issuance of debts and securities.
To quickly make the transition from fee-for-service to value-based care, accountable care organizations must figure out where to invest and take cues from those which have mastered the model.