Capital Finance
Knee replacements now account for over $6 billion in global sales annually, and this number is expected to grow as the population ages and improved accuracy makes younger patients candidates for therapies.
Investor interest in medical office buildings remains very high. Indeed, investors have plenty of access to capital, making it a very good time for owners, including some hospitals, to consider selling such assets.
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.
Competing needs for capital, regulatory pressures, underinvestment and tightening operating budgets threaten U.S. healthcare facilities. But an alternative infrastructure funding mechanism does exist - one that can help deliver projects in a timely and financially responsible manner.
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.
Earnings are down but in line with forecasting, and opportunities for future growth leave executives optimistic.