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ISELIN, NJ – Health systems looking to expand or make capital improvements during these tough economic times often need financial assistance that goes beyond a simple loan. With that in mind, Siemens Financial Services is expanding its healthcare financing department to include project, construction and permanent real estate financing, as well as asset-based and cash flow-based term loans.
"These additional capabilities are a direct response to the tightened credit and bond markets affecting healthcare providers' access to capital over the last few years," said Ted Drake, senior vice president and general manager of healthcare finance for SFS, an Iselin, N.J.-based subsidiary of the German electronics and IT giant, in a recent press release. "Adding a dedicated team to provide project financing, construction and permanent real estate financing, along with traditional equipment financing, enables healthcare providers to invest more easily in expansion projects."
"Expanding our healthcare finance platform creates a new and much-needed source of capital for healthcare providers," added Kirk Edelman, SFS' president and chief executive officer. "With these additional offerings, they can have more options to pursue their strategic initiatives and continue providing and improving the quality of healthcare in their communities."
One of the first healthcare providers to benefit from these expanded services is Bucks County Specialty Hospital in Bensalem, Pa. The 65,000-square-foot hospital, which opened in 2009 through a partnership with the Rothman Institute and Nueterra Healthcare, features six fully equipped operating rooms. SFS recently provided the hospital with a $17.2 million credit facility to acquire medical equipment and make improvements to the building.
"Bucks County Specialty Hospital is committed to providing patients with quality healthcare in a patient-focused setting," said hospital Chairman Mike West. "Siemens' support of the hospital as we grow and add new services will help us fulfill our mission. We look forward to having an ongoing relationship with Siemens."
SFS is one of a growing number of financial service and planning companies that have added new services to help the healthcare industry, which is facing the dual threat of a fluctuating economy and federal pressure to adopt meaningful reforms. Last July, the Broadlane Group, a Dallas-based provider of cost-management services, launched Capital Equipment Solutions, designed to help healthcare providers manage their capital equipment life cycle. And last March, MedAssets, an Atlanta-based developer of spend management and revenue cycle solutions, launched the MedAssets Construction Services program to help providers manage new construction projects from design through completion.
According to the Camden Group, access to capital will be one of the top trends in healthcare for the coming year. The New York based consulting firm predicts that sources of capital will remain elusive this year, thanks in part to stringent rules by lenders and credit rating agencies, and will force providers to seek out partnerships with physician groups or other hospitals and work on strategies to develop more market share.