Implications for Smaller Hospitals It is particularly important for management teams of smaller hospitals to be closely involved with financing strategies that include funding from state or local governments or from philanthropic sources. Maintaining strong relationships with these sources can help maximize the capital received and manage its structure and timing.
The stakes are high. Whether hospitals are strong or not so strong, their executives cannot afford to
take a wait-and-see approach to capital access. To ensure capital options in the new health care
environment, leadership teams must understand available options for accessing external capital. Doing
this requires that they be committed to building an in-depth understanding of their current strategic and
financial position, preserving the strength of their credit position, identifying and evaluating the broadest-possible funding sources, securing the best-fit options through involving the right experts, and staying
closely connected to their capital position by monitoring existing funding and new opportunities.
Winning organizations will take a proactive approach.
1. Standard & Poor’s: Tough Times Take a Toll on Credit Quality of U.S. Not-for-Profit Health
Care Sector. New York, August 25, 2008.
2. Direct communication with Lisa Goldstein and Beth Wexler of Moody’s Investors Service:
3. USDA Rural Development: Community Facilities Loans and Grants.
www.rurdev.usda.gov/rhs/cf/brief_cp_direct.htm (accessed October 12, 2010).
4. Kaplan, H. L., Singh, A. R.: “The Opportunity and “Duty” to Restructure Nonprofit Health Care
Debt.” ABI Journal, June 2009.
5. Financing the Future II: Report 5—Strategies for Financially Distressed Hospitals. Westchester,
IL: Healthcare Financial Management Association, May 2006.
A Guide to Financing Strategies for Hospitals