Capital Finance

Hospitals see a margin advantage as care migrates to the outpatient department

The site-of-care shift toward the outpatient setting increasingly is manifesting in margin per case, according to recent financial data. “While overall margins for both inpatient and outpatient hip and knee replacement surgeries have declined, outpatient procedures now have higher margins than inpatient procedures,” Strata Decision Technology wrote in its Performance Trends Report for Q2 (registration…

Nick Hut August 19, 2024

Private equity investing showing signs of rebound

The Federal Reserve’s plan to begin reducing interest rates in 2024 will likely unleash private equity’s pent-up demand for physician practices and other healthcare services companies. “Everybody wants to transact,” said Bret Schiller, managing director and head of healthcare in corporate client banking at J.P. Morgan. “I think that, at the first rate cut we…

Lola Butcher February 12, 2024

It may be time to terminate legacy interest rate hedges

In a higher-interest-rate environment, improved valuations on fixed payer swap positions may provide an opportunity to terminate those positions. That decision will depend upon considerations related to capital structure goals and impacts on profit-and-loss statements and the balance sheet. Fixed payer swap rates are higher by about 100 basis points so far in 2023, 400…

Chuck Kirkpatrick November 22, 2023

What to expect when a consultant call-in report is required

Amid today’s difficult operating environment, some organizations face the prospect of breaching covenants in their master trust indenture (MTI) or bank loan documents, particularly covenant requirements for debt service coverage or days cash on hand. In the event of a breach, management is typically required to hire an independent consultant to identify areas for financial…

Sarah Dawkins August 25, 2023

Robert Turner: Avoiding a bond covenant default takes aggressive action from a health system borrower

Not-for-profit hospitals and health systems have faced an increasingly difficult operating environment since inflation began to grow in mid-2021. Last year was particularly hard, beginning with a new wave of COVID-19 infections caused by the omicron variant, and followed by mounting expenses, staffing shortages, rising interest rates and investment losses. As a result, Kaufman Hall…

Robert Turner March 30, 2023

Conserving capital expenses through clinical asset reallocation

Michelle Brandt is vice president of physician, ambulatory contracting & credentialing at MedStar Health in Columbia, Maryland About TRIMEDX As an industry-leading, independent clinical asset management company, TRIMEDX helps healthcare providers transform their clinical assets into strategic tools, driving reductions in operational expenses, optimizing clinical asset capital spend, maximizing resources for patient care, and delivering improved safety & protection. This published piece is provided solely for informational purposes. HFMA does not endorse the published material or warrant or guarantee its accuracy. The statements and opinions by participants are those of the participants and not those of HFMA. References to commercial manufacturers, vendors, products, or services that may appear do not constitute endorsements by HFMA.

HFMA December 1, 2022

Inflation threat leads hospital investment managers to proceed with caution

The emergence of price inflation is giving health systems trouble beyond rising supply and wage expenses in the form of negative investment returns and higher borrowing costs.

Nancy Mann Jackson October 5, 2022

Marcus Whitney: Inflation puts innovation pressure on healthcare executives

In the wake of the COVID-19 crisis, healthcare is encountering something it has not seen since the 1980s: severe value network disruption in the form of labor shortages and supply costs.

Marcus Whitney September 1, 2022

Covenant challenges signal need for healthcare providers to chart a path to sustainability

The possibility that an organization might breach debt covenants is a symptom of deeper problems that require an all-hands-on-deck approach within the organization to get back on a sustainable path.

Lisa Goldstein June 23, 2022

Access trapped capital through structured real estate and noncore asset deals

Real estate and noncore assets can represent a significant — and often largely untapped — resource for health systems pursuing any number of financial or operational goals.

Brent Farrell June 1, 2022
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