Four healthcare executives discuss how providers are focusing more on liquidity in the wake of reimbursement models born out of shaky financial, regulatory, and political environments.
This article first appeared in the November 2014 issue of HealthLeaders magazine.
Health systems are positioning themselves for new reimbursement models amid shaky financial, regulatory, and political environments. The uncertainty leaves providers more focused on liquidity. Many have found medium-term capital an attractive alternative in their strategic capital formation to fill the gap between short- and long-term investments. Matching credit term length with the useful life of assets such as electronic medical records systems, clinical integration with outpatient care settings, and infrastructure enhancements (e.g., renovations, energy projects) presents many economic, accounting, and compliance benefits.
HealthLeaders: If the top goal for any healthcare organization is to improve the health of their community, Goal 1-A might be to marshal its financial resources such that it's able to continue to do that work. How difficult is that given the upheaval we're seeing?
William M. Snapp III: It's very difficult to estimate the impact of certain facets of reform. One example is the decrease in disproportionate share payments. You can project the impact, but trying to incorporate that impact into your budget and make sure your costs are in line is very difficult. And then to communicate to your nonfinancial people that you have to control your labor cost is a challenge as well.
Philip Betbeze is the senior leadership editor at HealthLeaders.