Some hospitals and health systems are accessing considerable amounts of capital by selling medical office buildings and other properties.
This article first appeared in the January/February 2015 issue of HealthLeaders magazine.
Healthcare organizations have many competing priorities for where to allocate their capital dollars—construction projects, building renovations, equipment upgrades, IT initiatives, and physician employment strategies, just to name a few.
While there is no lack of opportunity to spend the money, raising it is another story as a variety of financial factors converge to create a tough credit environment for many hospitals and health systems.
Weakened credit ratings
"A lot of the revenue pressures we see have really been around since 2008," says Martin Arrick, managing director of the U.S. not-for-profit healthcare group at Standard & Poor's Ratings Services in New York City. "And they are not going away."
Rene Letourneau is a contributing writer at HealthLeaders Media.