A financial fitness regimen for improved capital access: here are five steps you should take now to improve your hospital's access to capital

Healthcare Financial Management, June, 2005 by Kevin T. Ponton

The success stories will be accompanied by testimony of their administrators and board members about the ongoing nature of the challenge to continue their success over the life of their new financing deals (loans or bonds). How? By expanding their strategic horizons. How else would they be able to deal with the possibility (albeit somewhat remote) of an end to the cost-based payment bonus they have been receiving?

By the time you read this column, the country's largest hospital investment bank will have opened another major channel of capital specifically for eligible rural hospitals, the first of its kind, ever. Uncertainty, risk, and long-term capital markets being what they are, eligibility for this new program will inevitably be a function of which hospitals have, or are capable of developing, the strongest financial fitness regimens.

FINANCING THE FUTURE

HFMA's Financing the Future series began the process of highlighting strategies hospitals and other providers could use to improve access to capital. HFMA now has launched Financing the Future II. Its cornerstone principle is that adherence to a rigorous corporate finance process is critical to a hospital's ability to increase access to capital, make wise investments in the organization's future, and improve financial performance. To view the reports, visit www.financingthefuture.org.

Kevin T. Ponton is president, SprainBrook Group, Hawthorne, N.Y. Questions or comments about this article may be sent to him at kponton@mac.com.