Richard L. Clarke, DHA, FHFMA
"May you live in interesting times." This proverb was meant as a curse.
Interesting times are unsettled, challenging, and often harsh and unpleasant. We've all felt unsettled and challenged in recent days as financial markets have swooned and credit markets have frozen. Indicators point to an imminent, deep recession that may already be upon us. These really are interesting times.
The capital markets have become constrained for all organizations. All but the highest rated organizations will find limited appetite for their debt (or equity, if your organization is investor-owned), and liquidity instruments or credit enhancement approaches will probably be unavailable. The credit crunch, if it continues, will starve organizations in need of capital. Deteriorating economic conditions will squeeze cash flows. Philanthropic contributions will likely decrease. What can be done?
First, it is critical that healthcare organizations act responsibly. A lack of responsibility on the part of many (capital markets, government, businesses, and consumers) has contributed to this crisis. As hospitals face difficult decisions in the coming months, they must strive to ensure that their decisions reflect the best interests of their communities. In doing so, hospitals will be able to retain the special position of trust they occupy in their communities at a time when trust in so many other institutions has been eroded.
Second, recognize that we may be at a "tipping point" that will prompt a restructuring of the healthcare industry. Healthcare leaders must consider the future of their organizations. Should they attempt to acquire or be acquired by another entity? Should they change their service orientation away from capital-intensive service delivery? Might they have to consider closure? In the end, these decisions should be tempered with the realities of capital access and effective service delivery, but they also should be focused on what best serves community needs. Trust is enhanced when actions support the caring mission.
Third, remember that others are working on your behalf. The American Hospital Association, for example, is speaking out on the national importance of a stable, functional healthcare system at a time when families and communities are under strain. HFMA is spearheading an effort for healthcare payment reform to ensure that payments reflect the actual costs of providing high-quality, efficient care to your communities, access to care by the uninsured, and the costs of other societal benefits that hospitals provide. HFMA will also support you by carrying the message that dollars invested in healthcare organizations generate a significant return for the communities they serve, and are critical to ensuring that the organizations can continue to fulfill their vital public mission.
Finally, keep doing what you have been doing-striving to ensure that your organizations are providing high-quality, safe services in a cost-effective manner. These interesting times did not originate in the healthcare sector, nor in the municipal bond markets. But the challenges are before us, and you have an important job to do. On our part, we pledge to continue to serve you with the networks, resources, and information you need to perform at your best in these difficult, interesting times.