Fitch Ratings issued a report yesterday focusing on the impact of modern facility design in the not-for-profit healthcare industry. In its report, titled Modern Facility Design and Its Impact on Operational and Capital Strategies, Fitch says that a disciplined operational plan, combined with leading evidence-based capital design, should result in tangible improvements in quality, patient safety, information connectivity, operational efficiency, and retention of labor, all of which will be a differentiating factor in hospital credit going forward.
Insufficient capital spending by most hospitals has been one of Fitch’s primary concerns over the past several years. According to Fitch, not-for-profit healthcare institutions must continue to invest in their core operations to ensure the highest value return on their capital investments. Greater scrutiny by state and federal regulators, increasing consumerism, and pay-for-performance programs have all resulted in increased emphasis on improving quality outcomes and patient safety. Additionally, aging hospital facilities have led to a modern building boom that some estimate will top $200 billion in the next 10 years.
Fitch says that hospitals that incur additional debt to fund projects geared at improving healthcare delivery and quality may be able to execute this strategy without harming their credit ratings. In balance with the overall financial health of an organization, Fitch will weigh the favorable aspects of capital improvement projects and care delivery strategies against any increase in debt. Although the effect may not be immediate, a hospital’s ability to both determine the trend of quality and patient safety and influence outcomes through evidence-based design and healthcare IT that fosters better decision making will have a direct impact on efficiency, labor recruitment and retention, and reimbursement, which ultimately influence financial outcomes.
