It may be time to terminate legacy interest rate hedges
In a higher-interest-rate environment, improved valuations on fixed payer swap positions may provide an opportunity to terminate those positions. That decision will depend upon considerations related to capital structure goals and impacts on profit-and-loss statements and the balance sheet. Fixed payer swap rates are higher by about 100 basis points so far in 2023, 400…
What to expect when a consultant call-in report is required
Amid today’s difficult operating environment, some organizations face the prospect of breaching covenants in their master trust indenture (MTI) or bank loan documents, particularly covenant requirements for debt service coverage or days cash on hand. In the event of a breach, management is typically required to hire an independent consultant to identify areas for financial…
Robert Turner: Avoiding a bond covenant default takes aggressive action from a health system borrower
Not-for-profit hospitals and health systems have faced an increasingly difficult operating environment since inflation began to grow in mid-2021. Last year was particularly hard, beginning with a new wave of COVID-19 infections caused by the omicron variant, and followed by mounting expenses, staffing shortages, rising interest rates and investment losses. As a result, Kaufman Hall…
Conserving capital expenses through clinical asset reallocation
Michelle Brandt is vice president of physician, ambulatory contracting & credentialing at MedStar Health in Columbia, Maryland About TRIMEDX As an industry-leading, independent clinical asset management company, TRIMEDX helps healthcare providers transform their clinical assets into strategic tools, driving reductions in operational expenses, optimizing clinical asset capital spend, maximizing resources for patient care, and delivering improved safety & protection. This published piece is provided solely for informational purposes. HFMA does not endorse the published material or warrant or guarantee its accuracy. The statements and opinions by participants are those of the participants and not those of HFMA. References to commercial manufacturers, vendors, products, or services that may appear do not constitute endorsements by HFMA.
Inflation threat leads hospital investment managers to proceed with caution
The emergence of price inflation is giving health systems trouble beyond rising supply and wage expenses in the form of negative investment returns and higher borrowing costs.
Marcus Whitney: Inflation puts innovation pressure on healthcare executives
In the wake of the COVID-19 crisis, healthcare is encountering something it has not seen since the 1980s: severe value network disruption in the form of labor shortages and supply costs.
Covenant challenges signal need for healthcare providers to chart a path to sustainability
The possibility that an organization might breach debt covenants is a symptom of deeper problems that require an all-hands-on-deck approach within the organization to get back on a sustainable path.
Access trapped capital through structured real estate and noncore asset deals
Real estate and noncore assets can represent a significant — and often largely untapped — resource for health systems pursuing any number of financial or operational goals.
Paul Keckley: PE investing trends healthcare finance leaders need to watch
As healthcare finance professionals in traditional health settings focus on managing their organizations’ capital commitments and evaluating direct investments in private equity funds to enhance non-operating income, they should monitor two megatrends, involving “Big private equity” and special-purpose acquisition companies (SPACs).
Eric Jordahl: Preparing health system balance sheets for the journey to normalization
The Federal Reserve's recent signal that it will transition to a tighter monetary policy is an indication that the organization and the economy have entered a new, more stable stage.