Even with a huge economic bailout package having passed, it seems investors still haven't gotten their confidence back, which has left the financial markets at something of a standstill. As you can imagine, this is bad news for tax-exempt hospitals and health systems that depend on bonds for essential financing, as they've been under the screws for quite some time.
Here and there, local and state officials are attempting to help. For example, In Wisconsin, the authority that issues bonds for tax-exempt health systems is considering rolling out four more in order to provide some relief. Still, even state authorities themselves are facing hardships. Take New Jersey's Health Care Facilities Financing Authority, which saw their bond rates spike to 8 percent before settling down to 4.5 percent.
Worse still, hospitals and health systems have been locked out of the markets for long term bonds with fixed interest rates ever since the investors began panicking last month. Even if investors are finally calming down, it may be a while before healthcare borrowers can recover from this panic.
To learn more about this crisis:
- Read this Modern Healthcare piece (reg. req.)