Hospitals will have myriad credit options in 2015

Hospitals' access to credit is unlikely to change significantly in the new year, according to Healthcare Finance News.

Local and national capital sources have similar levels of availability, so hospital chief financial officers will likely have some leeway as they search for the best possible rates, according to the article.

"Financially stable, well-run hospitals should have access to cost effective capital next year," said Adam Buchanan, vice president of sales and trading at Ziegler, a Chicago banking firm specializing in healthcare. 

Interest rates will likely stay low for the foreseeable future, possibly as late as after the 2016 elections, but there have still been some recent changes. For example, lenders can fund higher levels of "soft capital," meaning hospitals have increased leverage to raise capital for projects backed not by collateral but by the organization's good credit, such as software or system implementation.

The proliferation of electronic health records (EHRs) has increased lender willingness to help fund information technology infrastructure, Mark Bogen, senior vice president and CFO at South Nassau Communities Hospital in Oceanside, New York, told Healthcare Finance News.

Although most hospitals have the funds to recover from the high cost of EHR implementation, the expenditures can be a major threat to hospital credit ratings, especially when the process costs more than initial projections, FierceHealthFinance previously reported. Furthermore, income from EHR meaningful use payments could disguise weak medical growth, which means sound finances are a must to afford the required investment for implementation.  

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- here's the article

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