Financial reserve. Hospitals leery of credit lines, factoring receivables
Edwards, D.E.; Hamilton, W.C.; Hauser, R.
Healthcare Financial Management Journal of the Healthcare Financial Management Association 45(10): 82; 84 86-88
1991
ISSN/ISBN: 0735-0732 PMID: 10145513 Document Number: 377503
Opening lines of credit and factoring (selling) accounts receivable are two ways to generate operating cash that non-healthcare industries have long used successfully. A recent survey of hospital officials across the nation, however, showed these techniques are used infrequently in health care. Among the 281 hospitals responding: Only 45 percent use lines of credit; Less than 5 percent pursue accounts receivable factoring; and Only 12 percent plan to begin factoring receivables in the future. As hospitals look for ways to offset depleted cash reserves, these percentages may increase.