Financing strategic healthcare facilities: the growing attraction of alternative capital
Zismer, D.K.; Fox, J.; Torgerson, P.
Healthcare Financial Management Journal of the Healthcare Financial Management Association 67(5): 92-99
2013
ISSN/ISBN: 0735-0732 PMID: 23678696 Document Number: 666448
Community health system leaders often dismiss use of alternative capital to finance strategic facilities as being too expensive and less strategically useful, preferring to follow historical precedent and use tax-exempt bonding to finance such facilities. Proposed changes in accounting rules should cause third-party-financed facility lease arrangements to be treated similarly to tax-exempt debt financings with respect to the income statement and balance sheet, increasing their appeal to community health systems. An in-depth comparison of the total costs associated with each financing approach can help inform the choice of financing approaches by illuminating their respective advantages and disadvantages.