Getting their appetite back. In need of capital, not-for-profit hospitals take advantage of dropping interest rates

After steering clear of the municipal bond market this year, not-for-profit hospitals are being lured back by dropping interest rates. "We're taking advantage of the current market," says Jim Budzinski, left, executive vice president and chief financial officer of WellStar Health System. The Georgia provider's recent bond deal helped erase $4.2 million in interest costs.     

Returns on equity to not-for-profit hospitals: theory and implementation.

It is argued that not-for-profit hospitals can be assumed to generate a return on equity capital due, in principle, to competition in the final product market for hospital services and in the capital market. Practical difficulties in identifying claimants to the net income of the firm, as well as the incentive problems of cost-based reimbursement, suggest that a competitive pricing approach is likely to be the appropriate means to provide a reasonable return on equity for the not-for-profit and the for-profit hospital. Implications of the analysis for the correct discount rate in investment decisions are outlined.     

The empires strike back. Broken promises: Columbia-Presbyterian Medical Center. Ignoring the community's needs: St. Luke's-Roosevelt Hospital Center

In the fall of 1985 in an issue titled "Fighting Back Against the Empires" (Vol. 16, No. 5), Health/PAC reported on the plans of four of New York City's academic medical center "empires" for major expansion. The focus of our coverage was the efforts of two of the communities served by these institutions to ensure that the plans were responsive to their needs. At the time, we were cautiously optimistic that these events were signs that "although the empires still dominate New York City's health care system, they no longer rule unchallenged." In the past six months, the plans of two of these institutions, Columbia-Presbyterian Medical Center and St. Luke's-Roosevelt Hospital Center, warrant another look at the success of the efforts to hold the major medical centers responsible for the welfare of the communities in which they are located.     

Both sides win. Deal to pay off for Columbia and not-for-profit group

While the nation's largest for-profit chain retrenches, members of a not-for-profit healthcare consortium are barreling ahead to solidify their market positions. Columbia/HCA Healthcare Corp. and the eight-member buying group last week disclosed details of an agreement that will result in the sale of 22 hospitals in Columbia's 45-hospital Atlantic Group. The consortium will pay $1.2 billion in cash.