Knowledge Center Archive


Why Healthcare Organizations Need to Integrate Investment Decisions with Business Objectives

There is little debate that the current and expected future environment is one of the most daunting in history for healthcare finance executives. The challenge to keep their organizations financially viable while facing cost pressure from every conceivable direction is constant. New, innovative strategies need to be developed, and healthcare organizations have never been more dependent on external expertise from their various partners. This perspective touches on the current environment and outlines how an integrated approach to investment management can help address some burdens.

The Current Environment and Impact on Organizational Finances

By the end of February 2011, all three major credit rating agencies had released their yearly outlook on the non-profit healthcare sector. Though the agencies did not agree on the overall outlook for the year, their views on the future are similar in that they have significant concerns. While both Standard and Poor’s (S&P) and Fitch have stable outlooks on the sector for 2011, they both left open the possibility for a downgrade should financial conditions worsen. Unlike the other two, Moody’s issued a negative outlook on the sector for this year, in part because they feel that many of the future concerns have already started to materialize. From an organizational finance perspective, the expectation is that most healthcare organizations face significant challenges in three distinct areas.

Why Healthcare Organizations Need to Integrate Investment Decisions with Business Objectives (PDF)