Friday May 9, 2008
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Financially Distressed Hospitals
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Financially Distressed Hospitals

Whether under for-profit or non-profit ownership, hospitals are complex business enterprises which require bottom line cash flows to support operations. In some cases, declines in hospital operating performance result in cash flow losses which can lead to bankruptcy and/or closure of hospital entities.

To assist hospital management and bankruptcy courts in dealing with such challenges, we offer assistance in evaluating underlying reasons for distressed hospital operations and in assessing potential for restructuring/redirecting operations to achieve recovery of operational viability and cash flows.

By assessing factors such as those outlined at right, we offer guidance to optimize potential for a turnaround in performance and a return to profitability. Where a turnaround is not possible, we will so advise. In such cases, we offer guidance as to the optimal alternative use and value of the subject hospital property – whether for an alternative medical use; conversion to a non-medical use; etc.

Financially Distressed Hospitals Financially Distressed Hospitals Financially Distressed Hospitals

If you are making decisions pertaining to operationally distressed hospital properties, call us.

We can help you.
Call us toll free (800) 262-7044.


Your project is our priority.


Hospital Healthcare Property Appraisal Financially Distressed Hospitals
Hospital Healthcare Property Appaisal Consulting

Reasons for distressed hospital operations may relate to internal and/or external factors.

Internal factors leading to or contributing to the financial distress of hospitals may include:

  • Dated/obsolescent facilities
  • A mix of healthcare services which is out of line with market demand
  • Excessive cost structure
  • Human relations issues (conflicts between hospital management and physicians)
  • Etc.

External factors leading to or contributing to the financial distress of hospitals may include:

  • Increased competition via new hospital entrants/players in market
  • Increased competition via the introduction of newer more appealing hospitals or other medical facilities by one or more existing competitor hospitals
  • Increased competition from outpatient providers (surgery centers, diagnostic centers, urgent care facilities, etc.) draining profits from acute care hospitals
  • Decline in customer/patient population
  • Decline in customer/patient population’ income levels
  • Decline in third-party payer reimbursement rates – due to changes in government policy / regulation
  • Etc.
Hospital Healthcare Property Appaisal Consulting
 
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