Health System Capital Planning: Not for the Faint of Heart

Hospital leaders are making capital decisions in one of the most challenging financial environments in recent memory. Hospital credit has deteriorated as hospitals contend with rising labor costs, cybersecurity concerns, and ongoing changes to healthcare reimbursement and funding. Yet despite these pressures, capital spending continues to climb, raising important questions about the processes health systems use to prioritize investments and manage scarce capital resources.

At the same time, the financial assumptions that once supported major capital projects are shifting. Investments that once seemed unquestionably sound may now introduce new financial and operational risks.

In this HFM Magazine article, BRG’s Peter Chadwick and Brian Fisher, together with Jeff Goldsmith, president of Health Futures, Inc., and an independent health strategy and policy advisor, explore how changing market conditions are altering the economics of capital investment for hospitals and health systems.