"Soft" investments require the same careful assessment of capital capacity as equipment and facility purchases. DGA Partners can help your organization develop a comprehensive picture of capital requirements and capacity.
While hospitals and health systems are showing improved operating profitability, a multitude of projects are still competing for limited capital. Healthcare organizations will be investing in previously deferred equipment purchases and facilities improvements, and many will also be making major investments in physician alignment and clinical integration initiatives.
While these integration expenditures may be expensed rather than capitalized, they require the same kind of capital and long-term financial planning as renovating a building, and they need to be considered jointly with more traditional capital initiatives.
DGA can help you evaluate the impact of initiatives that have capital requirements—whether traditional or integrative—and assess their cumulative impact. For each initiative, we consider:
- Anticipated initial outlays / start-up costs
- Funding for working capital
- Ongoing operational subsidies
- Potential incremental revenues from pay for performance and risk contracts, and from market share gains and resultant inpatient and outpatient business
- Associated risk factors
- Return on investment
We evaluate the impact of all initiatives on your organization’s financial profile, considering rating agency benchmarks for key financial indicators. Then we produce baseline financial projections for your organization, and assess the impact on total capital availability.
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