Why Is Access to Capital Crucial for Not-For-Profit Hospitals?
Providing care in a hospital setting has always been a capital-intensive endeavor. However, the need for inexpensive capital has never been greater due to three reasons. Hospital facilities are rapidly aging. In 1990, the average physical plant was 7.9 years oldi. Despite the flurry of recent construction activity, the average age has increased 25 percent to 9.9 years old.ii Older facilities pose several challenges to the healthcare system as they: • Are more expensive to maintain, driving up the cost of care • Need to be rebuilt or renovated to accommodate advanced diagnostic and treatment equipment which physically requires more space than earlier modalities • Lack the capacity in many parts of the country to address the healthcare needs of baby boomers Second, constant advances in diagnostic and treatment technology require hospitals to invest large amounts of capital in new equipment to ensure that patients have access to the most up-to-date care available. Finally, hospitals are m
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