Hospitals Hit Hard By Bond Market

According to a recent article in the Minnesota Star Tribune, two major Minnesota hospitals are facing a serious financial situation. The weekly interest payments on their outstanding debt are soaring, putting them in a credit squeeze. This is attributed to investors moving away from bonds backed by insurers who face substantial exposure resulting from the subprime mortgage market. Consequently, some bonds aren't being bought and other deals are being done only at higher interest rates.

This growing trend puts more pressure on CFO's to refinance their debt and add other financing methods to their fiscal strategies. One such tool is medical accounts receivable funding. It utilizes a non-performing asset, a healthcare provider's accounts receivable, to generate debt-free working capital. Since the costs of this funding program do not fluctuate with interest rates, healthcare executives can plan their financial strategies based on a predictable cash flow.

Medical Accounts Receivable (MAR) Funding As a Working Line Of Credit

MAR Funding can be used as a "reserve working capital line," for medical providers. The flexibility inherent in this kind of finance allows providers to use their third party insurance claims (already billed and awaiting payment) to fund daily needs as they occur. Funds for such use can literally be placed in the provider's account and can be available for use within 48 hours of such deposits.

Many medical providers experience "highs" and "lows" in cash flow as a result of insurance and governmental payors protracting payments for a litany of reasons. Paying for supplies, payroll and other daily operational expenses found in medical practices can be easily accomplished by opening an account with a MAR Funding company, specifically Sun Capital HealthCare, Inc. Not all financial institutions offer the ability to use their MAR Funding as a working line of credit. Providers must consider the flexibility offered by the funding source chosen. The ability to pick and choose when and what to finance can reduce costs of funding and allows the provider to "customize" their funding solutions.