CHICAGO, June 29, 2004 - After years of struggling to access capital for hospital improvements, CFOs say they plan to increase spending - upping their capital spending by 14 percent per year, over the next five years, to purchase new medical equipment, upgrade technology and increase capacity, according to research from the Financing the Future project. Yet the capital supply for more than 84 percent of hospital CFOs appears to be decreasing forcing many to ask, where do we go from here? The latest Financing the Future report responds to these findings by focusing on the "how-to's" of capital planning and points to best practices in capital access among the nation's health systems.

This report, "Core Competencies in Capital Planning," is part of Financing the Future - a year-long project led by the Healthcare Financial Management Association in partnership with GE Healthcare Financial Services, a business unit of GE Commercial Finance, with research by HFMA and PricewaterhouseCoopers. This study is based on interviews with industry experts and provides a detailed approach to capital management that is helping many healthcare systems improve their capital access and spending. At the core of this model are three competencies hospitals can use to stretch their limited capital dollars and ensure maximized returns.

"A thorough understanding of the complex processes of capital planning and access is crucial to ensuring that hospitals are well positioned to tap capital sources and that capital spending is prioritized in such a way that furthers operational and strategic goals and necessities," said HFMA President and CEO, Richard L. Clarke, FHFMA.

Competency One: Develop an integrated strategic and capital plan - Capital planning starts with astute strategic planning. To set sound strategic objectives, healthcare organizations must assess the current state of their business, identify strategic opportunities, and prioritize capital expenditures.

Competency Two: Manage the balance sheet - To access capital, hospital CFOs must control their balance sheets by assessing their capital needs, monitoring cash levels and debt capacity, and identifying alternative funding sources. "There is no one source of capital that will always be the ideal solution for all hospitals" said Rick Wolfert, President and CEO of GE Healthcare Financial Services. "Hospitals should continuously evaluate their funding alternatives using detailed and timely information on different capital sources."

Competency Three: As necessary, ensure you are using appropriate advisors: Capital access and planning has become extremely complex, especially with the menu of financing tactics and derivatives available. Hospitals often find themselves needing to use outside advisors to manage this complex process and so need to know how to select the right advisors for the various functions.

The purpose of Financing the Future is to give healthcare professionals the information, strategies, and tools they need to seize the opportunities presented by increasing demand for services as well as innovations in technology and care delivery. Seizing these opportunities requires capital, yet rising costs and inadequate payment make accessing capital more challenging than ever. Financing the Future brings together key stakeholders in the industry to quantify capital need and access, identify best practices for capital planning, provide tools for determining capital need, recommend innovative techniques for capital access, and suggest areas for policy change. This report, Core Competencies in Capital Planning, is based on a meta study, survey, data analysis, and interviews conducted by HFMA and PricewaterhouseCoopers LLP. The study provides a unique analysis of existing data that has not been examined in previous research.

The next report, to be issued in September 2004, will explore government policy and industry implications of future healthcare capital access and spending.

To order this report, or previous reports, contact HFMA at (800) 252-4362, and press option 2, or visit www.financingthefuture.org. Press inquiries should contact Terry Arya at (800) 252-4362, ext. 362, or via email at tarya@hfma.org, or Deia Lofendo at (312) 441-6169 or deia.lofendo@ge.com.

HFMA is the nation's leading membership organization for more than 32,000 healthcare financial management professionals employed by hospitals, integrated delivery systems, managed care organizations, ambulatory and long-term care facilities, physician practices, accounting and consulting firms, and insurance companies. Members' positions include chief executive officer, chief financial officer, controller, patient accounts manager, accountant, and consultant. HFMA offers educational and professional development opportunities, information on key issues, technical data and networking opportunities, with the ultimate goal being to create a more supportive environment in which members do their business. For more information, visit the Association's Web site at www.hfma.org.

Healthcare Financial Services, a unit of GE Commercial Finance, is a provider of capital, financial solutions, and related services for the global healthcare market. With over $13 billion of capital committed to the healthcare industry, GE Healthcare Financial Services offers a full range of capabilities from equipment financing and real estate financing to working capital lending, vendor programs, and practice acquisition financing. With its knowledge of all aspects of health care from hospitals and long-term care facilities to physicians' practices and life sciences, GE Healthcare Financial Services works with customers to create tailored financial solutions that help them improve their productivity and profitability. For more information, visit .

Media Contacts

Deia Campanelli
GE Healthcare Financial Services
312-441-6169