Capital has grown harder and harder to come by in an increasingly competitive healthcare market, said Hector Boirie, chief capital management officer for the Sisters of Mercy Health System, as he explained how the large Catholic system will no longer rely on investment income to fund capital needs to attendees at the Healthcare Financial Management Associations Annual National Institute in Seattle.
Catholic system official outlines shift in use of investment income
Starting in the Sisters of Mercy fiscal 2010, which begins July 1, the system will depend on operating income to finance construction, major equipment purchases and other capital needs, he said. Last years investment portfolio volatility and credit crunch prompted the Sisters of Mercy to cut capital spending for the year ending on June 30 by roughly 40% to $285 million. Capital spending for the prior year totaled $498 million. We had to slow down and reprioritize capital, he told attendees.
Boirie, who outlined how the 17-hospital system uses its leverage and coordination to curb capital expense in a session of more than 40 people, said the Chesterfield, Mo., system is preparing to commercialize its distribution operations. The Sisters of Mercy operates its own group purchasing organization and distribution center.
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