Healthcare Capital Financing 💱:

How to Keep Your Patient-Butts Covered 🍑 and Your Bottom Line Strong in Tough Capital Market Conditions...

...This fall, I’ve engaged in numerous conversations and had thought-provoking debates surrounding the necessity of

inventive capital financing strategies to support value-based care arra

ngements, especially given the challenges posed by cash flow timing ⌛.

🌟 With this in mind, I’d like to offer some insights and ideas on the matter that could help de-risk strategic investments in VBC & APM participation💡

👬 Capitation can be your amigo:

• Comes with a predictable revenue stream; allows strategic investments in physician enablement

• Fixed, predictable cash flow = happier street and shareholders

• Yes, downside risk can be scary. Consider combining cap arrangement with reinsurance or discussing a risk corridor implementation with the payer

🔍 Explore reinsurance affordability:

• History has shown that high-interest rate environments lead to lower reinsurance costs

🛠️ Design such arrangements with an eye toward capitalizing on any comparative advantage(s), vertical integration prospects, “scaling up” opportunities, etc. you maintain

👩‍👩‍👦‍👦 Pool your resources with your homies

• Hospitals, health systems, and other healthcare organizations can partner with each other to pool resources and invest in VBC and risk-based financial arrangements. This can help to reduce the risk for each individual organization and make it easier to secure financing.

📣 Call your local finance bro(s)

• Venture capital and private equity firms are increasingly investing in healthcare companies, including those that are developing new VBC and risk-based financial arrangements. These firms can provide access to capital and expertise that can help healthcare organizations to succeed in this new environment.

🤝 Collaborate with Regulators!

• They can give you access to tax incentives, grant + research funding, bond financing, low-interest secured loans for equipment, etc.

• Social impact bonds are a type of financing that is used to fund projects that have a social or environmental impact.

  • These bonds are typically repaid by governments or other organizations based on the achievement of specific outcomes. Social impact bonds could be used to finance VBC and risk-based financial arrangements that are designed to improve the quality and efficiency of healthcare delivery.

... And remember, in tough capital market conditions, it's not just about covering your patient-butts and bottom line, but also about making smart, strategic investments that can turn those market lemons into the most profitable lemonade your healthcare organization has ever tasted! 🍋