1. I need to summarize three articles on working capital management in health care. Primary references with publication dates less than 18 months old. Appreciate some guidance.
Working capital management is the management of current assets and current liabilities to maximize short-term liquidity (1). Working capital comprises short-term net assets: stock, debtors, and cash, less creditors. Working capital management then is to do with management of all aspects of both current assets and current liabilities, so as to minimise the risk of insolvency while maximizing return on assets. Cash is the lifeline of a company, so if this lifeline deteriorates so does the company's ability to fund operations, reinvest, and meet capital requirements and payments. Understanding a company's cash flow health is essential to making investment decisions. A good way of judging a company's cash flow prospects comes from looking at its working capital management (WCM) (2)
I have located three articles and provided a brief summary for each:
1. Example: Trusco (2004): the following article describes how Trusco manages the working capital for both for-profit and not-for-profit healthcare organizations. They do this by maximizing long-term returns at an appropriate level of risk, whether it is managing working capital or funded depreciation assets. The best investment recommendations and solutions are based on a thorough analysis of all the factors that impact a particular pool of assets. They actively manage the healthcare organization's assets, maintain the appropriate asset allocation, and fulfill all the reporting requirements associated with working capital management.
Healthcare: Working Capital Management
Trusco has successfully developed long-term partnerships with both for-profit and not-for-profit healthcare organizations. Our knowledge and understanding of our clients' goals and objectives has made us one of the leading investment managers in the healthcare arena.
We recognize the importance of maximizing long-term returns at an appropriate level of risk, whether it is managing working capital or funded depreciation assets. As the leading employer in many geographical locations, our healthcare clients expect to receive excellence in the management of their retirement plan assets. At Trusco, our goal is to satisfy those expectations.
It's our firm belief that the best investment recommendations and solutions are based on a thorough analysis of all the factors that impact a particular pool of assets. We will assist you in developing an investment policy statement and guidelines for each pool of assets. Once the investment policy statement is completed, we will actively manage your assets, maintain the appropriate asset allocation, fulfill all the reporting requirements, and regularly communicate the results to you. Beyond the investment policy statement, we also have extensive experience in developing spending policies and withdrawal procedures that will help add incremental returns to your portfolio.
Here are a few examples of investment portfolios we manage for healthcare organizations:
• Bond proceeds
• Working Capital
• Funded Depreciation
• Endowments: restricted and unrestricted
• Retirement plans
Source: http://www.truscocapital.com/clients/HealthCare.aspx Copyright 2004 Trusco Capital Management.
Example 2: This article describes a different type of scenario. Part of the working capital management is through an unusual capital source, that of Agriculture. The USDA's hospital programs usually are administered through the department's state and regional offices. Unlike other, more centralized federal programs, the USDA maintains a relatively large number of offices throughout each state, reflecting its legacy of providing services to an agrarian farming clientele. Working Capital management comes through loans under the CF program, which may cover a variety of program costs; generally, covered items are similar to those that may be included in a mortgage participating in the FHA-242 mortgage insurance program for hospitals, except that the USDA programs also may include working capital.
Healthcare Capital Management, November 2004 by Kevin T.
An unusual capital source for rural hospitals: agriculture: did you ever think of going to the U.S. Department of Agriculture to fund your capital project?
Kevin T. Ponton
For at least the past five decades, the USDA has supported the financial development of crucial facilities, businesses, and industry in rural America. Although its earlier name Farmers Home Administration (abbreviated "FmHA," not to be confused with the Federal Housing Administration's "FHA")--implied a distinctly agrarian focus, its programs have supported a broad range of rural development projects, including hospitals and other healthcare facilities. Perhaps understandably, many potential participants--including hospitals, lenders, investors, and financial advisers--have been unaware of this source of ...
The solution summarizes three articles on working capital management in health care including primary references with publication dates less than 18 months old.