Banking: financing trends in an acquisitive health care market--focus on long-term care

This article reviews the long-term care sector of the health care industry, particularly the factors driving sector consolidation and, through the use of four transactions as a platform, discusses key credit issues and risks facing long-term care companies.

Enterprising nonprofits

Faced with rising costs, more competition for fewer donations and grants, and increased rivalry from for-profit companies entering the social sector, nonprofits are turning to the commercial arena to leverage or replace their traditional sources of funding. The drive to become more businesslike, however, holds many dangers for nonprofits. In the best of circumstances, nonprofits face operational and cultural challenges in the pursuit of commercial funding. In the worst, commercial operations can undercut an organization's social mission. To explore the new possibilities of commercialization and to avoid its perils, nonprofit leaders need to craft their strategies carefully. A framework-what the author calls the social enterprise spectrum--can help such leaders understand and assess their options. Nonprofits first must identify potential sources of earned income; then they should set clear and realistic financial objectives. Commercial programs don't need to be profitable to be worthwhile. They can instead improve the efficiency and the effectiveness of organizations by reducing the need for donated funds; by providing a more reliable, diversified funding base; and by enhancing the quality of programs by instilling market discipline. In the end, commercial operations will not--and should not--drive out philanthropic initiatives. But thoughtful innovation in the social sector is essential if organizations are to leverage limited philanthropic resources.

Starting up the upstarts

Venture capitalists pour $1 billion a year into health care--and that investment may be the most overlooked indicator of new business opportunities. Signs show that companies focused on consolidation and cost-cutting are off the A list for risk capital. Instead, venture capitalists are targeting start-ups that save money on the front lines by truly managing care.

Strategic divestitures. Healthcare companies are finding cash for new investments by selling noncore assets

More and more healthcare companies are selling off noncore businesses to concentrate on what they do best. Hospitals are divesting radiology services, diagnostic businesses, home healthcare agencies and physician practices. The moves represent a pulling back from the vertical integration and massive system-building favored in recent years.

Capital: who's got it? How to get it!

Cruel. Fickle. Demanding. While hospitals and HMOs face tougher scrutiny by credit-rating agencies, Wall Street has slowed the flow of capital to practice management and assisted-living start-ups. Meanwhile, some investor-owned hospitals now emphasize debt over equity. In this special report, we examine the capital markets sector by sector.

United we stand, divided we fall!

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Physician, deal thyself

Times are booming for practice management companies. With many doctors eager to sell their practices, Wall Street is bullish on the firms lining up to buy them. But after some disappointments, the luster may be wearing off. Find out why in this Executive Chartbook exclusive.