Real Estate Assets: Alternative Tool to Boost Financial Cushion Under Value-Based Reimbursements

In the new era of value-based reimbursements, healthcare organizations are increasingly becoming payers themselves and taking on more risk. Many now need a greater financial cushion to cover insurance losses and guard against insolvency. While many go down the usual path to build this cushion – issuing bonds or seeking bank loans – an often unexplored path may prove more beneficial: real estate.

Monetizing buildings and land owned may be a more advantageous cash source for healthcare organizations, Dr. David Friend, Managing Director of The BDO Center for Healthcare Excellence & Innovation, and Stuart Eisenberg, National Leader of BDO’s Real Estate and Construction practice, explain in a recent contribution to HFMA’s Strategic Financial Planning.

Organizations have various options when going down this path, they explain, including private investors, pension funds and healthcare real estate investment trusts (REITs). Healthcare finance leaders need to approach sale-leaseback transactions carefully to avoid potential pitfalls, including triggering tax or debt covenant trip wires. Four steps can help guide the process, as outlined by the authors.

To learn more about how your organization can tap into its real estate assets to provide a stronger financial cushion – and key factors to consider when doing so.

Healthcare professionals with questions specific to their facilities or organizations are invited to reach out to BDO:
 
Dr. David Friend
Chief Transformation Officer and Managing Director of The BDO Center for Healthcare Excellence & Innovation

Stuart Eisenberg
Partner and National Leader of BDO’s Real Estate and Construction practice