Dive Brief:
- A survey by Fitch Ratings finds a total of 53% of healthcare providers stated they are planning to ramp up their capital expenditures during the coming five years--up from 45% who planned to do so in 2012.
- The expenditures, targeted for projects such as new infrastructure and IT, will most typically be modest and paid for with cash and investments. Less than a third of the survey respondents indicate they will take on new debt to finance these projects..
- Just 17% of the respondents expect to lower their capital expenditures, compared to 19% in 2012.
Dive Insight:
The plans to increase spending suggest healthcare providers are feeling increasingly optimistic about their financial outlook, the Fitch analysts say.
As Modern Healthcare notes, all three of the major credit rating agencies report nonprofit hospital financial metrics improved in 2015.
The survey finds health IT continues to be a top concern, though a growing focus is being placed on outpatient care, which is seeing higher demand as a result of new reimbursement models. Just 26% reported confidence their outpatient facilities would be able to meet the demand, while 75% reported adequate inpatient facilities.
Because of the focus on small-scope projects, the number of health systems planning to issue bonds to finance their capital spending decreased from 39% in 2012 to 29% in 2015.