Alternative financing for nonprofit hospitals

The physicians and others in  Cambridge Management Group  have been ruminating that as outpatient populations continue to fall, nonprofit hospitals may have to increasingly turn to such private-sector innovations as ”social-impact bonds” to finance physical-infrastructure projects. Those projects will include constructing more hospital-related outpatient facilities. This is particularly germane to New England, where there are far fewer for-profit hospitals than in most of the country. For that matter, they may have to turn to them  to cover  regular operating costs.

With these bonds, investors get a decent rate of return, though not as high as they might get elsewhere, and the satisfaction from helping projects and institutions that address important, indeed crucial, public needs.

Given the new economic  and other pressures on hospitals, they’ll have to get a lot more creative in financing their projects, including many more collaborations between nonprofit and for-profit organizations as well as money from federal, state and local governments.