Peter Urbanowicz and Martin McGahan, managing directors with consulting firm Alvarez & Marsal, are not optimistic that the financial challenges facing health systems will improve anytime soon.
Both are advisers to CEOs and CFOs.
The financial landscape has changed significantly since COVID-19, and health systems know this, said McGahan, a restructuring advisor who has worked 30-plus years in healthcare. But nonprofits have been slower to react than the for-profit health systems, Healthcare Finance reports.
“For-profits have to react more quickly when shares drop,” Urbanowicz said. “The pressure comes when it comes to liquidity problems. Then, they get pressure.”
McGahan said, “Access to capital has shifted dramatically in the last three months in the public and private sector. We’ve seen an uptick in sales lease-backs.”
Or simply selling assets, such as when Steward Health in Utah agreed in 2021 to sell the operations of five of its hospitals to HCA Healthcare. Read more.
