Recession-Proof Spending in Hospitals
During this recession, Southwest Medical has noticed a trend of hospitals saying their projects have been put on hold until their budget feels some relief. In a time marked with spending freezes, I encourage you to find alternatives to your old methods of purchasing. Take this season in America as an opportunity to look at the prospect of buying refurbished medical equipment. Our company is currently working on projects for several large hospitals, who have recently recognized the wisdom in buying used equipment. Southwest Medical can save you 50% of the cost, without compromising any of the quality.
If you are looking for specific equipment and would like a quote, email me at caitlin@swmedical.com
Recession Weakens Hospitals’ Capital Spending Projects
By JASON ROBERSON / The Dallas Morning News
The University of Dallas may not have been alone last week when it cited the recession and a weak fundraising climate as reasons for suspending plans to build a pharmacy school.
Similar medical-related capital spending projects are being put on hold throughout North Texas and the rest of the nation, according to local hospital builders and the American Hospital Association.
Nearly half of 639 hospitals nationwide that were surveyed between late December and Jan. 6 have postponed projects that were to begin within the next six months, according to the AHA. And many have stopped projects that were in progress.
“From cancer centers to expanded emergency departments to electronic health records systems, hospitals are postponing or delaying projects that could greatly benefit health care in communities across the country,” said Rich Umbdenstock, president and chief executive of the AHA.
No North Texas hospital system has announced a delay or suspension of building and expansion projects because of the economy.
But Dwayne Hodges, executive vice president at Skiles Group, a Dallas-based builder of medical facilities, said he has noticed the recession’s impact on North Texas.
“Several of our projects have scaled back or customers are doing less than what they anticipated,” Hodges said. “A lot have been postponed.”
Hodges declined to name the projects without his clients’ permission.
Rod Booze, managing principal at Arlington-based Ascension Group Architects, is working on an undisclosed North Texas-area hospital project controlled by a group of 100 physicians.
“Their caseload is strong, and they’re capitalized at $12 [million] to $14 million, and their total project is just $55 million, 60 percent of it is financed,” Booze said.
But there’s a problem.
“Even though banks want to give them the money, because of the leverage banks have on their side, [the physicians] are having to split up their loan between two and three banks,” Booze said. “The project is too rich for one bank’s balance sheet.”
Hospitals mostly rely on borrowed money, philanthropy and reserves to fund capital projects, but an increasing number of hospitals are finding it difficult to get money from these sources, the AHA said.
The Woman’s Hospital in Baton Rouge, La., for example, has delayed and may have to stop construction of a facility that would help the hospital care for infants during catastrophes, which it did during hurricanes Katrina, Rita and Gustav, according to the AHA.
The vast majority of hospitals in the AHA survey reported that borrowing through tax-exempt bonds – the main source of borrowing for most hospitals – is difficult or impossible.
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Tags: Capital Spending, Expansion Projects, Fundraising, Health Care, Hospital Spending, Recession, Refurbished Medical Equipment, Spending Freeze, Used Equipment