The healthcare industry has experienced profound changes in the nature of competition, access to capital, and credit in the post-pandemic environment. These are challenging and complex topics, with differential impacts on providers across the nation. Four industry experts shared their insights on healthcare’s evolution at the 2024 Annual Conference of the Maryland Chapter of HFMA (Healthcare Financial Management Association), held at Turf Valley, Ellicott City.
Moderator Liz Sweeney, President of Nutshell Associates, probed these topics with panelists Michael Brown, CEO & Founder of Cornerstone Health Advisors; Kristen Welch, SVP & Director of Healthcare Banking at Fulton Bank; and Mike Quinn, Managing Director of Healthcare Banking at Bank of America Merrill Lynch.
The group shared their insights on a wide range of challenging issues in the healthcare space, including:
Post-Pandemic Challenges and Key Changes:
Michael Brown discussed competition and strategic perspectives.
Kristen Welch shared her observations on credit and the availability of capital as a commercial lender.
Mike Quinn talked about market conditions and access to capital.
Regional Differences: Kristen Welch discussed unique differences in Maryland compared to national conditions.
Capital Needs: Michael Brown addressed the impact of the pandemic on capital plans, noting that many plans were put on hold or scaled down during COVID-19. He also discussed the current state of funding capital plans and whether healthcare systems are returning to the market to fund their capital needs.
Debt Structure and Products: Mike Quinn talked about changes in the use of various debt products by healthcare systems and their risk appetite concerning debt products.
Credit Conditions: Kristen Welch discussed the difficult credit conditions for the healthcare sector in recent years and the challenges commercial banks face in this environment. She also addressed how these conditions affect the bank's risk appetite, borrowing rates, and covenants/terms. Other panelists provided insights on how credit conditions impact the ability to finance capital and whether credit is a driver of consolidation.
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