CHICAGO, IL (BUSINESS WIRE), May 3, 2005 - For many hospitals and health systems, accessing the necessary funds to make improvements in medical equipment, technology and facilities remains a top challenge. According to a new report, the keys to survival and capital access lie in the rigorous, consistent application of corporate finance principles, a discipline that is not always second nature to resource-constrained hospitals navigating the ever-changing healthcare market.

The report, Financing the Future II, was developed by the Healthcare Financial Management Association (HFMA) in partnership with two healthcare industry veterans, GE Commercial Finance Healthcare Financial Services and Kaufman, Hall & Associates, Inc. The first report in this series, Seven Principles of Best Practice Financial Management, details key examples in financial planning and execution by leading healthcare organizations and corporations.

"Healthcare organizations who are getting it right are using proven corporate finance practices and solutions that are worth the investment of time and resources," said Richard Clarke, president and CEO of HFMA.

Some examples of hospitals with top corporate finance disciplines include:

• OhioHealth, a health system with eight acute care hospitals throughout central Ohio, which uses education to achieve unification around an integrated planning process.

• Ascension Health, the largest not-for-profit healthcare system in the US, which uses a rigorous calendar management system to guide the integrated planning process.

• Partners HealthCare, an integrated health delivery system in Boston, which focuses on developing the "right" capital structure to support its strategic financial goals, while optimizing flexibility and minimizing cost.

• Northwestern Memorial Hospital, a 720-bed hospital in Chicago, which aligns best practice capital management practices with the organization's long-range strategic, financial, and related operating plans.

The practical solutions detailed in Financing the Future II come at a critical time. In 41 percent of hospitals, capital spending still lags behind depreciation. Many hospitals are not able to invest at a rate necessary to keep up with the rising need for investment in plants, technology and equipment. Yet research shows hospital CFOs expect to increase capital spending by 14 percent over the next five years -- compared to one percent increases between 1997 and 2001. (* All data from Financing the Future I.)

"Struggling hospitals must look at what they can do to turn the situation around," said Jeffrey A. Malehorn, president and CEO of GE Commercial Finance Healthcare Financial Services. "It is imperative that these healthcare providers put in place the tools and discipline they need to finance their future and to continue serving the needs of their communities."

"This series of reports serves as the compass -- or definitive 'how to' guide - to corporate finance discipline that will ensure a hospital's ability to pursue its mission and steward the health of its patients and broader community,"said Kenneth Kaufman, managing partner at Kaufman Hall.

The first Financing the Future series, led by HFMA in partnership with GE Commercial Finance Healthcare Financial Services - with research conducted by HFMA and PricewaterhouseCoopers, began the process of highlighting strategies hospitals and other healthcare providers could use to improve access to capital through successful financial planning and execution. In particular, the series focused on the current and future state of capital planning, management and spending by hospitals and healthcare providers.

Financing the Future II continues this process. The goal of Financing the Future II is to define, provide examples of, and encourage the implementation of a successful, corporate finance-based approach to financial management in healthcare organizations. By providing practical how-to information in the form of concrete strategies, tools, timelines, and other materials, the second Financing the Future series seeks to help healthcare organizations of all sizes improve their financial performance.

To be published over the next 18 months, Financing the Future II will include six reports for healthcare financial leaders, their staffs and healthcare executive board members. Each report will illustrate how actual hospitals and health systems have applied corporate finance principles to achieve successful financial performance and capital access. Topics to be covered include key principles of better practice financial management (Report 1); capital structure and management (Report 2); strategic financial planning, as well as capital planning and allocation (Report 3); joint ventures with physicians and other partners (Report 4); strategies for financially struggling hospitals (Report 5); and the outlook for capital access (Report 6).

The next report in the series will be issued in August 2005.

To order this report, or previous reports, contact HFMA at (800) 252-4362, and select option 2, or visit www.financingthefuture.org.

Press inquiries should be directed to:

Deia Campanelli
GE Healthcare Financial Services
312-441-6169

HFMA
Bridget Vrba
312.596.3479
bridget_vrba@chi.bm.com

Kaufman, Hall & Associates, Inc.
Kenneth Kaufman
847-441-8780
KKaufman@kaufmanhall.com

HFMA is the nation's leading membership organization for nearly 34,000 healthcare financial management professionals employed by hospitals, integrated delivery systems, managed care organizations, ambulatory and long-term care facilities, physician practices, accounting and consulting firms, and insurance companies. Members' positions include chief executive officer, chief financial officer, controller, patient accounts manager, accountant, and consultant. HFMA offers educational and professional development opportunities, information on key issues, technical data and networking opportunities, with the ultimate goal being to create a more supportive environment in which members do their business.

For more information, visit the Association's Web site at www.hfma.org.

GE Commercial Finance Healthcare Financial Services is a provider of capital, financial solutions, and related services for the global healthcare market. With over $13 billion of capital committed to the healthcare industry, Healthcare Financial Services offers a full range of capabilities from equipment financing and real estate financing to working capital lending, vendor programs, and practice acquisition financing. With its knowledge of all aspects of health care from hospitals and long-term care facilities to physicians' practices and life sciences, Healthcare Financial Services works with customers to create tailored financial solutions that help them improve their productivity and profitability.

For more information, visit .

Founded in 1985, Kaufman, Hall & Associates, Inc. is counted among the country's most respected independent financial and capital consultants, working with healthcare organizations of all types and sizes. Kaufman Hall provides financial advisory services to debt transactions; prepares and implements integrated strategic, financial and capital plans; designs comprehensive capital allocation processes; and assists in the evaluation, structuring and negotiation of merger, acquisition and divestiture transactions. In addition, Kaufman Hall developed and markets the ENUFF Advisor Suite of financial management software products. Kaufman Hall serves its clients from offices in Chicago, Los Angeles, San Francisco, Boston and Atlanta.

For more information, visit www.kaufmanhall.com.