For current market concepts for advance refunding.

Borrowing has been inexpensive in recent years. (a) The historically long period of low interest rates has enabled many hospitals and health systems to execute advance refundings of existing bonds, either to obtain economic savings or to alter the organization's capital structure to better reflect a desired risk profile or a merged credit structure.

Ready for risk contracting?

Before taking on value-based care, hospitals must assess risk capacity.

Risks and rewards of variable-rate debt.

Hospital and health system finance leaders should position their organizations to participate in the variable-rate market. To this end, one important step is to establish the right baseline variable-rate exposure target for the organization based on its credit and risk profile. Leaders also should be thoroughly familiar with the available products and understand the circumstances (pricing, terms, and embedded risk) under which the organization would be willing to deploy them within the overall capital structure.

8 strategies for hospital borrowers in 2011.

Given the likelihood that volatility and unexpected events will continue to challenge the capital markets, healthcare borrowers should implement the following strategic responses: Protect the organization's credit rating. Identify and address organizationwide risk. Establish a global capital strategy for the hospital.

Managing risk through a global capital strategy.

A global capital strategy should be the product of a philosophy, a policy, a plan, and a clear process for implementation: A well-conceived philosophy addresses cash and debt, approach to cash balances and investments, and approach to risk. A good policy defines scope, sets authority, focuses on risk management, offers boundaries, and prescribes actions. An effective plan defines and documents treasury goals and specific tactics for achieving them.