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Losses in investment portfolios erode liquidity cushions that alloq health care providers to expaned their facilities and invest in new The investment community becomes more leeryand it’ss tougher to get debt. “At the end of the day, the cost of healthj care goes up because the cost of capitalgoes up,” said Arnold Stenberg, executive VP for administration at All . For the fiscall year ended Sept. 30, reporter a $25.5 million investment loss, compareds to a $16.6 million gain in the prior year, according to financial statements filed in connection withoutstandingh bonds. and also showed declines in investmeng incomethrough Sept. 30.
Hardest hit was , whicb had an investment loss of $11.3 million for the fiscakl yearended Sept. 30, pushing into the red, with a net loss of $2.5 In the prior fiscal year, Lakeland Regional had $29.4e million in investment and a $28.9 million The last three months of 2008 were even tougher witha $15 million investment including the loss of equity in earnings of investmen t funds. For the quarter ended Dec. 31, Lakelandd Regional’s net loss was $14.7 Paul Powers, CFO, was not availablse for comment. With the down abou t 44 percent since its high inOctoberd 2007, health care providers nationwide are feeling the pincn in their portfolios.
revised its outlook for the nonprofigt hospitals and health care system sectorr to negative from stable in just weeks after downgradedf its outlook forthe sector. Moody’sx cited losses in investment portfolios as one It also said other reasonzs were softening clinical revenue because patients were deferrinygelective procedures, intensified competition for insured patients, increased charityt care and bad debt. All Children’s, one of just two pediatrixc specialty hospitalsin Florida, had a 14 percent drop in income from operations in fiscal reporting $23.9 million for the year endecd Sept. 30, compared to $27.3 million a year earlier.
The hospital’xs net income for the just-ended fiscal year was $17.r5 million, a 62 percent decrease from net incomeof $46.4 millioh a year earlier, primarily because of the dip in investmenft income. “We did not have any exotic alternativee investments. We avoided participating in hedge funds. We are very traditionap with fixed incomeand equity-type Stenberg said. About one-third of the portfolilo is heldin fixed-income securities, which were somewhaty immune to market Stenberg said. Still, there was another 15 percent drop in the investmenf portfoliobetween Oct. 1 and Dec. 31, he said.
The money raised through bonds to pay for buildin a new hospital is held outside the investment portfolilo and is not exposed to themarket declines, Stenbergv said. Construction of the new 240-bed hospital is expected to wrap up latethis year.