H2C PERSPECTIVE
Strategic Capital Planning
Does Your Strategic Capital Plan Need a Refresh? What Healthcare Leaders Should Consider
January 2022
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About The Authors
Victoria Poindexter is a managing director at H2C. Contact Victoria at vpoindexter@h2c.com.
George Huang is an executive director at H2C. Contact George at ghuang@h2c.com.
Strategic capital planning never becomes less critical, but it does need to change with the times. And never has this become more obvious than today, after almost two years of unprecedented challenges for healthcare providers.
In the 1990s, the introduction of “integrated strategic and capital planning” shifted the focus of healthcare finance leaders from how best to finance a project to how best to finance the corporation—i.e., to ensure access to capital to fund the organization’s mission over a longer term. This “corporate finance” approach sought to minimize capital costs by positioning the organization to access markets when they were favorable and, as a result, maintain the strongest credit rating and an acceptable level of risk. However, for many organizations, the objective of the plan was to fund a mission that included providing care across the full continuum, primarily through internally generated funds and external debt capital.