Quality of care emerges as a determinant of creditworthiness

Sophisticated profiles of the quality of care provided in hospitals are prompting investors and bond rating agencies to ask questions about debt capitalization: What elements of the quality of care--measured by illness outcome, length of stay, morbidity, and mortality--will improve as a result of a proposed capital financing? Can the hospital demonstrate that cost benefits will result from a proposed financing by correlating costs with measurable improvements in patient outcomes? Can the hospital show, through financial feasibility analyses that reflect quality assessments, that its market share will remain stable? Hospitals' ability to gain access to credit markets will be influenced materially by their answers to these questions.