Pooled credit plans offer financing alternatives to independent hospitals

Using the collective financial strength of a group of not-for-profit health care institutions to finance capital needs has become an increasingly popular concept. This article discusses the significant advantages and disadvantages of the concept, provides an overview of the development of multi-institutional financing arrangements, and describes the generic forms of credit poolings. It also outlines three broad areas of inquiry to be explored by potential participants before entering a pooled credit arrangement: the relationships among participants, the availability of assets to support debt, and corporate planning and strategy.