The Capital Investment Needs of CAHs: Results of the 2007 National CAH Survey (Policy Brief #9)

Publication Date: Feb 2009
Author(s): Gregg W
Research Center(s): Minnesota
Project: Analyzing Financial and Operational Performance of CAHs
Notes: Policy Brief #9

This policy brief describes the findings of a national telephone survey of CAHs to determine the nature of their capital needs and experiences in accessing capital to meet those needs. The survey was conducted from January to May of 2007. A total of 381 administrators responded to the survey (85% response rate). Participating hospitals had at least one full year of operation as a CAH. All 45 Flex Program states are represented.

Key Findings

  • The surveyed CAHs reported a total capital need of $2 billion. Of this total, $1.2 billion was for itemized needs related to operational effectiveness, new hospital construction, and fire and life safety compliance.
  • CAHs’ reported capital needs for investment in health information technology have doubled since 2004.
  • 83% of the surveyed CAHs that pursued a capital loan during the two years preceding the survey were successful.
  • Over half of all surveyed CAHs that sought funding to replace their physical plant were successful.
  • Approximately 10% of all CAHs that could not pursue a capital loan because of their debt burden or inability to meet other investment criteria also reported a need to improve or expand their fire suppression systems.
  • The total estimated unmet capital need for the 1,267 CAHs in operation as of December 2005 is $4.5 billion.

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