10 Priorities for Nonprofit Hospital Investment Committees

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Given the large-scale changes in the healthcare sector today, investment strategy has become more important.

As the calendar flips to a new year, prudent hospital and health system executives are looking at their investment strategies from 2013 and evaluating what worked — and what didn't. A report from consulting firm Mercer identified 10 priorities that investment committees at nonprofit hospitals and health systems should consider as 2014 gets underway.

1. Assess whether risk tolerance in the investment portfolio has changed, given a challenging operating environment.

2. Review the fixed income allocation in both a low and a rising interest rate environment.

3. Consider whether a delegated investment approach could offer time and cost savings for your organization.

4. Evaluate whether investment strategy should take into account a pending or potential strategic action, such as a merger, acquisition or joint venture.

5. In a post-merger situation, conduct an investment policy survey to facilitate successful integration of investment assets.

6. Develop a strategy for getting a defined benefit pension plan fully funded.

7. Recognize the growing importance of the defined contribution pension plan.

8. Consider how best to meet the fiduciary obligations of defined contribution plan governance.

9. If you are considering moving a captive insurance company offshore, understand the governance, reporting and regulatory requirements.

10. Assess the balance sheet implications of taking on capitation or insurance risk.

More Articles on Hospital Finance:
Becker's CEO Roundtable 2013: 12 Leaders on the Biggest Healthcare Challenges Today
Investment Oversight: Board Performance as an Indicator of Mission Success
The Long Goodbye: The Decision To Terminate an Investment Manager

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