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Many providers experienced a stable operating improvement in 2016 as patient volumes grew. These organizations still face the challenge of costs growing faster than revenues and potential post-electoral changes to the Affordable Care Act. As healthcare organizations begin 2017, we believe their investment priorities will include assessing and consolidating retirement plans and taking an enterprise-level view of investment strategy and risk management.
Mercer suggests that not-for-profit healthcare organizations consider taking the following actions in 2017, including:
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Understand the implications of 403(b) lawsuits
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Assess election impact
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Integrate investment strategy and financial plans
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Determine how M&A may affect investment strategy
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Assess interest rate risk
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Manage DB funded status volatility
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Discuss home country bias vs. global diversification
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Assess inflation-sensitive investments
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Review governance structures
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Adopt socially responsible investing principles
“As health care organizations plan for 2017, Mercer advocates a process that incorporates the need for investment assets to enhance balance sheet strength, fund capital investment needs, support operating budgets, and maintain debt covenants. Based on experience working with many institutions in the health care industry, we believe 10 areas should be the focus of attention in the year ahead.”
— Michael Ancell, a senior consultant at Mercer and the national segment leader for health care investments
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