In spite of the many risks facing the health care sector, there is a lot of opportunity for growth. The Bond Buyer's 9th Annual Nonprofit Hospital Finance Conference will help you determine the most profitable path through the current market.

Healthcare issuance rose for the seventh consecutive year, posting a 22% gain in 2007, and set an all-time record of $49.44 billion.

Healthcare accounted for 11.5% of the $429.73 billion municipal volume in 2007, up from 10.4% in 2006, and the highest since 12.1% in 1999.

Coming off the heels of a record year, the nation's non-profit hospitals are likely to continue their aggressive capital-investment program this year, even as they grapple with disruptions in the credit markets. Health care remains a competitive business, and many hospitals find they must expand or renovate to keep pace. Information technology remains an ongoing and expensive concern. In addition, high construction costs raise the stakes for additional towers or other extensions - which can cost as much as $500 million for an urban hospital.

However, some speculate that the sector's credit quality has reached its peak, and that a return to historical trends is probable, led by a number of factors beginning to undercut some of the sector's more vulnerable issuers.

• Lower-rated credits are suffering from health insurer reimbursement rates that are coming down from historically high levels, as well as rising costs to attract and retain medical professionals and to service increased debt loads.
• State budgets are under pressure, raising the threat of cutbacks to Medicaid and other public insurance programs. This could mean an increase in the number of uninsured patients, cutting into the bottom line.
• In addition, healthcare organizations will be required to do a number of added things to secure reimbursement funds. Coding these changes will require a steep learning curve for health care workers and may result in decreased reimbursements while they get up to speed.

While these uncertainties will affect all health care credits, those coming to market in the next year will encounter added difficulties. Many issuers are at a loss about how to access capital markets in the wake of the serious disruptions in the bond insurance industry and auction-rate markets - which have been crucial components of nonprofit hospitals' financing toolkits.

Register Now & Save $50 OFF the on-site rate!