Información patrimonial

Cómo los sistemas de salud pueden simplificar las inversiones complejas con un OCIO

From governance challenges to fee pressure, healthcare organizations need an outsourced chief investment officer who listens first, aligns strategies to mission and helps their boards make informed decisions.

Nonprofit hospitals can often face acute liquidity needs, with unexpected shocks like cyberattacks and natural disasters halting billing and revenue while operating costs continue. At the same time, health systems are pressured by consolidation, major capital requirements and reimbursement delays. With costs rising fast due to inflation, many hospitals may need to rely on their investment portfolios to stabilize operations despite ongoing financial strain.

With challenges mounting, a strategic investment consultant who offers tailored advice can no longer be viewed as a luxury. From our perspective, it’s a necessity that underpins healthcare and hospital systems’ success over the long term.

“A hospital system is an operating business that could have challenges any day—hurricanes, cyber events, anything—so liquidity is critical,” says Eric Ralph, CFA, Head of Healthcare Consulting for Highland Associates, a wholly owned subsidiary of Regions Bank. This specialized boutique investment firm provides research driven investment consulting, primarily for nonprofit healthcare organizations and hospital systems.

With almost 40 years of experience managing the investments of nonprofit healthcare organizations as a fiduciary outsourced chief investment officer (OCIO) provider and investment consultant, the Equipo de Highland Associates has insight into how those in the healthcare industry can pursue their investment goals.

Why tailored investment strategy matters for health systems

This starts with a deeper level of customizing strategic advice to the particulars of the client, designed to help make a meaningful impact on the bottom line.

“If you’re a billion-dollar hospital system, you’re not looking for somebody to come in and tell you what to do,” Ralph says. “You’re looking for somebody to listen, understand what you’re doing, and match the strategy to your needs. One of the things our industry has moved toward is scaling advice, which means people stop listening to what their clients want—that’s not how we operate.”

“Size is often mistaken for safety,” he says. “In reality, size can be the enemy of investment success. Bigger firms aren’t always better—especially when you don’t know whether you’re getting their highest conviction ideas or simply whatever they can fit you into.”

Strengthening governance through true collaboration

An OCIO provider with strong risk management capabilities and ongoing fiduciary oversight can play a large part in reaching your goals—preferably one that can turn complexity into simplicity when it comes to decision-making.

Our team often helps health systems improve governance by taking over day-to-day investment management of operating, pension and foundation assets, allowing boards to focus on strategic, mission-driven decisions.

“We often walk into environments where constituencies aren’t aligned. Our job is to create a common language and rebuild governance, and it’s never a one and done process.”

Taking the time to understand the stakeholders and speaking plainly about the strategies available is crucial. “Some in our industry love to tell you how to build the watch rather than tell you what time it is.”

Another issue many health systems face is feeling somewhat neglected by their investment management provider. “From what we’ve learned from new clients who have exited long relationships, complacency can creep in—fewer new ideas, less energy, less client first thinking,” Ralph says. The Highland Associates team prides itself on its bespoke advice, favoring tailored, mission-aligned and transparent investment management.

Unlocking access to opportunities

Leveraging scale, a top-tier OCIO can potentially help health systems reduce costs and access exclusive opportunities.

“We advocate for clients because we represent many, not just one,” Ralph says. An OCIO can often unlock access to niche or top-tier alternative investments, such as private equity or hedge funds, which may otherwise be inaccessible to smaller institutions.

The stakes are high, so it’s essential to evaluate the full investment universe to identify the most appropriate opportunities. “Many hospital systems operate at negative margins every day, and their investment portfolio is there to potentially help offset those losses.”

These capabilities help OCIO and investment consulting providers deliver meaningful outcomes for health systems.

Prepared for the unexpected

Finding an investment management consultant or OCIO is a challenging task, and the stakes are high. It’s important to choose one that prioritizes your needs, provides tailored advice, helps with governance and offers access to various investment opportunities. It’s also critical that your provider thoroughly understands the healthcare industry and the internal and external risks to plan for. “For example, one health system had a cyber event and couldn’t send bills for two months. When that happens, they have to spend out of their portfolio just to keep operating,” Ralph says. “Understanding liquidity isn’t about a single pool. It’s about the entire enterprise and how long you can operate under stress.”

An investment management partner who understands the operating environment can help plan for these types of risks, while also balancing the need for performance against prudent risk management.

If your health system is navigating liquidity stress, governance gaps or fee pressure, don’t wait for the next shock. See how Highland Associates can help you align strategy with mission and evolving hoja de balance pressures.