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NEPC Survey: Majority of Healthcare Organizations Making Significant Financial Shifts to Weather Crisis

May 13, 2020

BOSTON--(BUSINESS WIRE)--NEPC, LLC one of the industry’s largest independent, research-driven investment consulting firms, today announced the results of their healthcare COVID-19 flash poll. This poll examines the steps healthcare organizations are taking amid the coronavirus pandemic. 

The results show:

  • The majority (61%) of organizations indicated they have already, or plan on, furloughing staff. Organizations with investment portfolios of $2B or greater and/or a credit rating of AA have been less likely to include furloughs as part of their strategy, with only about one-third having implemented this action.
  • Forty-three percent of healthcare organizations indicated they have already, or plan to, suspend or postpone retirement plan contributions. Only 28% of larger organizations (greater than $2B in assets) have taken this step, while the majority (63%) of those organizations with a credit rating of BBB or lower indicated this was part of their strategy.
  • The majority (56%) of respondents have seen their daily burn rates increase by up to 25%, while 23% of respondents indicated a daily burn increase of more than 25%. Healthcare organizations on the East Coast were more likely to have seen a steeper increase of more than 25%, with 28% of these organizations indicating so, versus only eight percent of West Coast organizations. 
  • Following the drawdown in capital markets during the first quarter, 71% of healthcare organizations have already rebalanced toward equities and credit assets, have plans to do so, or both.

“Healthcare organizations have recently undertaken drastic measures to combat this unprecedented environment,” said David Moore, Partner and Practice Leader for NEPC’s Healthcare Practice Group. “While it seems healthcare organizations have various avenues of support - 78% have or will access lines of credit and 96% anticipate additional government assistance - it’s also clear there is a continued need to evaluate different strategies to keep them well-positioned going forward.” 

This survey was conducted online by NEPC’s Healthcare Practice Group in April 2020 amid the COVID-19 outbreak and sourced responses from a diverse set of healthcare organizations around the county. For the full results of this survey, click here.

NEPC, LLC:

Employee-owned NEPC is one of the industry’s largest independent, full-service investment consulting firms, serving over 350 retainer clients with total assets over $1.2 trillion. To learn more about NEPC, visit nepc.com.

Media Contact:

Corey Law

NEPC@fullyvested.com

Topics: Press, Press Release, Strategic Healthcare Investing

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