Corporate & Medical Finance

Corporate finance helps a company fund short-term needs.

A medical facility, such as a hospital, a research entity or a clinical institution, needs financing to operate in the short term and long term. Corporate finance strategies and medical finance options help a health care organization meet monetary commitments.

Corporate Finance Defined

Corporate finance is a business practice that allows a firm to receive funding for projects in the short term and long term. Senior leadership usually works with investment bankers to develop corporate finance strategies.

Significance

Corporate finance plays a significant role in modern economies. A company may be unable to engage in commercial activities in the short term if it cannot raise cash or meet liquidity levels.

Medical Finance Defined

Medical finance strategies help leadership at a health care facility receive immediate funding by pledging, or selling, short-term assets. These assets include medical receivables from insurance companies and other short-term or long-term payments.

Function

Medical financing is critical for a health care facility because internal funds, otherwise known as retained earnings, are usually insufficient to cover operating needs in the short term and long term. In addition, insurance companies generally do not pay claims immediately.

Corporate and Medical Finance

Corporate finance and medical finance are distinct activities. However, there are situations in which they interrelate. For instance, a hospital engaging in a merger or acquisition transaction may seek financing from investors by selling bonds or medical receivables.

References

• Vanderbilt University: Perspectives on Corporate Finance Research
• Journal of American Phyisicians and Surgeons: White Paper on Medical Financing