The Healthcare Fiduciary’s Guidebook: A Snapshot
Two years into the pandemic, hospitals and health systems across the country remain in dire financial straits as expenses continue to mount while revenues shrink. As a result, facilities have had little choice but to review and restructure their financial plans to preserve the well-being of the overall enterprise. In some instances, this has included making changes on the investment side to help offset losses on the operational side.
Amid the flurry of investment strategy reviews, we've developed a digital guide to help healthcare fiduciaries better understand and navigate the complexities of their investment programs. Our newly released guidebook is designed to help fiduciaries effectively oversee these programs and achieve their goals—with the support of an outsourced chief investment officer (OCIO) provider.
There are three sections to this guidebook.
The first section focuses on setting up a robust governance structure.
These are the foundational decisions that drive how your investment program operates. This section will help you determine your organization's fiduciary governance structure and which decisions to delegate or retain. In other words, you don't have to do it all, but you do need to know who is best equipped to do it. We'll illustrate these critical decisions with a fiduciary ladder, which will serve as your roadmap for the rest of the guidebook.
The second section covers designing your investment program.
This section will walk you through the process of building your investment program's strategic asset allocation by combining several essential elements, as effectively managing multiple investment pools can be a complex process. We'll help you nail down your investment beliefs (including your beliefs around responsible investing), as well as the organizational and capital-market inputs applicable to each of your asset pools. These decisions are critical to ensuring that your overall investment program and each asset pool align with your organization's financial goals and objectives. We'll then illustrate how these dovetail with your provider's capital market insights. These components are closely intertwined and work together to drive your strategic asset allocation.
The third section provides tips on effectively building and overseeing your outcome-oriented portfolio.
Finally, we'll share tips on managing your investment portfolio, which means working with your provider to find the right implementation options, portfolio management strategies, and managers to prime your portfolio for investment success. We'll address how to evaluate your investment portfolio's risks, which can stem from various sources, and how to measure their potential impact on the broader organization. We'll also provide tips to help you ensure you're working with the right provider.
Ultimately, we want to help you navigate the process of determining who is responsible for what decision, creating alignment, and managing enterprise risk.
As a fiduciary for a non-profit hospital or health system, you have a vital job that fills a crucial role in our society—especially during today's challenging times, when high-quality healthcare is a critical tool to combat the pandemic. Our hope is that you'll be able to use the framework laid out in this guidebook to meet your organization's objectives—whether as part of discussions with your current investment committee or board, or as you onboard staff or new committee members—and that the decisions made today will lead to a brighter and healthier tomorrow.