Health Care Finance

Hawkins Delafield & Wood LLP has a well-established national reputation for experience, creativity, and expertise in tax-exempt health care finance. The Firm serves as bond counsel, underwriter's counsel and special financing counsel on financings for some of the largest public and not-for-profit health care systems in the country, as well as clinics, nursing homes, health maintenance organizations, life care centers, continuing care retirement communities, social service centers, visiting nurse associations, mental health facilities, and medical schools. The health care systems with which the Firm works include the New York City Health and Hospitals Corporation, Catholic Health East, Banner Health System, Dartmouth-Hitchcock Health System, Geisinger Health System, Inova Health System, Partners Health System, Yale-New Haven Health System, Hartford Healthcare, University of Michigan Hospitals, Mount Sinai Medical Center, North Shore-Long Island Jewish Health System, Providence Health and Services, Virtua Healthcare, Sisters of Charity of Leavenworth Health System, Trinity Health Corporation, MaineHealth, Princeton HealthCare System, Covenant Health, and BayCare Health System.


In addition to working with numerous multi-state and multi-facility health care systems, Hawkins serves on a regular basis as bond counsel to state-wide health care issuing authorities in New York, Connecticut, Maine and New Hampshire, and has served as bond counsel from time to time for the state-wide health care issuing authorities in Arizona, Idaho, West Virginia, Massachusetts, California, Hawaii and New Jersey, as well as for local issuing authorities in New York, New Jersey, Missouri, Arizona, Florida, Pennsylvania, Georgia, Tennessee and California.


Hawkins often provides clients with advice on a continuing basis with respect to outstanding financings, state and federal law, dispositions of assets, corporate affiliations, mergers and reorganizations, document amendments and replacements, disclosure issues, and bond redemptions. The value of the Firm's expertise in the health care finance field has been recognized by a wide variety of clients and has led to our involvement in a large number of diverse transactions throughout the nation. 


Highlights of our health care finance practice include the following:


Specialized Expertise in Multi-state and Multi-facility System Finance

The consolidation of single site community hospitals into large multi-state and multi-facility hospital systems has been one of the most dramatic trends in health care finance over the past two decades. Hawkins Delafield & Wood LLP has served as bond counsel or underwriter’s counsel for many of the nation's leading health care systems. Examples of such experience are as follows:  

  • Bond counsel for Trinity Health, based in Novi, Michigan, with over 30 health care facilities in California, Idaho, Indiana, Iowa, Maryland, Michigan, and Ohio, with an aggregate of 8,588 acute care, long-term care, skilled nursing and behavioral health beds, and 1,538 units of residential housing for the elderly.
  • Bond counsel for Catholic Health East, based in Newtown Square, Pennsylvania, with over 50 facilities in 11 states, including Maine, Massachusetts, Connecticut, New York, New Jersey, Pennsylvania, North Carolina, Alabama, Delaware, Georgia and Florida, totaling in excess of 12,000 acute and long-term care beds and 1,800 living units.
  • Bond counsel for Banner Health, based in Phoenix, Arizona, with 21 acute care hospitals in eight states with 4,059 acute care beds and 300 long-term care beds.
  • Counsel to the underwriters for Partners Health System, of Boston, Massachusetts, which includes The Massachusetts General Hospital and The Brigham and Women’s Hospital, a major healthcare system consisting of two tertiary and four community acute care hospitals, one hospital providing inpatient and outpatient mental health services, three rehabilitation hospitals and other healthcare and related facilities totaling in excess of 4,350 beds.
  • Bond counsel for the Yale-New Haven Health System, New Haven, Connecticut.
  • Bond counsel for Hartford HealthCare, a five hospital system including Hartford Hospital, Windham Hospital, New Britain General Hospital, Bradley Memorial Hospital and MidState Medical Center, with over 1,600 licensed beds.
  • System counsel for North Shore-Long Island Jewish Health System, an eleven hospital system aggregating in excess of 5,370 beds, located in New York City and Long Island.
  • Underwriters’ counsel for the Geisinger Health System, centered in Danville, Pennsylvania, which consists of a multispecialty physician group practice comprised of over 600 physicians; managed care companies (including one of the largest rural managed care companies in the country); and an array of healthcare provider facilities including 55 medical groups comprised of primary care sites and specialty care sites, a large tertiary/quaternary care teaching hospital, two several secondary acute care hospitals, and a drug and alcohol rehabilitation facility.
  • Counsel to the underwriters for the University of Michigan Hospitals, with 913 licensed beds, including 848 beds for medical/surgical purposes (608 adult, 209 pediatric and 31 obstetric) and 65 psychiatric beds.
  • Financing counsel to Mount Sinai Medical Center in Miami Beach, Florida.
  • System counsel for Virtua HealthCare System, a multi-hospital system based in Marlton, New Jersey.
  • System counsel for Central DuPage Health System.
  • Underwriter’s counsel for Providence Health and Services, a multi-hospital system based in Renton, Washington, with hospitals in California, Alaska, Oregon and Washington.
  • Bond counsel for the University of Southern California, including the USC University Hospital and the USC/Norris Cancer Hospital.
  • Underwriters’ counsel for the Sisters of Charity of Leavenworth Health System, a multi-hospital system based in Leavenworth, Kansas.
  • Underwriters’ counsel for William Beaumont Hospitals, a multi-hospital system based in Royal Oak, Michigan.
  • Bond counsel for Inova Health System, a multi-hospital system with over 1,750 licensed beds based in Fairfax, Virginia.
  • Bond counsel to the New York City Health and Hospitals Corporation, the nation’s largest municipal hospital system, with eleven hospitals and four long-term care facilities totaling 7,411 beds, located in New York City.
  • Bond counsel to the Dartmouth-Hitchcock Health System, based in Lebanon, New Hampshire, with two hospitals and a multi-specialty physician group practice, totaling over 500 acute care beds, in New Hampshire and Massachusetts.
  • System financing counsel for Loyola University Health System, based in Chicago, Illinois, which consists of two acute care hospitals and fifteen ambulatory sites, with a total of 700 acute care beds.
  • Bond counsel to MaineHealth, a multi-hospital system, including Maine Medical Center, based in Portland, Maine, with over 800 acute care and nursing home beds.
  • Financing counsel to Albert Einstein Health Network in Philadelphia, Pennsylvania, with 1,237 acute care beds.
  • Bond counsel to BayCare Health System, a seven hospital system based in Tampa and Clearwater, Florida, with 2,622 licensed beds.
  • Bond counsel to Covenant Health System, based in Lexington, Massachusetts, with thirteen facilities in Massachusetts, New Hampshire, Maine, Connecticut, Pennsylvania and Vermont, with 553 acute care hospital beds, 1,014 skilled nursing beds, 64 residential care beds, 293 assisted living units and 322 independent or congregate housing units.
  • Financing counsel to Princeton HealthCare System in Princeton, New Jersey.
  • Underwriter’s counsel for most national and many regional investment banking firms for health care financings, including, in addition to those cited above, the following multi-facility health care systems:  Hawaii Pacific Obligated Group in Honolulu, Hawaii; University Hospitals Health System in Cleveland, Ohio; Baptist Memorial Health System in Memphis, Tennessee; Carilion Health System in Roanoke, Virginia; University of Arizona Health System in Tucson, Arizona; South Florida Baptist Health System in South Miami, Florida; Wake Forest-North Carolina Baptist Health System in Winston-Salem, North Carolina; University of Tennessee Health System in Knoxville, Tennessee; Meridian Health System in Neptune, New Jersey; Health Quest System in Poughkeepsie, New York and Hackensack University Medical Center in Hackensack, New Jersey. 


Acquisition Financings and Hospital Consolidations

Hawkins is at the forefront in serving as bond counsel to health care systems being formed upon the merger or consolidation of existing systems. This national trend is permitting not-for-profit hospital systems to compete in an increasingly hostile health care delivery market by centralizing management and consolidating services. One of the financing techniques employed by these hospitals is “acquisition financing,” whereby the new corporation is treated as purchasing the assets of the predecessor corporations for tax purposes. If the consolidation is properly structured to satisfy the Internal Revenue Code’s requirements with respect to control, related parties, asset allocations, and valuation of assets, acquisition financing permits the existing indebtedness to be extinguished as part of the acquisition, without the necessity of complying with the Code’s requirements for advance refundings.


Service to the Largest Municipal Hospital System in the Nation

In 1996, we were selected to serve as Bond Counsel for the New York City Health and Hospitals Corporation, which operates the largest municipal hospital system in the nation. The Corporation operates seven health care networks and has over 35,900 employees and had an annual operating budget of over $4.3 billion during fiscal year 2002. The Corporation currently operates through its seven health care networks eleven acute care hospitals operating 4,585 beds (which include major teaching and tertiary care facilities), and five long-term care facilities operating 2,826 beds. Since 1997, we have served as Bond Counsel to the Corporation in connection with six major financings aggregating in excess of $2,230,000,000 in bonds issued.


Use of Moral Obligation Debt for Health Care

In the fall of 1991, the authorizing legislation for the Maine Health and Higher Educational Facilities Authority was amended to create a “moral obligation” reserve fund replenishment mechanism whereby in the event a college, university or health care facility defaulted on a loan from the Authority, the Authority was authorized to request the Maine State Treasurer to deposit funds of the State into a separate reserve fund to satisfy bondholders. The Hawkins team drafted the appropriate resolutions, indentures and loan agreements to bring into effect the new State law. Maine’s moral obligation reserve fund bonds are not a debt of the State and payments are subject to appropriation. Since the implementation of the moral obligation program in 1991, Hawkins has served as bond counsel for over 70 bond issues on behalf of more than one hundred not-for-profit and for-profit educational and health care institutions.


The moral obligation reserve fund has assisted health care institutions in Maine, including institutions that have investment grade ratings such as Maine Medical Center, Eastern Maine Medical Center and Southern Maine Medical Center, by reducing overall borrowing costs. The benefit of the moral obligation program is more dramatic for the smaller institutions such as Houlton Regional Hospital, Maine Coast Regional Hospital and Penobscot Bay Medical Center, which may not have had access to the bond market without the moral obligation program.

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