So far in our healthcare series, we’ve shown a sampling of private equity and advisory perspectives. This week we get views from lenders in the sector.

One specialist was instructive. “Healthcare remains local,” she told us. “Florida, for example, is a very different market than the rest of the country. This makes it tough for national players to centralize. We start by analyzing systems to confirm our borrower is an operational leader with a strong clinical and administrative staff.”

What do you diligence to ensure that? “Nurses typically file medical data sets so the provider gets paid by the government,” she said. “If they’re good you’ll get paid what you’re supposed to be paid, otherwise you may leave money on the table. So the quality of information and the knowledge level of the staff is critically important.

“Lenders, and even sponsors, don’t always understand that in patient care facilities, the most junior staffer is as critical as the top doc. They are the daily managers. That applies across the spectrum of care settings – hospital, nursing home, detox, rehab.”

Another top lender in the space agreed. “Operational effectiveness is the most important linchpin,” he said.