WEBVTT 1 00:00:00.630 --> 00:00:03.540 Hi everyone, and welcome back to module three. 2 00:00:03.540 --> 00:00:05.910 In this lecture, I'm going to be presenting an overview 3 00:00:05.910 --> 00:00:09.090 of the financial management of healthcare organizations. 4 00:00:09.090 --> 00:00:11.640 Last week, we looked at macro level considerations 5 00:00:11.640 --> 00:00:14.490 of the global and global environments in which healthcare 6 00:00:15.625 --> 00:00:16.648 organizations operate, 7 00:00:16.648 --> 00:00:17.850 and this week we'll be building upon those lessons 8 00:00:17.850 --> 00:00:19.740 to look at micro level decisions unique 9 00:00:19.740 --> 00:00:20.850 to the financial decisions 10 00:00:20.850 --> 00:00:23.670 of healthcare managers when their organizations operate 11 00:00:23.670 --> 00:00:27.123 within complex, often multinational environments. 12 00:00:27.990 --> 00:00:30.450 In this lecture, we'll be discussing long-term financial 13 00:00:30.450 --> 00:00:33.750 planning, major financial decision making tools, 14 00:00:33.750 --> 00:00:37.470 market entry strategies, access to investment capital, 15 00:00:37.470 --> 00:00:39.543 and short-term financial considerations. 16 00:00:40.442 --> 00:00:43.140 Key concepts include the revenue cycle, 17 00:00:43.140 --> 00:00:46.560 common payment methods, capitation and global budgets, 18 00:00:46.560 --> 00:00:48.570 and value based payments. 19 00:00:48.570 --> 00:00:50.820 The revenue cycle refers to the timeframe 20 00:00:50.820 --> 00:00:53.620 between the delivery of care and the receipt of payment. 21 00:00:55.035 --> 00:00:57.870 The majority of revenue for healthcare delivery comes 22 00:00:57.870 --> 00:01:00.626 through some combination of the following 23 00:01:00.626 --> 00:01:01.980 eight basic payment methods. 24 00:01:01.980 --> 00:01:03.180 Per time period, 25 00:01:03.180 --> 00:01:08.180 per beneficiary, per recipient, per episode, per day, 26 00:01:08.190 --> 00:01:12.720 per service, per dollar of cost, and per dollar of charges. 27 00:01:12.720 --> 00:01:15.540 The per dollar of cost method is rarely used. 28 00:01:15.540 --> 00:01:19.320 There are also newer, more innovative methods related 29 00:01:19.320 --> 00:01:22.170 to the value-based payments discussed last week. 30 00:01:22.170 --> 00:01:24.450 In these systems, providers can be incentivized 31 00:01:24.450 --> 00:01:26.640 to provide high quality care. 32 00:01:26.640 --> 00:01:29.460 Many managed care organizations use an inverted revenue 33 00:01:29.460 --> 00:01:31.050 cycle in which payments, 34 00:01:31.050 --> 00:01:33.450 payment comes before the delivery of healthcare. 35 00:01:34.405 --> 00:01:38.040 Per time period and per beneficiary payment methods 36 00:01:38.040 --> 00:01:42.450 provide examples of a capitation in global budget systems. 37 00:01:42.450 --> 00:01:44.760 In these methods, the payments cover patients over 38 00:01:44.760 --> 00:01:46.680 a predefined timeframe. 39 00:01:46.680 --> 00:01:49.290 Capitation refers to the payment of a fixed amount 40 00:01:49.290 --> 00:01:51.906 for a predefined set of services for a predefined population 41 00:01:51.906 --> 00:01:53.853 for a specific time period. 42 00:01:55.290 --> 00:01:58.890 Budget development is a key aspect of the strategic 43 00:01:58.890 --> 00:02:01.290 and financial planning process. 44 00:02:01.290 --> 00:02:03.630 Strategic management is the ongoing process 45 00:02:03.630 --> 00:02:05.520 by which a healthcare organization assesses 46 00:02:05.520 --> 00:02:07.440 the environment in which it operates. 47 00:02:07.440 --> 00:02:10.350 Appraises its current direction and market position, 48 00:02:10.350 --> 00:02:11.790 determines the most appropriate 49 00:02:11.790 --> 00:02:14.280 strategic direction going forward, and then develops 50 00:02:14.280 --> 00:02:15.810 and influence goals, objectives, 51 00:02:15.810 --> 00:02:19.320 and action plans to accomplish this strategy. 52 00:02:19.320 --> 00:02:21.453 Strategy should always drive structure. 53 00:02:22.350 --> 00:02:23.700 Financial metrics can be used 54 00:02:23.700 --> 00:02:26.100 to gauge the ongoing accomplishments of financial 55 00:02:26.100 --> 00:02:27.570 and strategic objectives 56 00:02:27.570 --> 00:02:29.913 and can be measured with a balanced scorecard. 57 00:02:30.810 --> 00:02:33.360 Most organizations have a periodic budget cycle in 58 00:02:33.360 --> 00:02:35.220 which budgets are developed. 59 00:02:35.220 --> 00:02:39.300 This budget cycle can be yearly, monthly, bi-yearly, 60 00:02:39.300 --> 00:02:41.733 bi-annually, et cetera. 61 00:02:44.280 --> 00:02:46.770 Next, I like this flow chart of strategic 62 00:02:46.770 --> 00:02:51.180 and financial planning because it really gets at the steps 63 00:02:51.180 --> 00:02:54.390 that one needs to take in order to build a strategic plan. 64 00:02:54.390 --> 00:02:58.950 So is you begin by looking at 65 00:02:58.950 --> 00:03:03.510 to see what are the vision and mission of an organization, 66 00:03:03.510 --> 00:03:06.090 and then what strategies can be developed 67 00:03:06.090 --> 00:03:07.170 to fulfill the goals 68 00:03:07.170 --> 00:03:09.300 and objectives of an organization that are in line 69 00:03:09.300 --> 00:03:10.563 with its vision mission. 70 00:03:11.400 --> 00:03:12.720 After building these strategies, 71 00:03:12.720 --> 00:03:14.570 you assess their financial viability. 72 00:03:15.540 --> 00:03:16.890 Are they financially viable? 73 00:03:16.890 --> 00:03:19.530 If yes, then proceed to budget development. 74 00:03:19.530 --> 00:03:23.130 If not, return back to the strategic planning side 75 00:03:23.130 --> 00:03:27.060 of the flow chart and try again to develop a, a program 76 00:03:27.060 --> 00:03:28.980 or service that meets your goals and objectives 77 00:03:28.980 --> 00:03:30.603 and is financially viable. 78 00:03:31.903 --> 00:03:36.903 Next, this diagram provides an excellent illustration 79 00:03:37.170 --> 00:03:39.600 of the budget development process. 80 00:03:39.600 --> 00:03:41.880 The first months begin with strategic assessment 81 00:03:41.880 --> 00:03:45.120 and guidance from senior leadership, clarification of goals 82 00:03:45.120 --> 00:03:47.320 and objectives for the upcoming budget year, 83 00:03:48.442 --> 00:03:50.610 analysis of historical workload and expenditures 84 00:03:50.610 --> 00:03:52.110 and development of the initial draft 85 00:03:52.110 --> 00:03:54.990 of the proposed budget for the upcoming year. 86 00:03:54.990 --> 00:03:57.270 These plans are then sent to managers to learn about 87 00:03:57.270 --> 00:03:59.610 how they will influence resource requirements 88 00:03:59.610 --> 00:04:01.143 and workload expectations. 89 00:04:02.280 --> 00:04:04.080 As the planning year continues, 90 00:04:04.080 --> 00:04:07.680 lower level input is incorporated into the proposed budget. 91 00:04:07.680 --> 00:04:08.970 The key to budget development is 92 00:04:08.970 --> 00:04:11.420 that budget should not be developed in isolation. 93 00:04:12.953 --> 00:04:16.410 Next, let's look at capital project analysis. 94 00:04:16.410 --> 00:04:18.690 So far, we've largely been discussing short-term 95 00:04:18.690 --> 00:04:20.790 financial management issues. 96 00:04:20.790 --> 00:04:22.140 Now we're going to pivot 97 00:04:22.140 --> 00:04:24.570 to discussing strategies managers use in shaping 98 00:04:24.570 --> 00:04:27.273 the long-term future directions of organizations. 99 00:04:28.530 --> 00:04:31.260 Capital project analysis is the most important long-term 100 00:04:31.260 --> 00:04:32.580 financial decision making tool 101 00:04:32.580 --> 00:04:35.220 for healthcare managers to understand. 102 00:04:35.220 --> 00:04:37.440 It is a formal process that involves the assessment 103 00:04:37.440 --> 00:04:39.780 of all the costs and benefits of a potential investment 104 00:04:39.780 --> 00:04:42.630 that is large enough to significantly expand the scale 105 00:04:42.630 --> 00:04:45.150 or scope of an organization. 106 00:04:45.150 --> 00:04:47.700 Examples of capital projects include acquisitions 107 00:04:47.700 --> 00:04:49.860 of other healthcare organizations, 108 00:04:49.860 --> 00:04:52.530 construction of new healthcare facilities, 109 00:04:52.530 --> 00:04:55.159 major expansion of the scale of operations, 110 00:04:55.159 --> 00:04:58.980 purchases of major pieces of equipment, et cetera. 111 00:04:58.980 --> 00:05:00.870 The goal of capital project analysis is 112 00:05:00.870 --> 00:05:02.940 to determine whether the project serves the best 113 00:05:02.940 --> 00:05:04.473 interest of your stakeholders. 114 00:05:05.562 --> 00:05:09.781 For the case of for-profit businesses, 115 00:05:09.781 --> 00:05:12.690 that should involve 116 00:05:12.690 --> 00:05:14.580 or that should be based on maximizing the wealth 117 00:05:14.580 --> 00:05:18.420 of major stakeholder groups, primarily the owners. 118 00:05:18.420 --> 00:05:19.740 In a government organization 119 00:05:19.740 --> 00:05:21.630 that involves maximizing the net benefit 120 00:05:21.630 --> 00:05:23.520 to the public at large, 121 00:05:23.520 --> 00:05:26.520 and in a non-profit, non-governmental organization, 122 00:05:26.520 --> 00:05:28.470 the goal should be to maximize the net benefit 123 00:05:28.470 --> 00:05:31.200 to the organization's community of focus, 124 00:05:31.200 --> 00:05:32.850 whatever that community might be. 125 00:05:34.964 --> 00:05:39.964 Next, we turn to the steps in capital project analysis. 126 00:05:41.040 --> 00:05:43.500 The first step is determining which projects align 127 00:05:43.500 --> 00:05:46.320 with the strategic direction of an organization. 128 00:05:46.320 --> 00:05:48.720 Projects that do not serve the long-term interests 129 00:05:48.720 --> 00:05:49.770 of the organization tend 130 00:05:49.770 --> 00:05:52.890 to be rejected at this early stage without expending further 131 00:05:52.890 --> 00:05:55.890 time and energy on a more thorough analysis. 132 00:05:55.890 --> 00:05:58.500 The next stage involves estimating the projected cash flows 133 00:05:58.500 --> 00:06:00.570 associated with the project. 134 00:06:00.570 --> 00:06:05.063 Cash flows are broken into cash outflows and cash inflows. 135 00:06:05.063 --> 00:06:08.430 Next, it is important to calculate many financial metrics 136 00:06:08.430 --> 00:06:10.320 that are designed to provide key leaders 137 00:06:10.320 --> 00:06:11.700 with information about the overall 138 00:06:11.700 --> 00:06:14.040 profitability of the project. 139 00:06:14.040 --> 00:06:16.324 After determining the profitability of an investment, 140 00:06:16.324 --> 00:06:18.840 the final steps are to compete for funding 141 00:06:18.840 --> 00:06:21.601 and implement the project or investment. 142 00:06:21.601 --> 00:06:24.720 Common metrics used in capital project 143 00:06:24.720 --> 00:06:26.673 analysis include the following. 144 00:06:27.570 --> 00:06:30.690 The payback period is a metric that indicates the length 145 00:06:30.690 --> 00:06:32.782 of time needed for a project to break even 146 00:06:32.782 --> 00:06:34.590 by bringing in sufficient funding 147 00:06:34.590 --> 00:06:37.077 to pay back the initial investment. 148 00:06:37.077 --> 00:06:40.530 The discounted payback period is a closely related metric 149 00:06:40.530 --> 00:06:42.720 that takes into account the buying power 150 00:06:42.720 --> 00:06:44.820 of future cash inflows when adjusted 151 00:06:44.820 --> 00:06:46.220 for the time value of money. 152 00:06:47.160 --> 00:06:49.770 The most common metric for capital project analysis 153 00:06:49.770 --> 00:06:52.860 is the net present value or the NPV. 154 00:06:52.860 --> 00:06:54.690 This represents the overall dollar value 155 00:06:54.690 --> 00:06:56.040 of the project to the organization 156 00:06:56.040 --> 00:06:59.013 considering all cash flows over the life of the project. 157 00:07:00.330 --> 00:07:01.890 The internal rate of return 158 00:07:01.890 --> 00:07:04.140 or the closely related modified internal rate 159 00:07:04.140 --> 00:07:06.450 of return refers to the percentage rate 160 00:07:06.450 --> 00:07:07.950 that the project earns over the course 161 00:07:07.950 --> 00:07:09.510 of its life. 162 00:07:09.510 --> 00:07:11.850 The rate of return is compared to the investor's rate 163 00:07:11.850 --> 00:07:13.650 of return when they provide investment capital 164 00:07:13.650 --> 00:07:15.630 through the capital markets. 165 00:07:15.630 --> 00:07:18.540 And finally, the profitability index refers to the ratio 166 00:07:18.540 --> 00:07:21.540 between the present value of future cash flows, 167 00:07:21.540 --> 00:07:22.953 and the initial investment. 168 00:07:25.290 --> 00:07:28.200 Now after deciding to enter a new market, 169 00:07:28.200 --> 00:07:30.630 how can an organization do this? 170 00:07:30.630 --> 00:07:32.313 There are five common strategies. 171 00:07:33.360 --> 00:07:35.400 Exporting goods and services, 172 00:07:35.400 --> 00:07:38.070 licensing or franchising agreements, 173 00:07:38.070 --> 00:07:40.693 foreign production of goods and services, 174 00:07:40.693 --> 00:07:45.183 strategic alliances and partnerships and joint ventures. 175 00:07:46.230 --> 00:07:47.520 The exports of goods 176 00:07:47.520 --> 00:07:49.710 and services primarily occurs with the sale 177 00:07:49.710 --> 00:07:52.800 of pharmaceuticals and the manufacturing of pharmaceuticals 178 00:07:52.800 --> 00:07:54.363 and durable medical equipment. 179 00:07:55.800 --> 00:07:58.290 Licensing and franchising referment 180 00:07:58.290 --> 00:08:01.260 or licensing and franchising agreements refer to 181 00:08:01.260 --> 00:08:02.850 what happens when a home organization 182 00:08:02.850 --> 00:08:04.170 grants a foreign organization 183 00:08:04.170 --> 00:08:07.260 the rights use its intellectual property in the case 184 00:08:07.260 --> 00:08:09.840 of a license or its business model. 185 00:08:09.840 --> 00:08:11.790 In the case of a franchising agreement 186 00:08:11.790 --> 00:08:13.230 for a prescribed period 187 00:08:13.230 --> 00:08:15.210 in exchange for a predetermined fee 188 00:08:15.210 --> 00:08:16.773 or a share of the profits. 189 00:08:17.640 --> 00:08:20.310 These models outsource most of their financial risk 190 00:08:20.310 --> 00:08:22.623 onto external participants in the new market. 191 00:08:23.820 --> 00:08:26.730 The other three strategies we'll discuss take on a lot 192 00:08:26.730 --> 00:08:28.830 of the financial risk. 193 00:08:28.830 --> 00:08:29.880 Foreign production of goods 194 00:08:29.880 --> 00:08:31.260 and services, for example, 195 00:08:31.260 --> 00:08:33.090 occurs when a health organization chooses 196 00:08:33.090 --> 00:08:34.740 to directly establish 197 00:08:34.740 --> 00:08:37.203 and manage new operations in a foreign country. 198 00:08:38.329 --> 00:08:40.530 Next, strategic alliances 199 00:08:40.530 --> 00:08:43.830 or partnerships occur when organizations collaborate, 200 00:08:43.830 --> 00:08:45.840 but remain separate entities. 201 00:08:45.840 --> 00:08:47.675 One example of this is the public, 202 00:08:47.675 --> 00:08:49.710 public-private partnership. 203 00:08:49.710 --> 00:08:52.980 And lastly, joint ventures describe what happens when two 204 00:08:52.980 --> 00:08:54.480 or more organizations come together 205 00:08:54.480 --> 00:08:57.480 to establish a new entity that is jointly owned 206 00:08:57.480 --> 00:09:00.153 and controlled by pooling resources and expertise. 207 00:09:03.330 --> 00:09:05.970 Next, let's talk a little bit about risk. 208 00:09:05.970 --> 00:09:08.010 Major sources of risk in global health 209 00:09:08.010 --> 00:09:09.780 include the following. 210 00:09:09.780 --> 00:09:11.850 Regulatory or legal risk, 211 00:09:11.850 --> 00:09:14.130 which is largely a factor of the level 212 00:09:14.130 --> 00:09:16.430 of government involvement in private industry. 213 00:09:17.820 --> 00:09:21.060 Political risk related to a country's political stability, 214 00:09:21.060 --> 00:09:22.200 and it's important to note 215 00:09:22.200 --> 00:09:24.360 that political instability can lead 216 00:09:24.360 --> 00:09:25.904 to increased government surveillance 217 00:09:25.904 --> 00:09:27.870 or even expropriation 218 00:09:27.870 --> 00:09:29.883 or the government taking of assets. 219 00:09:31.080 --> 00:09:33.570 The currency or exchange rate risk. 220 00:09:33.570 --> 00:09:34.920 This describes the fact 221 00:09:34.920 --> 00:09:37.110 that any cash flows resulting from operations within 222 00:09:37.110 --> 00:09:38.940 a country will be affected by the stability 223 00:09:38.940 --> 00:09:40.950 of the country's currency. 224 00:09:40.950 --> 00:09:44.400 So when an organization repatriates foreign currency 225 00:09:44.400 --> 00:09:46.080 to its own home country, 226 00:09:46.080 --> 00:09:47.730 the company must convert those earnings 227 00:09:47.730 --> 00:09:50.160 to its home currency, which is directly tied 228 00:09:50.160 --> 00:09:51.900 to exchange rates. 229 00:09:51.900 --> 00:09:55.080 So for example, a US-based corporation 230 00:09:55.080 --> 00:09:59.250 that's doing work in Cameroon and earning Cameroonian francs 231 00:09:59.250 --> 00:10:01.530 or Central African francs would then have 232 00:10:01.530 --> 00:10:04.830 to convert those francs to United States dollars 233 00:10:04.830 --> 00:10:08.403 before bringing them back to its home by the home country. 234 00:10:09.750 --> 00:10:11.460 Finally, capital access. 235 00:10:11.460 --> 00:10:14.160 Organizations may choose to transfer investment capital 236 00:10:14.160 --> 00:10:16.260 from their home country to a foreign country, 237 00:10:16.260 --> 00:10:19.680 or they may seek investment capital in the foreign setting. 238 00:10:19.680 --> 00:10:21.840 Different countries have different capital markets, 239 00:10:21.840 --> 00:10:23.640 and we'll talk about this a little bit more in 240 00:10:23.640 --> 00:10:24.813 a couple of slides. 241 00:10:26.368 --> 00:10:29.910 This chart shows the average long-term lending rates across 242 00:10:29.910 --> 00:10:33.000 countries with varying levels of economic development. 243 00:10:33.000 --> 00:10:35.130 The chart shows that higher income countries provide 244 00:10:35.130 --> 00:10:37.830 healthcare organizations with lower interest rates 245 00:10:37.830 --> 00:10:40.323 and therefore lower borrowing costs. 246 00:10:44.130 --> 00:10:47.220 This figure depicts the distribution 247 00:10:47.220 --> 00:10:50.010 of corporate tax rates around the world. 248 00:10:50.010 --> 00:10:52.680 You'll see the majority of countries have tax rates 249 00:10:52.680 --> 00:10:55.620 between 20 and 30%, though there are some countries 250 00:10:55.620 --> 00:10:58.283 that have rates as high as 40 to 50%. 251 00:11:01.260 --> 00:11:03.840 This chart provides information about the prevalence 252 00:11:03.840 --> 00:11:06.420 of stock exchanges around the world. 253 00:11:06.420 --> 00:11:09.150 Note that most companies list their stock on a primary 254 00:11:09.150 --> 00:11:12.750 exchange and once listed the stock trades on other exchanges 255 00:11:12.750 --> 00:11:15.500 that have trading relationships with the main exchange. 256 00:11:16.380 --> 00:11:18.390 These additional exchanges provide investors 257 00:11:18.390 --> 00:11:20.583 with additional liquidity for their shares. 258 00:11:26.190 --> 00:11:29.190 Next, as I mentioned, this is the depiction 259 00:11:29.190 --> 00:11:31.747 of the total market capitalization of all 260 00:11:31.747 --> 00:11:36.747 countries listed within the world regions. 261 00:11:36.750 --> 00:11:40.200 By far, most of the equity market depth is concentrated 262 00:11:40.200 --> 00:11:42.420 within the high income regions of North America, 263 00:11:42.420 --> 00:11:44.250 Asia, and Europe. 264 00:11:44.250 --> 00:11:46.710 Organizations in lower income countries face significant 265 00:11:46.710 --> 00:11:49.500 constraints to equity investment and access to capital 266 00:11:49.500 --> 00:11:51.723 because of the severe lack of market depth. 267 00:11:53.280 --> 00:11:55.680 Finally, let's look at some of the short-term considerations 268 00:11:55.680 --> 00:11:58.830 that are key to the success of an organization. 269 00:11:58.830 --> 00:12:01.260 Cash management in global context requires the holding 270 00:12:01.260 --> 00:12:03.180 of cash balances in multiple countries to pay 271 00:12:03.180 --> 00:12:05.940 for day-to-day business expenditures while dealing 272 00:12:05.940 --> 00:12:09.300 with the constraints of multiple legal and tax systems. 273 00:12:09.300 --> 00:12:10.410 Another critical aspect 274 00:12:10.410 --> 00:12:13.530 of cash management is the cash concentration system, 275 00:12:13.530 --> 00:12:15.660 which combines funds from separate accounts 276 00:12:15.660 --> 00:12:19.050 into a single account for more efficient management. 277 00:12:19.050 --> 00:12:22.050 Related to cash management is managing exposure 278 00:12:22.050 --> 00:12:24.120 to exchange rate differences. 279 00:12:24.120 --> 00:12:26.280 There are three main kinds of risk. 280 00:12:26.280 --> 00:12:28.710 Transaction exposure refers to the fluctuation 281 00:12:28.710 --> 00:12:30.150 of exchange rates between the time 282 00:12:30.150 --> 00:12:31.500 that a transaction's agreed to 283 00:12:31.500 --> 00:12:32.700 and the time to payment. 284 00:12:33.540 --> 00:12:36.990 Translation exposure occurs when a company reports overseas 285 00:12:36.990 --> 00:12:39.390 exposures on its balance sheet. 286 00:12:39.390 --> 00:12:41.550 One way to solve this is to offset the value 287 00:12:41.550 --> 00:12:43.620 of a firm's assets in a particular currency 288 00:12:43.620 --> 00:12:46.593 with the equal value of liabilities in the same currency. 289 00:12:47.490 --> 00:12:49.710 And thirdly, economic exposure refers 290 00:12:49.710 --> 00:12:51.780 to changes in exchange rates influencing the value 291 00:12:51.780 --> 00:12:55.350 of future cash flows from long-term transactions. 292 00:12:55.350 --> 00:12:57.540 One solution is to use a flexible sourcing 293 00:12:57.540 --> 00:12:59.583 to offset expected cash flows. 294 00:13:00.570 --> 00:13:03.600 There are also numerous strategies to manage financial risk. 295 00:13:03.600 --> 00:13:05.520 One of these is hedging for the purchasing 296 00:13:05.520 --> 00:13:07.952 of a financial investment for the purpose 297 00:13:07.952 --> 00:13:09.609 of reducing the risk of adverse price 298 00:13:09.609 --> 00:13:10.980 movements in another asset. 299 00:13:10.980 --> 00:13:12.450 Another is transfer pricing 300 00:13:12.450 --> 00:13:14.310 or establishing the price at which one unit 301 00:13:14.310 --> 00:13:16.020 of an organization transfers a good 302 00:13:16.020 --> 00:13:17.913 to another unit of an organization. 303 00:13:19.200 --> 00:13:21.870 Finally, another key responsibility of managers is 304 00:13:21.870 --> 00:13:24.090 to raise short-term financing. 305 00:13:24.090 --> 00:13:27.033 In the US his is commonly done through commercial paper, 306 00:13:27.955 --> 00:13:29.730 bank loans, and secured short-term debt. 307 00:13:29.730 --> 00:13:31.950 Commercial paper is debt issued by firms 308 00:13:31.950 --> 00:13:33.363 and sold to investors. 309 00:13:34.251 --> 00:13:37.410 Finally, here are the conclusions for this module. 310 00:13:37.410 --> 00:13:39.010 I hope you enjoyed this lecture.