Thursday, January 24, 2008

remembering AHERF

Speaking of financial miasmas. This article was literally just published and talks about the calamity otherwise known as Pittsburgh's own Allegheny Health Education and Research Foundation. See:


Can a violation of investor trust lead to financial contagion in the market for tax-exempt hospital bonds? by Patrick M. Bernet and Thomas E. Getzen. International Journal of Health Care Finance and Economics. Friday, November 23, 2007.


I can't put it up in its entirety but here is the abstract:


"Not-for-profit hospitals rely heavily on tax-exempt debt. Investor confidence in such instruments was shaken by the 1998 bankruptcy of the Allegheny Health and Education Research Foundation (AHERF), which was the largest U.S. not-for-profit failure up to that date and whose default was accompanied by claims of accounting irregularities. Such shocks can result in contagion whereby all hospitals are viewed as riskier. We test for the significance and duration of resulting contagion using an industry-specific model of interest cost determinants. Empirical tests indicate that contagion does occur, resulting in higher interest on new debt issues from other hospitals. "


I was thinking of offering a prize if anyone out there could prove they found and read this article... anyone other than Fester that is, he has probably read it already.

1 Comments:

Blogger Bram Reichbaum said...

Easy. I just bought Root Shock. Nice to dangle a prize, though.

Thursday, January 24, 2008 4:48:00 PM  

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