Hospitals Turn to DASNY for Some TELP

By Barbara Benson, Crain's Health Pulse, July 21, 2010

Electronic medical records systems are a big-ticket item for hospitals, with a purchase cost in the tens of millions of dollars. Some New York hospitals recently financed information technology costs using a program run by DASNY that lets them take advantage of tax-exempt lease rates.

The initiative, called the Tax Exempt Leasing Program, financed 24 projects worth $212 million in the state's 2008-2009 fiscal year, up from $171.5 million in the previous year.

“It's a neat little program,” says DASNY President Paul Williams Jr. “But we're concerned it might be underutilized.”

TELP can save hospitals money compared with alternatives: about $100,000 per $1 million, or 10% in borrowing costs. It can be used to fund health information software and hardware. Alternatives to TELP include vendor financing or bank loans, but both are more costly.

“The first time hospitals seriously look at TELP and crunch the numbers, they end up using TELP,” says Art Ware, who runs the program. “They find it isn't bureaucratic, and the process takes only two to three months.”

Recent TELP users include Catholic Health Services of Long Island, for about $90 million in IT projects, and Rochester General Hospital, for about $40 million. The average TELP project is about $6 million.