Public has little input in hospital deals
Profit / Non Profit Hospital
January 31, 1998
The steady conversion of not-for-profit hospitals into for-profit ventures has generally occurred with little community involvement even though there is a substantial public interest at stake, according to a new report by the General Accounting Office.
The GAO study, which focused on 14 asset sales or joint ventures in six states, concluded that "concerns about the conversion of not-for-profit hospitals and the transfer of millions of dollars in charitable assets still exist, because they are carried out essentially privately between boards of the selling hospitals and management of the purchasing for-profit companies."
According to the GAO, "the community at large was often unaware of the pending sale and uninformed of the sale price or the structure of the transaction, according to the GAO study.
Of the 14 transactions reviewed by the GAO, 12 directed net proceeds to charitable foundations which, in most cases, had "broadly defined missions that primarily focused on health and wellness." Community input on the use of conversion proceeds was obtained through public forums and needs assessments in six of the 14 conversions.
According to the GAO, more than 60 not-for-profit hospitals converted to for-profit status in 1996 alone out of some 5,000 nationally.
For a copy of the report, GAO/HEHS-98-24, call 202-512-6000 or you may download a copy by Internet at www.gao.gov
Public has little input in hospital deals
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