HOSPITAL CONVERSIONS: AARP Takes A Closer Look
Modern Healthcare reports that the American Association of Retired Persons "is studying the differences between for-profit and not-for-profit hospitals." The seniors group "hired the Washington-based Alpha Center" to conduct the study, which will focus on "conversions of hospitals from not-for-profit to for-profit" status. "Hospital conversions have a direct effect on our membership," said AARP spokesperson Greg Marchildon. However, the group "wouldn't comment on what it plans to do with results of the study, which could be released as early as this spring." Alpha Center Vice President Debra Chollet said her group "is gathering data and performing interviews" for the study, which "it expects ... to be released in the next few weeks." According to Chollet, researchers are "using published articles and research for its study, as well as" interviews with "hospital executives and community representatives." The report will examine seven hospital conversions, observing "acute-care private or publicly owned not-for-profits purchased by doctors, individuals or hospital companies." Included in the study are specific hospitals purchased by Columbia/HCA Healthcare Corp., Tenet Healthcare Corp. and Community Health Systems. Chollet noted one consistent finding thus far: "They (the new for-profit owner) will often hire a collection agency to boost revenue, but often the relationship with the community isn't the same after" ownership changes (Japsen, 4/6 issue).
Attorneys General Step Forward
In related news, Modern Healthcare reports that the National Association of Attorneys General recently unveiled model state legislation governing "conversions of not-for-profit health care facilities." Under the proposed guidelines, not-for-profit facilities seeking to convert to for-profit status or to affiliate with a for-profit owner would be required to meet three primary requirements. First, they would have to provide "written notice of their intentions to the state attorney general, who must approve or reject the deal within 60 days." Second, they would provide "any and all information the attorney general finds necessary to review the transaction," and third, they would be required to "reimburse the attorney general for expenses incurred while reviewing the conversion." In addition, Modern Healthcare notes that the model legislation recommends "a 10-point checklist of issues to examine when reviewing conversions," such as "benefits to private individuals" and "fair market value for the facility." "The main goal of this model legislation is to ensure that these health care transactions are open to public comment and scrutiny," said Christine Milliken, the NAAG's executive director. The association is "soliciting comments on the guidelines until May 15" and expects to release the final document at the group's summer meeting in July (Hallam, 4/6 issue).