NOT-FOR-PROFIT HOSPITALS: Deals May Get Tougher Scrutiny
Several recent mergers among not-for-profit hospitals have led California legislators to consider a law that "would subject deals between not-for-profit hospitals to the same level of scrutiny as deals involving for-profit buyers," this week's Modern Healthcare reports. While not-for-profit facilities are already required to obtain state attorney general approval before proceeding with business deals, the bill would require the attorney general to notify communities of the facility's intent and hold at least one public meeting on the matter before consenting to the deal. The bill's sponsor, state Assemblyman Gilbert Cedillo (D-Los Angeles), said, "We have a duty to protect the public trust, and that's what [this] law does." Consumers Union also expressed support, noting, "In this managed care market, many nonprofits are starting to act as for- profits." Meanwhile, the not-for-profits, including a group of Catholic hospitals and Sutter Health, have expressed concern over the bill's requirement that health systems hoping to proceed with the "sale, transfer or lease" of assets to another not-for-profit reveal their competitive strategies. Currently, 11 states maintain laws that regulate not-for-profit mergers (Bellandi, 5/24 issue).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.