Chapter 10.B.1 (or 4.B.1.) -- Nonprofit Organization and Conversions

For discussion of the corporate governance issues arising from the collabpse of Enron, and addressed in the Sarbanes-Oxley Act, see Robert W. Friz, et al., The Sarbanes-Oxley Act: Considerations for Nonprofit Health Care Organizations, 18(5) The Health Lawyer 1 (June 2006); Michael J. Myers, Juxtaposing Sarbanes-Oxley with JCAHO governance standards: a shortcut to auditable health system compliance? 51 S.D. L. Rev. 465-468 (2006); Glenn T. Troyer, David E. Jose and Andrea D. Brashear, Governance issues for nonprofit healthcare organizations and the implications of the Sarbanes-Oxley Act, 1 Ind. Health L. Rev. 175-211 (2004); Symposium, Corporate Ethics and Governance in the Health Cre Marketplace, 3 Seattle J. Soc. Justice 205 (2004); James G. Wiehl, Roles and Responsibilities of Nonprofit Health care Board members in the Post-Enron Era, 25 J. Leg. Med. 411 (2004).

An outstanding collection of information and resources about nonprofit hospital conversions can be found on this web site maintained at Duke University:

Upholding a regulator's refusal to allow a Blue Cross plan in Washington State to convert to for-profit status, see Premera v. Kreidler, 131 P.3d 930 (Wash.App. 2006).

For additional discussion of whether the nonprofit form should be favored in health care, see Symposium, 25(4) Health Aff. w287 (Aug. 2006); Kathleen Boozang & Tim Greaney, Mission, Margin & Trust in the Nonprofit Healthcare Enterprise, 5 Yale J. Health Pol’y, L. & Ethics 1 (2005); Jill R. Horwitz, Why we need the independent sector: the behavior, law, and ethics of not-for-profit hospitals, 50 UCLA L. Rev. 1345-1411 (2003).

To settle the government's fraud investigation and associated lawsuits, HCA (formerly Columbia) agreed to pay a record $1.7 billion.  12 BNA Health L. Rep. 1033 (2003).  Additional abuses emerged relating to another for-profit hospital corporate, Tenet Healthcare, which also agreed to a very large settlement, of nearly $900 million.  See generally Elizabeth A. Weeks, Gauging the Cost of Loopholes: Health Care Pricing and Medicare Regulation in the Post-Enron Era, 40 Wake Forest L. Rev. 1215 (2005).

See generally, Arthur B. LaFrance, Merger of Religious and Public Hospitals: Render Unto Ceaser, 3 Seattle J. Soc. Justice 229 (2004).

Return to home page.