The Catholic Health Association is distancing itself from for-profit healthcare providers.
The CHA board last month recommended that only not-for-profit organizations be entitled to membership, reversing a bylaw change made a year and a half ago. CHA members will vote on the recommendation at the CHA's annual assembly next June in Minneapolis.
"Because CHA has argued strongly that not-for-profit status is the preferred method of delivering healthcare, there was concern that allowing for-profit members would compromise advocacy efforts related to tax-exempt status," the St. Louis-based CHA said in a statement provided last week to MODERN HEALTHCARE.
With more than $32 billion in estimated revenues, Roman Catholic hospitals are the largest not-for-profit player in healthcare aside from government-owned hospitals, according to MODERN HEALTHCARE's Multi-unit Provider Survey (May 23, p. 36).
Tax-exempt status has been a major part of healthcare debates in Washington and state capitals. It's especially important to the CHA's 570 Catholic hospital members, which account for 14% of the nation's acute-care beds and 10% of the acute-care hospitals.
In 1993, the CHA approved criteria that allowed for-profits in the organization only if they promoted Roman Catholic values, supported the CHA mission and have the approval of their local diocese. Since the change, no for-profits or for-profit subsidiaries applied.
Meanwhile, Catholic hospitals and their burgeoning networks are wrestling with for-profit providers in other parts of the country.
In Chicago, Cardinal Joseph Bernardin, who serves as leader of the Chicago Archdiocese and was elected earlier this year to the CHA board, has encouraged the 20 Catholic hospitals in the archdiocese to avoid business deals with for-profits.
"What we don't want is our weaker hospitals to be picked off by a for-profit with all of their resources and be swallowed up," said the Rev. Michael Place, an adviser to Cardinal Bernardin on healthcare issues.
While it's nothing new for heads of archdioceses to have the final say on the sale of church property in their areas, leaders such as Cardinal Bernardin are expected to step up their interest in Catholic hospital collaborations during these times of intense market activity (June 6, p. 32).
Of the 20 Catholic hospitals in the Chicago Archdiocese, which encompasses Lake and Cook counties, only 11 have opted to be a part of a Catholic healthcare network being formed through the Catholic Health Alliance of Metropolitan Chicago.
The cardinal is encouraging Catholic hospitals to join the Catholic healthcare network, but he also understands non-Catholic hospitals may be needed to ensure the network has ample geographic coverage. However, Catholic hospitals could be stripped of their Catholic status if they join a for-profit organization or jeopardize Catholic missions.
"We want to maintain our presence to the poor," Rev. Place said. He said he doesn't want the network to lose its inner-city presence and only have Catholic hospitals "in the suburbs and on the city's fringes."
Among those that chose another network, were Holy Family Hospital in Des Plaines, Ill., and Oak Park (Ill.) Hospital, which chose the Rush System for Health. Rev. Place said the archdiocese approved their affiliations. He said new discussions with Holy Family and Oak Park also are expected, but that doesn't mean they would be losing their Catholic status or would be given an ultimatum to join the Catholic healthcare network.