Executives at investor-owned hospital chains are wary of federal interference in local community hospital decisionmaking on sales of not-for-profit hospitals.
Legislation introduced earlier this month by Rep. Fortney "Pete" Stark (D-Calif.) calls for HHS' inspector general's office to have oversight authority on sales of not-for-profit hospitals to for-profit chains (Jan. 13, p. 2).
"The for-profits' allegiance is to their shareholder, not the community-and certainly not the uninsured or poor," Stark said in a statement. "These for-profit hospital chains have the minds of piranha fish and the hearts of Doberman pinschers."
Responded Christie Sulzbach, senior vice president of public affairs at Tenet Healthcare Corp., Santa Barbara, Calif.: "Oversight of the sale of not-for-profit assets is perfectly reasonable, acceptable and desirable, but I don't think something intrinsically local as a hospital's decision about its assets should be made in Washington."
The proposed legislation would give the inspector general authority to determine whether investor-owned companies paid fair market value for any tax-exempt entities they acquire. To make that judgment, for-profit buyers would have to disclose to the government the financial terms of their proposed acquisitions. The information given to the inspector general's office also would be made available to the public.
"We don't have any concerns about paying fair market value," said Thomas Scully, president and chief executive officer of the Federation of American Health Systems, which represents for-profit hospitals.
Representatives of the investor-owned healthcare sector seemed more concerned that local hospital boards be allowed to decide their own fate without interference from Washington. They say oversight by state attorneys general is enough.
"I wouldn't think that the OIG should have regulatory authority over local community hospitals' decisions," Sulzbach said. "It is a community-specific issue that should be decided at the local level."