More than three years after the start of the hospital merger and acquisition boom, the American Hospital Association has issued guidelines to its members on how to handle sticky hospital ownership issues.
The guidelines, approved by the AHA's Board of Trustees at its July 19 meeting in Salt Lake City, are voluntary and not binding on the association's members.
"We want to give our members a road map," said Richard Wade, the AHA's senior vice president for communications. "We want to maximize the public's accountability. There's (currently) no checklist for boards of trustees and executives."
Wade said the AHA's nine regional policy boards worked on the guidelines during their rounds of meetings across the country earlier this year and over the summer.
The AHA board's approval of the guidelines also comes more than two years after a March 1995 summit between the association and representatives of the for-profit and not-for-profit hospital sectors. That meeting was designed to ease tensions between the sectors, which were publicly criticizing each other's commitment to providing cost-effective, high-quality care.
It did little to calm the waters, however, as a number of state legislatures across the country began passing laws designed to increase public scrutiny of hospital mergers and acquisitions.
"The guidelines aren't about just investor-owned (acquisitions of not-for-profits) because most of the change of ownership is not-for-profit," Wade said.
The AHA is encouraging boards of hospitals to adopt these guidelines as policy "before considering any proposal to change ownership or control," a statement on the issue said.
The AHA wants its members to develop policies regarding ownership before considering a deal. It also wants hospitals to notify state regulators and keep them abreast when hospitals change hands.
From trustees to hospital executives, the AHA also wants to make sure parties involved in the transactions keep at arm's length to avoid conflict of interest.
"Disclose all conflicts of interest, offers of future employment, future remuneration, or other benefits related to the transaction," the guidelines say. "Prohibit private inurement or personal financial gain by employees or trustees of any not-for-profit entity involved in the transaction."
All AHA member hospitals and systems will get a copy of the guidelines in September. State and metropolitan associations will be encouraged to pass them on to state regulators and lawmakers, Wade said.