A final government report on conversions of not-for-profit hospitals to for-profit status is no more damning than an earlier draft version that found nothing seriously wrong with the transactions.
When the draft report surfaced last fall (Nov. 10, 1997, p. 2), representatives of the for-profit hospital industry, who have defended hospital conversions, feared the report would never see the light of day because it wasn't critical enough. Or they feared that not-for-profit advocates would pressure the General Accounting Office to make the report more harsh.
But the two congressmen who requested the report released the final version last week with few changes. Reps. Pete Stark (D-Calif.), a vocal critic of not-for-profit conversions, and William Coyne (D-Pa.) requested the study in the fall of 1996.
Like the draft, the final report's chief criticism of hospital conversions was the lack of community involvement in the decision to sell a not-for-profit hospital to a for-profit company. The report noted that may change as more states adopt public disclosure laws covering such hospital transactions. At least 25 states have laws on the books or are considering such legislation.
The 50-page report looked at 14 conversions made from 1993 to 1996. The report found that in most cases the for-profit buyers paid fair-market value or more for the not-for-profit hospitals, which appropriately used that money to set up new charities.
"The report is fair," said Thomas Scully, president of the Federation of American Health Systems, which represents for-profit hospitals. He said he had been concerned that the final report would be slanted.
Linda Miller, president of the Volunteer Trustees Foundation for Research and Education, criticized how the GAO put the report together. Because of confidentiality agreements, the GAO said it had access to few transaction documents and instead relied mainly on discussions with officials involved in the deals.
In a statement, Stark blasted the not-for-profits and their for-profit suitors for failing to provide the GAO with complete copies of their transaction agreements. He has called for greater public scrutiny of the deals.