Michael Romano's article about hospitals revisiting the purchase of physician practices is relevant for me ("Back in style," Jan. 3, p. 8). I was once an "acquired" physician.
I must confess to remaining utterly chagrined that hospitals could acquire stellar, high-performing practices, mismanage them and then claim that such acquisitions were "ill-advised." Promptly upon divestiture, most of the practices returned to their prior successful operation. Now how can that be?
Medical director, vice president of medical affairs
Clear Choice Health Plans
Member, board of directors
American College of Physician Executives
Differing view on Sarbanes-Oxley
Your cover story suggesting that not-for-profit healthcare organizations are embracing the new Sarbanes-Oxley regulations imposed on publicly traded firms failed to provide much evidence for its thesis ("Setting a good example," Dec. 6, 2004, p. 6).
We have been surveying not-for-profit healthcare organizations in the past year to discover how their boards have been responding to Sarbanes-Oxley and other governance reform initiatives. This has led us to startlingly different conclusions.
Yes, boards are concerned about Sarbanes-Oxley. Yes, they are debating whether to voluntarily comply with the rules that make the most sense for not-for-profit organizations.
Yes, some boards have decided to adopt a number of those rules. But more boards have decided against adopting most of the law, at least for now. Instead they have decided to strengthen and clarify their current governance practices and revise their bylaws and policies to align them with actual practices.
Sarbanes-Oxley is more focused on auditing than governance. Boards that take governance reform seriously have looked at the broader set of standards proposed by the Conference Board, the National Association of Corporate Directors and the American Bar Association, among others, or the new listing requirements of the stock exchanges.
What's most surprising is that boards seem to have paid more attention to Sarbanes-Oxley-which doesn't apply legally to not-for-profits-than they have to intermediate sanction regulations, which do apply and have done so for eight years.
A surprising number of hospitals and systems have not yet adopted the simple procedure for protecting their executives and board members from intermediate sanctions (imposed by the Internal Revenue Service) by establishing a viable presumption of reasonableness for their compensation.
The results of this survey have been released to participants over the past year and the American Governance & Leadership Group has just published a comprehensive report, along with a companion volume on governance of healthcare organizations in an era of reform. Copies are available from Clark Consulting.
David Bjork, managing director
Daniel Fairley, vice president
Editor's note: To obtain a copy of the research, go to clarkconsulting.com and click on the link to the American Governance & Leadership Survey Report.
I read with interest your article on healthcare and labor unions ("Labor pains," Dec. 6, 2004, p. 26). The last chart discusses union membership as a percentage of the workforce. Is this the percentage of all U.S. workers who are unionized or is this specific to the percentage of healthcare workers unionized?
Director of pharmacy
St. Joseph's Hospital
Chippewa Falls, Wis.
Editor's note: The reference is to union membership as a percentage of the total workforce.
Not everyone is winning ...
I have no doubt that David Burda is right that the big health companies are getting bigger and that the Blues plans are getting bloated ("A Chicken Little act that's getting old," Dec. 20/27, 2004, p. 18). However, there are a great many providers in this country that struggle day in and day out to meet the needs of patients.
Rural America is alarmingly short of physicians, especially primary-care doctors. Why do you think the specialist ranks continue to grow? That's where the money is.
We are experiencing alarming increases in salary costs because of shortages of licensed personnel in many ancillary professions. We also have uncontrolled cost of drugs and medical implants, both of which far exceed our ability to recover costs from private payers, let alone Medicaid and Medicare.
Insurance premiums have risen by outrageous proportions, but that's not reflected in the reimbursements rural providers see. Most state Medicaid programs are in disarray and experience growing shortfalls from the federal government. The sky might not be falling, but it sure as hell is cracking. I don't know what world you live in, but I live in the real world.
President, chief executive officer
Jackson County Memorial Hospital
... try a different approach?
David Burda's editorial on health spending and industry complaints is sound and good points are made. Many healthcare executives also are weary of the whine sessions that are prevalent at some meetings in the industry (Dec. 20/27, 2004, p. 18).
However, a slightly friendlier approach to the folks that need to improve the industry may do more to perk their interest. We don't want a tit-for-tat situation where hospital CEOs wonder if healthcare journal editors also do well if the industry lacks direction.
What role could Modern Healthcare play in assisting willing executives to improve our healthcare system?
President, chief executive officer
Florida Hospital-Memorial Division
Ormond Beach, Fla.
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