January 29, 1998 | Read Time: 2 minutes
The General Accounting Office has examined the way non-profit hospitals in six states have been sold to — or have established joint ventures with — for-profit companies in recent years. One conclusion: The public is often left in the dark about the deals.
“These conversions are not routinely subject to any disclosure requirements, which leaves little opportunity for community involvement outside of the community members who serve on the not-for-profit hospitals’ boards,” said the G.A.O., the arm of Congress responsible for auditing the finances and operations of government agencies.
Rep. Pete Stark, a California Democrat who asked the G.A.O. for the report, said the findings were troubling. “If communities aren’t given the information they need to assess the impact of converting a charitable hospital into one driven solely by the needs of Wall Street, the public interest may be sold down the river,” said Mr. Stark.
He added: “The lack of candor about deals that have long been struck is disturbing and suggests that a wider oversight role for the federal government in conversions of hospitals serving Medicare and Medicaid beneficiaries should be considered.”
The G.A.O. report said that a growing number of states are recognizing the need to get involved. “This increased state oversight may address some questions and concerns related to obtaining fair value for charitable assets, obtaining public disclosure and community input, and ensuring that the proceeds of the transaction are used for appropriate charitable purposes,” the G.A.O. said.
A free copy of the report, “Not-for-Profit Hospitals: Conversion Issues Prompt Increased State Oversight” (GAO/HEHS-98-24), may be obtained by writing to the General Accounting Office, P.O. Box 37050, Washington 20013. The report can also be found electronically on the G.A.O.’s World-Wide Web site at http://www.gao.gov.
