Health Care Alliances and Conversions

In the past two decades countless nonprofit community hospitals and health care facilities have combined with for-profit institutions, joined large nonprofit systems, or converted to joint ventures with for-profit chains. As we enter the next millennium, this trend is accelerating.

The guide for decision makers, a how--to--do--it manual for every nonprofit hospital director in America. Our country's health care will be much improved if directors buy and read this book. ?Phillip L.

Acknowledgments; The Authors; Foreword; Introduction; Introduction; Fiduciary Obligations; Duty of Obedience to Charitable Purpose; Step 1: Find Out to Whether You Can Convert Your Hospital at All; Step 2: Determine How You Can Spend the Charity's Money; Duty of Loyalty; Duty of Due Care; Conclusion; Strategic Planning; Get the Board Involved Early; Identify the Legally Permissible Options; Determine Restrictions; Avoid Common Errors; Assemble the Right Team of Experts to Work with Your Management, Identify the Problems, and Recommend Solutions; Shape Your Options to meet Your Goals and Work with Your Community; Meeting Your Goals; Engaging the Community; Give Yourself Enough Time to Make a Reasoned Decision; Conclusion; Planning for the Post-Conversion Charity; Goal 1: Educate the Affected Community and Involve It in the Decision-making Process; Goal 2: Create a Structure for the Post-Conversion Charity That Is Consistent with Your State Law; Goal 3: Create a Charitable-Spending Plan for Your Post-Conversion Foundation; The Historical-Services Option; The Charitable-Component Option; The Supporting-Organization Option; Establish an Investment and Management Structure for the Conversion Proceeds; Step 1:Setting Your Investment Goals; Step 2: Selecting an Investment Adviser; Step 3: Establishing Written Investment Guidelines That Include Diversification; Step 4: Monitoring Investment Performance; Step 5: Negotiating Terms to Protect the Charity from Loss or Excessive Fees; Conclusion; Selling Your Hospital; The Sale Process; Getting the Right Advice at the Right Price: Marketing and Valuation Experts, Negotiating Expert Fees; Avoiding Conflicts of Interest; Obtaining a Formal Valuation: Necessity, Timing, Source and Cost; Understanding Valuation Advice: Fairness Opinions and Valuation Opinions, Valuation Methodologies; Marketing Your Hospital: Soliciting Interest by Buyers, Getting the Bidding Started, Auction Sales: Optimizing the Possibility of Obtaining Fair Market Value, Single-Bidder Sales: "Shopping the Deal" and Protecting the Price, Choosing the "Best" Offer; Documenting the Agreement: Letter of Intent, Definitive Agreement; Conclusion; Joint Ventures; Keys to a Successful Joint-Venture Agreement; The Typical Joint-Venture Model: Advantages, Risks; Policy Analysis; Investment Analysis: What Percentage of Your Assets Will You Invest? Will Your Returns Equal the Value of the Assets You Invested? Could You Do Better Elsewhere?; Process: Understanding the Issues, Get Fair Market Value, Make Sure the Deal Documents Protect You; Protecting Yourself and Your Hospital: Understand the Limitations of Your Expert(s), Let the Market Work for You, Pursue Your Values, Not Someone Else's, Evaluate Comparable Proposals, Be Wary About Using Selection Criteria Other Than Price; Structuring the Transaction: Letter of Intent, Contribution and Sale Agreement, Operating Agreement, The "Put," Conclusion ; Legal Protections for Directors and Trustees--and the Consequences for Failing to Use Them; Legal Protections: Business Judgement and Careful Conduct Rules, Delegation, Reliance, and Other Safe Harbors, Directors' and Officers' Liability Insurance, Indemnification; Legal Consequences: Charitable-Trust Civil Actions, Internal Revenue Service; Conclusion; Appendix A: Glossary; Appendix B: The Law of Fiduciary Duties Affecting Directors and Trustees of Nonprofit Hospitals; Duty of Obedience to Charitable Purpose: Defining the Trust, Adapting the Trust to Changing Times and Circumstances, Restrictions on the Use of Conversion Proceeds; Duty of Loyalty: General Standards, Trust-Law Standard, Corporate-Law Standard, California standard, real-Life Examples; Duty of Due Care: Standards in Practice: Good Faith, reasonable Inquiry, Due Diligence, Process Protections; Index.