Is a For-Profit Structure a Viable Alternative for Catholic Health Care Ministry?

March 20, 2012 by · Leave a Comment
Filed under: Uncategorized 

symposium-header21On March 26-27, Seton Hall Law will be home to a two day Symposium entitled “Is a For-Profit Structure a Viable Alternative for Catholic Health Care Ministry?” Funded through the generosity of a number of contributors, the Symposium is being hosted by Seton Hall Law’s Center for Religiously Affiliated Nonprofit Corporations and its Center for Health & Pharmaceutical Law & Policy, in collaboration with the University of St. Thomas, John A. Ryan Institute for Catholic Social Thought, the Terrence J. Murphy Institute for Catholic Thought, Law and Public Policy and the Veritas Institute.

In an April 2010 article, a reporter for The Boston Globe pondered whether “… for-profit Catholic health care is an oxymoron, or whether profitability and religious mission can be integrated.” This Symposium will examine whether a for-profit structure is a viable alternative for Catholic health care ministry.

The Program will provide a unique forum for dialogue among practitioners, academics and scholars in law, finance, theology and Catholic social teaching to “drill down” to specific legal, financial and operational issues relevant to an objective examination of the relationship of the for-profit legal and financial structure to the Catholic tradition of health care ministry. The Symposium will consist of a sequence of presentations intended to provide an objective overview of the relevant issues with opportunity for audience interaction. The first day, presenters will provide foundational descriptions of changes in law and finance that may occur when converting from a nonprofit legal structure to a for-profit structure. The second day, theologians, canonists and scholars in applied Catholic Social Thought will respond to the legal and financial descriptive presentations. The panelists will frame the conversation, in part, by referencing examples of for-profit models in Catholic health care.

In asking the Symposium’s question, “Is a For-Profit Structure a Viable Alternative for Catholic Health Care Ministry?” the proceedings are designed to engage scholars and practitioners from multiple disciplines to develop an objective framework for analyzing the following questions:

  1. Is the delivery of health care as a ministry compatible with providing that care through an investor-owned company publicly identified as Catholic?
  2. If not, why not?
  3. If yes, are there any management, governance or other structures or processes that may need to be developed to accommodate Catholic health care as a ministry?

The Symposium will not take a position on whether such conversions, in any of its forms, should or should not occur. The Symposium will provide the audience participants with the range of issues that may impact their specific decision.

An Examination of the Key Issues

The legal and financial differences between a non-profit and for-profit corporation will be analyzed from the perspective of Roman Catholic canon law, ethics and Catholic social teaching. The Symposium, focusing on these disciplines, will address questions such as the following:

  1. What is the relationship between the theological understanding of health care as a ministry and the legal definition of health care as a public good or a private commodity?
  2. Is Catholic identity in the legal purpose clause of a corporation subject to treatment as a trade or a service mark?
  3. Is Catholic identity an intangible asset subject to valuation?
  4. If the charter of the corporation is a contract between the investor and the corporation, what is the shareholder purchasing in terms of Catholic identity?
  5. If a corporate culture is rooted in values, is it necessary to use religious language to describe values rooted in the Catholic tradition to create a culture consistent with Catholic ministry? Or is it sufficient to describe Catholic identity in terms of objectively discernable proscriptions and prescriptions?
  6. If professional managers tend to be beyond effective shareholder control  and shareholders cannot instruct the board of directors, each of whom cannot be removed without cause, by whom and how is Catholic identity determined or monitored?
  7. What is the relationship between corporate law and Catholic Social Thought on private property, labor and capital, subsidiary, the distribution of goods and services, and human rights to social goods such as health care?
  8. In states adopting corporate constituency statutes instructing directors that they either may, or must, take into account the interests of constituencies other than shareholders in exercising their powers, does Catholic identity create new, discreet constituents other than shareholders or those identified in statutes?
  9. Are new benchmarks necessary to determine Catholic corporate success? If so, do these new benchmarks differ or align with benchmarks for success for any corporation having no religious affiliation?

The New York Times Hasn’t Scratched the Surface: For-Profit Catholic Healthcare

February 24, 2012 by · Leave a Comment
Filed under: Health Reform 

kathleen m. boozangPresident Obama has begun the process for healthcare reform by improving access through insurance reform, but achievement of his aspirations will require reform of our healthcare delivery system as well.  Changing where and how healthcare is delivered and paid for is of particular importance given the emerging and generally non-acute needs of the aging baby-boomers, and the lack of sufficient primary care to serve the many who will become insured as health insurance reforms are implemented.  Healthcare providers realize this, and the market is indeed adjusting as we speak.

Three examples of these changes to the delivery system include, first, moving much of the delivery of services out of hospitals and into the community.  Healthcare systems are rapidly affiliating with or employing physicians to facilitate this change, in the hopes of enabling the various parts of the health care system to work more collaboratively, efficiently and cost-effectively.  In many parts of the country, hospitals have been too cash-strapped to invest in necessary updating to their hospital facilities. Now that we are thinking differently about how to use the physical plant that hospitals occupy, and investing in new technology, these investments need to happen.  As a third example, President Obama is infusing money into hospitals and physician offices to enable the United States to catch up to other developed nations in the digitizing of its medical records.  The benefits of this change are numerous, but it is a very expensive transformation.

In order to provide quality service and compete in the fast-changing healthcare market, hospitals and the systems of which they are a part, need money to pay for these changes.  A February 21, 2012 New York Times article on the expansion of Catholic hospitals provides a glimpse of this phenomenon of market reform.  Cash-poor hospitals unable to access capital to invest in the new initiatives necessary to keep them competitive are looking for financially stronger partners with this investment ability.  There are currently 56 Catholic healthcare systems in the country, ranging from the financially successful to the distressed.  Thus it is unsurprising that a potential partner for some hospitals might be found among Catholic systems. Read more