Questions Health Advocates Should Ask Merging Catholic/Non-religious Hospitals
The MergerWatch Project has worked on more than 90 cases of proposed Catholic/nonsectarian hospital or health systems partnerships in 34 states over the last decade. Our goal is to ensure that community residents continue to have access to a full range of women‟s health services and end-of-life care options, since these services and choices often are curtailed at Catholic-sponsored facilities.
We provide technical assistance and support to local organizations as they work directly with hospital boards and executives to devise methods of protecting patients‟ rights and access to care. Our services are funded by foundations and donations, and therefore we provide assistance to communities at no charge. This memo was made possible by support from the Robert Sterling Clark Foundation.
There are a number of important considerations that consumer health advocates should take into account when trying to devise or evaluate/influence proposals to maintain access to services when Catholic and non-religious hospitals proposed to enter into business partnerships. We have prepared this document to help identify these considerations. It poses a series of questions that advocates should be asking and discusses the important points that health advocates must ensure are confirmed in writing.
Need for and form of hospital/health system partnership
- Is this business partnership absolutely necessary? Or, are there other alternatives that could improve the finances and future stability of the nonsectarian hospital? What would happen if a partnership is not pursued?
- If some form of partnership with another hospital or health system is necessary, have all the other potential partners been explored and fully considered? Why were other potential partners ruled out? Sometimes, perfectly viable alternative partners have been discounted for reasons that are not disclosed or publicly addressed.
- If the partnership with a Catholic hospital or system is the only available option, what forms of partnership have been considered? Generally, looser forms of partnership, such as a joint venture, will allow greater latitude for the nonsectarian hospital to maintain its identity, mission and menu of services than will complete partnerships, such as full-asset mergers.
- What will be the governance structure of the partner entities? Will they have a joint parent board? If so, how many board members will there be and who will appoint them? If it is to be 50/50 representation, how will a tie be broken? If neither entity will get to have 50 percent of the board members, how will the at-large board members be selected? Will Catholic priests or nuns be permitted as board members, potentially making it difficult for Catholic lay board members to speak up for services or options disapproved by Catholic teaching?
- What powers will members of the parent board have? Will they have the power to hire and fire the hospital(s)‟ CEO? Will they approve or disapprove the hospital(s)‟ budget? How about the potential addition of new services, or expansion of the hospital(s) into new territories or through construction of new facilities? Will the parent board be
considered an “active” or “passive” board from a legal standpoint? Will one of the partners maintain what are called “reserved powers” allowing it to veto certain decisions of the parent board? If so, what kinds of powers, and over what aspects of the partnership?
- Will the individual hospital(s) maintain their own boards of directors? If so, what powers will they have? What powers will they not have? Who will appoint the hospital(s)‟ board of directors? Can their appointments or decisions be overruled or vetoed by either the parent board or the Catholic sponsoring partner?
- Who will be responsible for interpreting application of the Catholic Ethical and Religious Directives? Will it be an outside consultant from the diocese? A Catholic theologian who joins the staff of the hospital? The hospital‟s ethics committee? Someone from the Catholic hospital or health system?
What services are currently offered at the nonsectarian hospital or in buildings on its campus, such as ambulatory surgery centers and physician’s offices, or at outpatient facilities located elsewhere in the region? Is there a comprehensive list that has been compiled? If so, review it to make sure nothing has been left out. If not, make such a list yourself to use in conversations with hospital officials. Make sure all potentially problematic services are listed separately, such as contraceptive counseling, provision of contraceptive scripts or contraceptives themselves, post-partum tubal ligations, non-post-partum or “interval” tubal ligations, vasectomies, elective abortions, emergency terminations of pregnancy to save the woman‟s life or health, or in cases of fetal anomalies, etc. (The reasons for doing this will be explained below.)
- Which services will become prohibited in hospital or campus space that will be governed by the joint parent entity? Again, this list needs to be extremely specific. In the final Memorandum of Agreement between the two hospitals or health systems, you want this list to be as short as possible and as specific as possible. So, it could include “elective abortions,” but not mention emergency terminations of pregnancy to save the woman‟s life or health, thus meaning the latter would not be prohibited. Similarly, it could list vasectomies and non-post-partum tubal ligations, meaning that post-partum tubal ligations could continue.
- If new medical treatments become available, and they are disapproved by the U.S. Conference of Catholic Bishops (such as potential treatments to be derived from embryonic stem cell research), how will it be decided if those treatments can be introduced? There should be specific language in the MOA describing how this situation would be handled and, hopefully, it would not leave the decision-making solely up to the Catholic partner.
- Will physicians, medical students or residents practicing in the historically nonsectarian facility be required to sign statements promising to adhere to the Ethical and Religious Directives for Catholic Healthcare Services? Ideally, the answer will be no. If there will be two hospitals (one Catholic and one nonsectarian), or a Catholic- governed facility with a “carve out” area that is nonsectarian (see below for further discussion of this topic), then the medical staff by-laws should, at minimum, guarantee that physicians not be required to follow the Catholic directives in the carve-out space. Make sure to discuss physicians‟ ability to participate in drug trials, because there have been instances in which that ability has been curtailed due to Catholic disagreement with pharmaceutical company requirements that female patients be confirmed to be using contraception, so as to avoid potential consequences to a developing fetus.
- Will physicians be restricted in what they can do outside of the hospital, such as in their own offices or in other medical facilities where they may practice? Make sure physicians have the freedom to provide any medical information or services they choose in their own offices, and to practice at other facilities, such as a Planned Parenthood clinic, without restriction. We know of an instance in which a physician who had sold his practice to a hospital that became Catholic was fired from his own practice for prescribing contraceptives, because records of the prescriptions were discovered during routine auditing.
3. Will physicians practicing in the jointly-governed or Catholic- controlled hospital be prohibited from providing information, counseling about or referrals for services that are prohibited by the Catholic Directives? If elective abortions, for example, become prohibited in the hospital, physicians still must be permitted to discuss this option with patients and provide referrals elsewhere.
Use of a “carve-out” space to provide services prohibited by Catholic teaching
4. If a “carve-out” space is to be utilized to provide continued access to certain services that are prohibited by Catholic teaching, how will this space be governed? Will it be separately incorporated and have a separate funding stream and separate staff? Who will operate this space? Will there be a separate board? How will this board be appointed? Will there be community representatives on the board? How about experts in women‟s health?
5. What menu of services will be offered in this space? It is important to ensure that a wide range of services, including but not limited to reproductive health, are offered in the space. The reasons are: a) to ensure security by making it more difficult to identify any women who may be entering the space to obtain prohibited services; and b) it will make the space more financially viable. No entity can survive financially by offering only vasectomies and tubal ligations.
6. How can future financial viability and stability of the carve-out space be ensured? In addition to offering a broad array of services, as noted above, the carve-out space can be made more financially viable in three important ways: a) ensuring adequate start-up funding, such as through a grant from the nonsectarian facility1 or public funding; b) through mechanisms that permit use of the space by the jointly-governed hospital on a leased basis for other services, thus providing revenue to the carved-out entity; and c) through mechanisms that permit sharing of staff, such as by having staff of the carved-out entity „rented‟ to the main facility when needed. (We can provide access to a health care financing expert who can review proposed financing of a carve-out to determine its feasibility.)
All of these avenues need to be carefully thought through and negotiated with the Catholic partner ahead of time, to ensure that they do not violate partnership agreements. Typically, it is most helpful for the nonsectarian
Typically, funding for a carve-out facility cannot come from the Catholic partner, because it would be seen as cooperating with the provision of immoral services hospital to engage an attorney with experience in canon law to guide these discussions. (We can recommend such a lawyer.)
Ensuring an exit strategy
7. What if the partnership is formed, the “carve-out” space is created and then the arrangement simply is not working? What happens next? It is essential that an exit strategy be carefully thought through and spelled out in the MOA. This exit strategy should prohibit the Catholic partner from being able to buy out the nonsectarian facility. It also should ensure that assets of the nonsectarian facility are protected. And, it should spell out what will happen to the assets of the nonsectarian “carve-out” entity.