A series of recent developments combine to reflect closer scrutiny of relationships and other arrangements that raise conflict of interest issues at the director and officer level. In so doing they serve as a "prompt" to review the effectiveness of existing health system conflicts disclosure and review processes.
The most significant of these developments was the August 21 feature story in The Wall Street Journal, "Nonprofit Hospitals' Business Relationships Can Present Conflicts." The article focused on business relations between the hospital, its executives and its board members, drawing from information available in the Form 990. The article focused on the frequency by which hospitals and health systems conduct business with their board members and the substantial dollar amounts allegedly involved in those arrangements.
o To this point, the article profiled three separate business transactions involving a health system and corporate "insiders" (or their family members). While the article contained the normal caveat about the mere existence of a conflict not necessarily suggestive of legal concerns, the inference in each case was that a presumption of bias existed.
This article and other new developments serve as a strong reminder for health systems to review the sufficiency of their policies with respect to the disclosure and determination of conflicts; the outside business activities of executives and board members; and the reputational and other issues associated with arrangements that create the "perception" of a conflict of interest.
Conflicts Of Interest Developments
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