Providers issue brief: change in nonprofit entities: year end report-2003

Heightened competition in the health care industry has prompted a growing number of nonprofit hospitals to merge with or sell to for-profit firms, in the hope of alleviating their financial concerns. The conversion trend, which has many public officials concerned about the fate of the charitable assets and care to indigent population that nonprofit hospitals have traditionally provided the communities in which they are located, has, in turn, led to an overall decline in the number of hospitals still in business. To protect the public's investment and ensure continued access to care, a growing number of states are thus exploring legislation that would open the conversion process to the public; strengthen oversight authority, typically through the attorney general; and make certain that the proceeds from such transactions are used appropriately.