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Pardon me: that's our money!
Michael W Peregrine1, James R Schwartz
1McDermott, Will & Emery, LLP, Chicago, USA. mperegrine@mwe.com
Summary
Not-for-profit healthcare providers can defend against government scrutiny of business decisions by conducting thorough internal due diligence. This strategy helps safeguard operations by examining key areas like finances and governance.
Area of Science:
- Healthcare Management
- Nonprofit Law
- Corporate Governance
Background:
- Not-for-profit healthcare providers face increasing government scrutiny regarding business decisions.
- The charitable trust doctrine is a legal principle governments may attempt to apply to these providers.
- Providers need strategic defenses to maintain operational autonomy.
Purpose of the Study:
- To outline strategic options for not-for-profit healthcare providers to resist the application of the charitable trust doctrine.
- To identify key areas for internal due diligence as a defensive measure.
Main Methods:
- Review of legal strategies for nonprofit organizations.
- Analysis of due diligence components relevant to healthcare providers.
- Examination of potential government challenges based on the charitable trust doctrine.
Main Results:
- Internal due diligence is a viable strategic defense for providers.
- Key areas for due diligence include governing documents, financial arrangements, donations/solicitation, real estate, and charitable waste allegations.
- Proactive internal review strengthens a provider's position against external challenges.
Conclusions:
- Not-for-profit healthcare providers have actionable strategies to counter government attempts to impose the charitable trust doctrine.
- Comprehensive internal due diligence is crucial for protecting business decisions and operational integrity.