State experience in regulating a changing health care system

Conversions of nonprofit hospitals, health maintenance organizations (HMOs), and Blue Cross and Blue Shield plans to for-profit status have tremendous social and economic consequences for communities. Although some consensus exists on the legal principles governing hospital conversions, a coherent legal framework for processing many other conversions is often lacking. Rapid changes in the configuration of health plans and providers complicate the situation. Litigation will provide some resolution of the issues but is not an optimal way of making policy. Some state legislatures are stepping into the fray with differing solutions. Currently, the approach of a particular regulator is often the most important determinant of a given conversion.