CHA to study whether membership should include for-profits

May 15, 2011

Membership to vote on temporary bylaw change to permit for-profit members during study period

Recent changes in ownership at a number of Catholic hospitals have resulted in some of these institutions becoming for-profit companies while maintaining their Catholic identity. Under current CHA bylaws, for-profit organizations cannot be representative members in the association. Over the next year, CHA's board of trustees will be revisiting this restriction in light of the changing health care landscape in the U.S.

A bylaw revision to be voted on at the 2011 Membership Assembly would allow the affected hospitals to remain in the association during a yearlong study of CHA's membership categories and criteria.

"The ever-changing nature of health care delivery in which our ministry thrives continually forces us to look at how we deliver care, how we're structured, and how we live out our ministry," said M. Colleen Scanlon, senior vice president of advocacy for Englewood, Colo.-based Catholic Health Initiatives. Scanlon, who is the immediate past chair of CHA's board, chairs the board's governance committee, which has been charged with guiding discernment on the membership issues.

"We've seen some institutions and health systems begin to explore new models of how they structure their institutions," Scanlon said. "These changes raise a question for the ministry and for CHA about how these entities are part of the ministry community going forward. So the CHA board began a thoughtful discernment last fall and charged the governance committee to think more deeply about the question and continue to engage the board in dialogue."

Scanlon said the board's discernment has focused on the few Catholic health care organizations that have converted to for-profit status or are about to do so through recent or pending sales. "We wanted to be responsive to those of our historic members who would no longer be part of our membership without a bylaws change," she said.

Brighton, Mass.-based Caritas Christi Health Care, now named Steward Health Care System, became a for-profit company after being purchased by the private investment firm Cerberus Capital Management in late 2010. The system's six hospitals continue to be recognized as Catholic facilities by Boston's Cardinal Sean O'Malley. Similar arrangements are under discussion in several other areas.

The governance committee of CHA's board recommended a temporary modification to the association's bylaws that would allow Steward Health Care and other member organizations that will be or may become for-profit in the 12 months after the assembly to remain in CHA's membership for one year. That is the proposal that will be put to a membership vote next month.

During the ensuing year, the association will conduct an in-depth study of the membership issue; and, if permanent changes to the bylaws are determined necessary by the board, those proposed changes will be brought to the Membership Assembly in 2012.

"Over the years, CHA's membership categories and criteria have been periodically reviewed and revised in response to changes in the environment," said Lisa Gilden, CHA vice president and general counsel. "For example, in 1998, recognizing the formation and growth of Catholic health systems, the bylaws were amended such that systems, rather than individual hospitals within a system, would be the primary members of CHA."

Scanlon said both the governance committee and board recognize the need for careful study of what she described as a complex, multilayered issue. "There are still unanswered questions in the work before us. We are trying to be flexible and responsive yet hold tight to the values and principles that undergird Catholic health ministry.

"There is an interest on the part of the association to help all Catholic health care organizations, including those newly changed or changing to for-profits, to live out their Catholic identity and carry out the healing mission," Scanlon said.


Proposed change to CHA bylaws

CHA members will be asked to vote on the following amendment to the association's bylaws during the Membership Assembly held next month in conjunction with the 2011 Catholic Health Assembly, June 5-7, in Atlanta.

The proposed bylaws change appears below. The proposed language change is in italics.

"Article IV, Section 3A. Representative Membership: Any Catholic health system, sponsor, or freestanding Catholic entity shall be eligible for Representative Membership if it (1) is located in the United States, (2) promotes or fosters the values of the Catholic health ministry, (3) embraces and supports the mission and purposes of the Association, and (4) is a not-for-profit entity;provided, however, that for FY2012, the requirements of Article IV, Sections 3A(4) and B(4) shall be temporarily waived only for any for-profit entity that was, or is a successor to an entity that was, a Representative Member or System Participant Member of the Association in FY2011."


Webinar on proposed bylaw change

An informational webinar on the proposed bylaws change is set for 11 a.m. ET, May 24, and is open to anyone associated with a CHA-member organization. See www.chausa.org for registration details. For more information on the proposed bylaws change, contact Lisa Gilden.

 

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