Community Considerations For Hospital Transactions

Article by Barton C. Walker & Kristian Werling , McGuireWoods, LLP, and Rex Burgdorfer & Jordan Shields, Juniper Advisory, LLC

Previously published in The Governance Institute

When evaluating change-of-control transactions, hospital boards need to be cognizant not only of their fiduciary duties to the corporation, but also of how their decisions will impact the broader community. Selling a hospital, especially to an out-of-town buyer, is a politically charged issue that frequently brings emotional responses from the community. If not handled correctly, public concerns can gain momentum and derail transactions that boards have specifically structured to meet the long-term healthcare needs of their communities. There have been repeated public relations disasters in which communities rightly or wrongly concluded that their hospital was sold out from under them without adequate disclosure or community input. To ensure a successful outcome, it's important to