ABSTRACT
Consolidation patterns in the commercial banking industry offer lessons for health care leaders.
Subject(s)
Health Facility Merger , Decision Making, Organizational , Efficiency, Organizational/economics , Health Facility Merger/economics , Insurance, Health, Reimbursement/legislation & jurisprudence , Organizational Innovation , Patient Protection and Affordable Care Act , Technology Transfer , United StatesABSTRACT
Directors of healthcare organizations normally owe fiduciary duties to their shareholders or, in the case of nonprofits, to the charitable mission of the organization. As an organization descends to bankruptcy, however, the board's duties may shift. At some point, the board may be imposed with different and often conflicting obligations to the corporate enterprise as a whole, with a primary criterion being the interests of creditors. In this article, the authors analyze the murky areas of the Zone and give guidance as to when the board's duty may shift-and as to how directors should proceed both in determining their duties and in working to fulfill them.
