The Governance of Nonprofit Hospitals

Source: Uwe E. Reinhardt, New York Times, Economix blog, April 12, 2013

Go to the Web site of any publicly traded profit-making corporation – e.g., the Hospital Corporation of America – and click on the tab “Investor Relations.”

You will find tabs for annual reports to shareholders and the mandatory filings made to the Securities and Exchange Commission. Among them are 10-K’s, annual reports that are detailed and audited. There is also great detail on the criteria by which executive performance is evaluated by the board of directors, along with dollar figures of actual compensation paid.

Is there anything like this transparency and public accountability in the nonprofit sector? Indeed, who actually owns these entities? To whom do they render account for the sizable real resources and finances under their control? And what benefits do they deliver in return for the exemption from income taxation they enjoy?…