Guidelines for evaluating potential joint ventures.

Abstract

Holy Cross Health System (HCHS), South Bend, IN, participates in 25 joint ventures; 9 of these involve partnerships with for-profit structures and 18 relate to activities with medical staffs. To ensure that such arrangements respect the sponsoring religious institute's requirements, HCHS follows a 16-point policy to guide the development of joint ventures. The policy requires joint ventures to: Have a specific purpose relevant to community health care needs; Strive to respond to need regardless of a person's race, creed, color, or ability to pay; Include in legal documents a statement of the intent to uphold Church teachings; Base their activities on an "arm's length" relationship; Undertake reasonable efforts to establish the entity as a not-for-profit, tax-exempt corporation; Confine operations to the subsidiary's service area unless collaboration with other Catholic-sponsored organizations is involved; Include a "dispute resolution" clause in organizational documents; Establish as the partner on adequately capitalized, wholly owned not-for-profit corporation to minimize liability exposure, if the HCHS is to be a general partner in the joint venture; Retain professional consultants approved by the corporate office; Maintain reserved powers for majority-owned or majority-controlled joint ventures that are ecclesiastical entities.