HEALTH FACILITY MANAGEMENT DISPUTES

The boards of hospitals and other health facilities may hire management companies to manage the operations of the facility. The management company promises to provide staff and systems to help the board accomplish the mission of the organization while protecting its financial stability. When things do not go as hoped a board may decide to fire one management firm and hire another or to employ a chief executive officer and directly manage the hospital. If things go extremely badly, the board may decide to sue the management company to recover payments and additional damages for what it sees as negligence or breach of duty by the management company.

RPC has provided expert services in disputes between hospital boards and hospital management companies. These cases required an RPC team of economists, accountants, and health care administrators. It is usually necessary to review several years of hospital plans, budgets, financial reports and board minutes to understand how key decisions were made and the respective roles of the board and the management company. It is also important for RPC to review conditions in the local economy and in the larger healthcare environment to see how much better or worse a given hospital performed relative to comparable hospitals. Out of this analysis we develop opinions about the reasonableness of actions by the management company and the board given external conditions and resource constraints.

Another important aspect of these cases is quantification of economic damages. In most cases this requires backcasts and projections to compare what actually happened with the outcome had other decisions been made and other actions taken by the parties. RPC can help legal counsel and the client to make reasonable estimates of what, if any, economic damages were due to the actions of the parties. WE have the quantitative skills, modeling software and health care experience to perform this complex analysis.

For sample RPC reports and professional references please contact Ron Luke at (512) 371-8000