Week 7: Discussion 1 – Transparency

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Week 7: Discussion 1 – Transparency

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Review IRS form 990
http://www.irs.gov/pub/irs-pdf/f990.pdf (Links to an external site.)Links to an external site.

Pick three line items listed on the form itself and/or the attached schedules that are relative to board of directors issues. Explain how disclosure of each chosen item enhances transparency.

Initial posts should be three to four full, substantive paragraphs in length.

Please submit your initial post by Tuesday at 11:59 pm and all follow-up posts by Sunday at 11:59 pm. The discussions grading rubric is used for this assignment.

Week 7: Discussion 2 – Ethics

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Read the following hypothetical.


Athens is a small rural town in your state. It has a small one hundred bed hospital. The area is developing and the hospital wants to expand its surgical wing. The Chief Executive Officer has been on the job for five years. His previous position was vice president of a large urban hospital. He has not adjusted well to the small hospital community. The Chief Financial Officer has had her job for ten years. Over the previous fifteen years, she worked her way up through the ranks after starting as a book-keeper. She is extremely loyal to the institution and was actually born there, as were most of her relatives. The Board of Directors is composed of local business people and political officials.

The hospital property is completely developed, but the 100-acre farm next door is for sale. The farm is owned by the CFO’s cousin, John Farmer.

A proposed plan for the surgical wing addition was drawn up by an architectural firm, locating the building and parking lot on ten acres of the farm. Mr. Farmer is asking one million dollars for the farm. Mr. Farmer is refusing to subdivide and will only sell the farm as a whole.

There are several layers of governmental approvals that must be obtained, including approval from the state agency overseeing hospital financial integrity, local and state zoning and planning permits, quality of care review from the state health department.

During the planning process, the CEO and CFO are having lunch in the main conference room. They are joined by the hospital’s Chief of Surgery, Dr. Cutter and two Board members: Simon LaGree, a prominent local landlord and George Grey, the state senator representing Athens. The expansion comes up as a lunch-time-conversation topic. The CEO is worried about getting approval for such a large expense considering the hospital’s small overall budget. In addition, the expansion must begin to pay for itself immediately. Mr. LaGree expresses concern about permits and purchasing the land, while the CFO and Dr. Cutter insist the expansion is crucial to healthcare in the community. Senator Grey assures everyone the approval process will go smoothly with his advocacy. A joke is made about telling different agencies different information based on what they want to hear.

The cost estimate for the building comes in at twelve and a half million dollars. The CEO submits that estimate to the permit planning agency, but the permit application does not mention the price of the land. The agency regulating hospital finances gets an application stating the estimate is ten million dollars. The health department gets the same estimate as the financial oversight agency. All three applications are signed by the CEO and CFO. The Board approves the applications without reading them, on the word of the two officers.  The officers convince the Board that Mr Farmer’s price is fair. The Board agrees to pay it, but also agrees that the unused 90 acres must be sold after the project is completed.

Senator Grey, always disclosing his position as a Board member, zealously advocates for approval of all applications. Meanwhile, Dr Cutter gets all Athens doctors to informally agree to send surgical patients to the Athens hospital exclusively. Mr LaGree is busy planning construction of a housing project on the unused ninety acres.

All approvals are granted. The project is halfway built. While reviewing the plans and approvals, the architect discovers the discrepancies in the cost estimates and calls the involved agencies for clarification. Something hits the fan.


Review the material of the last few weeks on the business and licensing issues in healthcare. Identify and fully discuss at least three legal issues that arise under the facts. Clearly identify the statutes and/or legal doctrines and/or ethical principles involved. If necessary to your paper, assume the subject hospital is in your own state.

Initial posts should be three to four full, substantive paragraphs in length.

Please submit your initial post by Thursday at 11:59 pm and all follow-up posts by Sunday at 11:59 pm. The discussions grading rubric is used for this assignment.