Corporate and Partnership Structures Used in Healthcare Entity Formation

Abstract

Healthcare, with all due deference to charity care, is a business. Sister Irene Kraus, a nun, is credited with first applying the phrase, “No Margin, No Mission” to healthcare. Sister Kraus was a nun within the order of the Daughters of Charity, founded in 1633, with the mission to care for the sick, aged, infirm, and poor. Sister Kraus entered the order while a teenager during WWII, earned her MBA while caring for the sick and injured, and assumed the direction for six Catholic hospitals prior to becoming the first president of the Daughters of Charity National Health System, a healthcare system comprising more than 80 US hospitals and health-related facilities (comprising more than 12,270 beds) then managed by the order. Sister Kraus believed that in order to fulfill their mission, modern healthcare organizations, including the academic and not-for-profit systems needed strong fiscal management, not simply charity. Sister Kraus was the first woman to chair the American Hospital Association and was later inducted into the Healthcare Hall of Fame [1]. The future of healthcare will depend on its ability to sustain a margin in an increasingly competitive and also constrained economy. The most successful global corporations are characterized by visionary strategic and strong financial stewardship; the challenge to healthcare has recently been the urgent need to reduce costs and increase revenue, while providing an essential commodity. Thus, the business of healthcare, although dependent on revenue, must also stay grounded in the ethics of its mission. The challenge for corporate healthcare is a significant one; however, emerging technologies and innovative strategies will continue to create opportunities for greater efficiencies, improved access, higher quality patient care, and decreased costs. Healthcare law intersects with the fields contract law, business law, tax law, human resources law, litigation, administrative and regulatory law, criminal law, employment law, and ethics. The law of corporations is essential to understanding and managing the business transactions of healthcare professionals and healthcare entities.