Fiduciary duties of interlocking directors within a nonprofit health system.

In response to regulatory and financial pressures, entities participating in the healthcare industry have joined with others in order to maintain, even improve, their market positions. In the non-profit sector of the industry, partnerships, mergers, and acquisitions have included arrangements whereby some corporate partners have interlocking directors. After review of the fiduciary duties of care and loyalty owed by corporate board members, and their application to traditional performance and conflict of interest situations, the authors address two scenarios raising interlocking director issues.

A different perspective on quality.

Evaluation of physicians in the credentialing processes of hospitals has generally been viewed as focused upon whether the physicians will provide services to patients at the appropriate level of professional performance and will not engage in disruptive behavior at the institution. Three measures--exclusive contracting, medical staff planning, and exclusive credentialing--have been employed, singly or in combination, at many hospitals to restrict or to deny medical staff appointments and clinical privileges to professionally qualified and competent physicians. Because the hospitals have articulated links, when employing these restrictive measures in making credentialing decisions, to the public's interest in their being able to provide good quality services to the communities they serve, the hospitals have usually been successful in litigation brought by physicians who have been denied staff appointment or specific clinical privileges.