New Hampshire Attorney General Michael Delaney announced on Friday his objection to the planned association between Catholic Medical Center and Dartmouth-Hitchcock Health, the Associated Press reported.
Executives at both Dartmouth-Hitchcock and CMC were "surprised and disappointed" by the decision, and plan to follow through with their affiliation despite Delaney's opposition, the Associated Press reported.
Delaney said that what both organizations are calling an affiliation actually constitutes an acquisition of CMC, which is prohibited by state laws, according to a press release from the attorney general's office. The transaction would unlawfully put Dartmouth-Hitchcock in control of important tasks carried out by CMC, limiting the charitable organization's ability to perform its charitable functions autonomously and reducing the fiduciary responsibilities of CMC's board of directors. The affiliation now must be approved by a probate court in order to be recognized under New Hampshire law, according to the release.
"The proposed transaction is highly complex but at its essence, the proposal would reorganize the corporate structures of CMC and its affiliates," Delaney said during a press conference.Delaney's report raised concerns about the lack of information given by Dartmouth-Hitchcock and CMC on how the affiliation, which also calls for CMC to lease Dartmouth-Hitchcock's Manchester clinic, would influence health care costs in Manchester, the AP reported.
His report noted that Dartmouth-Hitchcock and CMC have yet to institute adequate safeguards to prevent the misuse of surplus income according to WMUR. The report also announced that the salary of CMC president Alyson Pitman-Giles will be put under review at a later date, as her $1.3 million annual compensation is significantly greater than other industry leaders in the region.
"Nonprofit leaders must be aware that they are the stewards of the charitable assets they oversee, and those assets are held in trust for charitable purposes, not individual gain," Delaney said, according to WMUR.
Dartmouth-Hitchcock and CMC were never asked by Delaney to provide an analysis of how health care costs might change, Pitman-Giles said. Her reported salary includes a retirement plan belonging to the hospital and a one-time retention bonus, according to Pitman-Giles, and she asked that Delaney further investigate the salaries of other CEOs before making a comparison, according to the AP.
Concerns were also raised by director of the attorney general's charitable trusts division Michael DeLucia about the implications of a Catholic institution giving so much control to a secular institution such as DHH, the AP reported.
However, Thomas Colacchio of Dartmouth-Hitchcock Health said that officials made certain to limit Dartmouth-Hitchcock's authority only to matters necessary for collaboration between physicians and hospitals. Equal authority over CMC was given to the Bishop of Manchester, Colacchio told the AP.
