Tuesday, October 10, 2006

things that make you go hmmm

you know, I really thought the question about whether UPMC could IPO was just a theoretical question. Still is I suppose. Yet the news today is that UPMC is saying it is now the first major nonprofit to comply with the Sarbanes-Oxley Act is actually big news. Complying with Sarbanes-Oxley is at the very least both expensive and time consuming. To my knowledge there is no requirement on the horizon that would force UPMC to do this. As the article states there is some vague notion that changes are coming that could impact nonprofit accounting, but that is mostly conjecture at this point and this really is unprecedented. Whatever their motivations, this clearly would make integration into the for-profit world easier. Just makes you wonder is all.

1 Comments:

Blogger John said...

There was an article by Kris Mamula of the Business Times about a year ago when UPMC first made the announcement that they were going to do this. At the time they carefully portrayed it as the idea of Beckwith (the board chair), but I've always wondered what their reasoning is.

Partially, it came in reaction to the criticisms by Paul O'Neill when he left the board, as well as the perennial criticism about the fact that they refused to report the salaries of Romoff and others on their 990s; instead they paid a for-profit subsidiary called Managed Care Advisory Services. They have decided that that is no longer defensible and are now releasing executive salary information.

It must also have at least something to do with the Grassley hearings on the tax-exempt status of non-profit hospitals. Greater regulation of non-profits in general -- and non-profit health systems in particular -- is probably in the cards in the near future, and it is a bipartisan issue. There are plenty of Republicans who are for it, because while most of them do not like Sarbanes-Oxley, they believe that if it's required for for-profits it should be required of non-profits as well.

Tuesday, October 10, 2006 10:28:00 PM  

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