In a new Governing Health vidcast, McDermott partner Michael Peregrine breaks down why you may need to revamp your conflicts of interest procedures, and how the general counsel and the compliance officer can work together to protect the health system from conflicts-related risks.

Many health systems’ conflict of interest policies and protocols haven’t been updated since the 1990s. While these approaches—based on duty of loyalty and simple concepts of financial interests—may have fit the bill in the past, today’s rapidly shifting environment poses new governance-related challenges that have direct implications for the process by which conflicts of interest are identified, disclosed and addressed. These challenges include:

  • Diversification of health system portfolios, featuring investments in a broadening scope of products, services and enterprises, particularly in the case of innovative technology and delivery of care platforms
  • Growing officer and director interest in investing alongside their health system
  • Swift consolidation of the inpatient health care provider market and increasing ambiguity in identifying competitors
  • Sharpening focus on material bias arising from personal relationships (intra-board or external)
  • Non-traditional market participants, including high-tech market disrupters and powerful new organizations formed by vertical or horizontal combination
  • State regulators’ attention and reaction to media reports regarding high-profile instances of conflicts of interest
  • The presence of constituent directors on corporate and joint venture boards
  • New case law focusing on how personal interests may affect leadership decisions


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Infographic: How Do State Attorneys General Track Nonprofit Health Care?

McDermott recently launched a special edition podcast providing an in-depth discussion of the interplay between State Attorneys General enforcement authority and nonprofit Board of Directors responsibility in the governance and operation of health systems. This special edition of the Governing Health