For accountants, "the bottom line is the bottom line," says Sam J. Germana, vice president and general counsel, Trinitas Regional Medical Center, in Elizabeth, NJ.
And that's fine, says Germana
, "because you do want to have a balance - the conservative, strategic-thinking finance exec taking a hard look at the numbers, balanced with the risk-taking, strategic view of the CEO.
"GCs must provide the wide range of legal options open to management to meet strategic objectives," says Germana
"CFOs can then best determine which among the possibilities may likely provide the greatest return on investment.
Even that which seems to defy logic can be 'legal.' Conversely, sound business decisions can violate a host of laws and regulations.
adds, "By having early tie-in between the finance and legal departments, the right hand knows what the left hand is doing."
In its hospital system with two campuses, says Germana
developed a good contracting policy, "driven by our finance department.
"You have to have an open system where people are free to brainstorm, collaborate, share insights, and be critical, without being antagonistic," says Germana
suggests: "One of the most effective approaches to a well-built management team is to place the GC in the decision-making process early, to get the benefit of his
unique way of viewing challenges and solutions."
explains: It provides a level of protection against judicial interference with the workings of a corporation if the officers act in good faith, in the best interests of the corporation, on an informed basis, in ways that are not wasteful and do not involve self-interest.
"GCs' advice is part of the process of establishing that managers acted on an informed basis and in good faith," he says.
Cooperation Is Key
At Trinitas Hospital System, a key business issue is negotiating physician contracts that are not in violation of the Stark law, which bars referring a patient to a medical facility in which the physician has a financial interest.
In trying to satisfy one need, hospital administration might create an arrangement that would lose money for a period.
Sam Germana, VP and general counsel for Trinitas, says it's best to get all the parties in the room together: finance, legal, and administration.
"I'll say, 'John, the CFO
says these numbers don't work.' And the manager may respond, 'But do you realize, we have to do this strategically - or lose this line of service to a competitor down the road.'
"There are nuances such as community benefit," Germana