The American Hospital Association's Center for Healthcare Governance released a report highlighting best practices for safety-net hospital's governance structures. The report's primary focus is on hospitals that are, or once were, governmental entities.
"It is more vital than ever for such providers to have effective governing boards and a legal structure that minimizes unnecessary bureaucracy, provides adequate operating autonomy and improves the ability to control costs, increase quality and patient safety and obtain access to capital," according to the report.
Here are four main takeaways and best practices for hospital governance from the report.
1. Rethink board size. Over the past 20 years, boards have become smaller in size, but the complex nature of healthcare today may cause some hospitals to rethink that strategy. For example, Boston Medical Center has 30 board members and 12 committees. On the other hand, Cook County Health and Hospitals System in Chicago has 11 board members. Although small, Cook County's board is extremely diverse — directors have included a former Chicago public health commissioner, retired hospital CEOs and a current county commissioner.
2. Avoid monopolistic appointment and removal processes. Generally, it is more effective if board members are removed only for cause or on approval of a super-majority vote from the board — not from a separate, appointing entity who acts alone. For example, if a mayor can remove a board member at his or her will, that affects the board's independence, as members may feel pressure to vote for issues to avoid potential removal.
Self-perpetuating boards, or those that select successors, are generally seen as more loyal to the hospital opposed to boards appointed by elected officials or political appointees. Self-perpetuating boards do involve the drawback of potentially becoming isolated or insular, which may hinder creative thinking. Even if a board is not self-perpetuating, the report suggests broad appointive powers so no single person appoints most or all of the board.
3. Strike a balance between board's management and leadership duties. This is an important distinction to make for board composition, as an overmanaged but underled board can be a recipe for disaster. As leaders, board members should have political skill to cope with conflict, reach stakeholders beyond the organization's boundaries, emphasize intangible values of vision and motivation and think in the long-term.
Michael Stocker, MD, chairman of New York City Health and Hospitals Corporation, said the balance between management and leadership is essential for boards. "In the past, we have had huge projects that the board never reviewed, while we spent too much time reviewing small things," he said in the report. The 16-member board recently implemented new strategies to allow members to focus more on long-term strategy.
4. Aim to include diverse perspectives, but do so flexibly. Although mandatory qualifications for board members can provide the governing body with expertise and diverse perspectives, this policy can also become rigid and hinder the selection process when a vacancy arises.
"In addition, it is important to avoid the balkanization and conflicting loyalties that can arise when members feel that they have been appointed to the board to represent specific outside groups or interests," according to the report. To retain independence, board members should be responsive to the hospital's mission rather than political, parochial or other organizational ties.
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"It is more vital than ever for such providers to have effective governing boards and a legal structure that minimizes unnecessary bureaucracy, provides adequate operating autonomy and improves the ability to control costs, increase quality and patient safety and obtain access to capital," according to the report.
Here are four main takeaways and best practices for hospital governance from the report.
1. Rethink board size. Over the past 20 years, boards have become smaller in size, but the complex nature of healthcare today may cause some hospitals to rethink that strategy. For example, Boston Medical Center has 30 board members and 12 committees. On the other hand, Cook County Health and Hospitals System in Chicago has 11 board members. Although small, Cook County's board is extremely diverse — directors have included a former Chicago public health commissioner, retired hospital CEOs and a current county commissioner.
2. Avoid monopolistic appointment and removal processes. Generally, it is more effective if board members are removed only for cause or on approval of a super-majority vote from the board — not from a separate, appointing entity who acts alone. For example, if a mayor can remove a board member at his or her will, that affects the board's independence, as members may feel pressure to vote for issues to avoid potential removal.
Self-perpetuating boards, or those that select successors, are generally seen as more loyal to the hospital opposed to boards appointed by elected officials or political appointees. Self-perpetuating boards do involve the drawback of potentially becoming isolated or insular, which may hinder creative thinking. Even if a board is not self-perpetuating, the report suggests broad appointive powers so no single person appoints most or all of the board.
3. Strike a balance between board's management and leadership duties. This is an important distinction to make for board composition, as an overmanaged but underled board can be a recipe for disaster. As leaders, board members should have political skill to cope with conflict, reach stakeholders beyond the organization's boundaries, emphasize intangible values of vision and motivation and think in the long-term.
Michael Stocker, MD, chairman of New York City Health and Hospitals Corporation, said the balance between management and leadership is essential for boards. "In the past, we have had huge projects that the board never reviewed, while we spent too much time reviewing small things," he said in the report. The 16-member board recently implemented new strategies to allow members to focus more on long-term strategy.
4. Aim to include diverse perspectives, but do so flexibly. Although mandatory qualifications for board members can provide the governing body with expertise and diverse perspectives, this policy can also become rigid and hinder the selection process when a vacancy arises.
"In addition, it is important to avoid the balkanization and conflicting loyalties that can arise when members feel that they have been appointed to the board to represent specific outside groups or interests," according to the report. To retain independence, board members should be responsive to the hospital's mission rather than political, parochial or other organizational ties.
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