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POSITION PAPER Board Organization and Functional Changes Introduction Over the past decade or more the hospital industry has undergone a great deal of change, most of which has been generated from external sources and which has had a profound impact on the role and responsibilities of today's hospital governing body. The advent of Medicare and Medicaid, the Darling decision, unionization, Certificate of Need regulations, PSRO's, cost containment and rate-setting are but a few of these major changes that are placing a whole new set of demands on the hospital's governing authority. Other industry trends, such as for-profit chains, contract management, shared services, and multi-unit hospital systems are also placing a new set of responsibilities and awarenesses on today's hospital board. In our own case, we have an additional set of changes which are adding to the already major responsibilities of operating an effective community-based teaching hospital. Some of the changes include: (1) A change in Board and management leadership over the past several years. (2) The coming impact of the Board membership tenure limitation policy which was established in 1973. This will result in a significant turnover of many long-standing trustees. (3) The development of two for-profit hospitals in our community whose modus operandi is that of an aggressive competitor. This trend serves to underscore the growing awareness of the not-for-profit sector in the need to engage in similar activities including the development of multi-unit systems, shared services, and an enhanced public image. (4) The growing need to develop a long-range plan for our hospital and through it to provide a certain degree of community leadership in the development of an enhanced health care services delivery system, and (5) The major diversification of the hospital's endowment portfolio which has created a new set of Board-directed investment management responsibilities. And so, our hospital finds itself in the midst of change, both internal and external which will profoundly impact the organization in the years to come. Therefore, it is not unexpected or unwelcomed that the Board of Trustees take time to address some basic issues such as: (1) Who are we and what do we do (what is our business?) (2) How should we be organized to achieve the maximum effectiveness in our decision-making process. The purpose of this position paper is to examine some of the key issues facing the Board and, hopefully, illuminate the understanding of those issues and hence their resolution.
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Transcript | POSITION PAPER Board Organization and Functional Changes Introduction Over the past decade or more the hospital industry has undergone a great deal of change, most of which has been generated from external sources and which has had a profound impact on the role and responsibilities of today's hospital governing body. The advent of Medicare and Medicaid, the Darling decision, unionization, Certificate of Need regulations, PSRO's, cost containment and rate-setting are but a few of these major changes that are placing a whole new set of demands on the hospital's governing authority. Other industry trends, such as for-profit chains, contract management, shared services, and multi-unit hospital systems are also placing a new set of responsibilities and awarenesses on today's hospital board. In our own case, we have an additional set of changes which are adding to the already major responsibilities of operating an effective community-based teaching hospital. Some of the changes include: (1) A change in Board and management leadership over the past several years. (2) The coming impact of the Board membership tenure limitation policy which was established in 1973. This will result in a significant turnover of many long-standing trustees. (3) The development of two for-profit hospitals in our community whose modus operandi is that of an aggressive competitor. This trend serves to underscore the growing awareness of the not-for-profit sector in the need to engage in similar activities including the development of multi-unit systems, shared services, and an enhanced public image. (4) The growing need to develop a long-range plan for our hospital and through it to provide a certain degree of community leadership in the development of an enhanced health care services delivery system, and (5) The major diversification of the hospital's endowment portfolio which has created a new set of Board-directed investment management responsibilities. And so, our hospital finds itself in the midst of change, both internal and external which will profoundly impact the organization in the years to come. Therefore, it is not unexpected or unwelcomed that the Board of Trustees take time to address some basic issues such as: (1) Who are we and what do we do (what is our business?) (2) How should we be organized to achieve the maximum effectiveness in our decision-making process. The purpose of this position paper is to examine some of the key issues facing the Board and, hopefully, illuminate the understanding of those issues and hence their resolution. |