Position paper: Board organization and functional changes

              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.