Report: Community hospital board governance falls short of benchmarks

A report examining not-for-profit community health system boards finds substantial variation between current governing practices and “benchmarks of good governance” on issues such as controlling executive compensation, overseeing community benefit, and board engagement.

 

A team of researchers led by a professor of health management and policy at the University of Iowa between 2007 and 2008 compiled data from a mailed survey to health system CEOs; conducted a comparative analysis of systems’ three-year operating performance based on various data sets and cost reports; performed an analysis of systems against well-established governance benchmarks based on CEO survey responses, and visited high-performing systems, where they conducted interviews with board members.

 

The report found that 40% of not-for-profit community health system boards assigned specific oversight responsibility for the system’s community benefit to a standing board committee, despite the growing debate at national, state, and local levels about the community benefit and tax-exempt status issues.

 

Only 18.2% of worst-performing systems had assigned oversight, while 41.9% of mid-performing systems and 50% of high-performing systems had assigned oversight, respectively. In addition, several low- and mid-performing hospitals had not yet assigned standing board committees with oversight responsibility for executive compensation—another issue of increased public interest, according to the researchers.

 

(Sources: Grant Thornton, http://gt.com, accessed March 8, 2009; The Advisory Board Daily Briefing, http://advisory.com, March 6, 2009)