Does governance matter? Board configuration and performance in not-for-profit hospitals

Catholic Ownership, Physician Leadership and Operational Strategies: Evidence from German Hospitals

Previous research has revealed that Catholic hospitals are more likely follow a strategy of horizontal diversification and maximization of the number of patients treated, whereas Protestant hospitals follow a strategy of horizontal specialization and focus on vertical differentiation. However, there is no empirical evidence pertaining to this mechanism. We conduct an empirical study in a German setting and argue that physician leadership mediates the relationship between ownership and operational strategies. The study includes the construction of a model combining data from a survey and publicly available information derived from the annual quality reports of German hospitals. Our results show that Catholic hospitals opt for leadership structures that ensure operational strategies in line with their general values, i.e., operational strategies of maximizing volume throughout the overall hospital. They prefer part-time positions for chief medical officers, as chief medical officers are identified to foster strategies of maximizing the overall number of patients treated. Hospital owners should be aware that the implementation of part-time and full-time leadership roles can help to support their strategies. Thus, our results provide insights into the relationship between leadership structures at the top of an organization, on the one hand, and strategic choices, on the other.

Examining Governing Board Functions and Health Center Performances During Health System Reform: A Cross-sectional Study in 4 Regional States of Ethiopia

BACKGROUND

Since 1995, the Ethiopian health system has been managed through decentralizing functions, resources, and authorities to local levels. As a result, health centers are led and managed by governing boards. In addition, the national health system strives to transform the performance of health centers through the implementation of reforms. Therefore, this study aims to examine the relationship between governing board functions and health center performances within a health reform context in 4 agrarian regions of Ethiopia.

METHODS

A cross-sectional survey was conducted from August 28, 2018 to September 30, 2018. Primary data were collected from governing board chairpersons or their designees using interviewer-administered structured questionnaires. The performance of each health center was rated out of 100 percentage points against the Ethiopian Health Center Reform Guideline (EHCRIG) standards. Secondary data were abstracted from a routine health information database using customized tools to capture achievements on 69 EHCRIG standards and its 174 validation criteria. Since the data violate the assumptions of the parametric test, the Spearman's rank (rho) correlation test, (a non-parametric test) was employed to see if any correlation exists among 4 parameters; namely: structure, roles and responsibilities, training and development of governing boards, and performance of health centers against EHCRIGs standards. A statistically significant relationship was claimed at P<.050.

RESULTS

All 83 health center governing boards or designees who were approached for this study, participated. The mean health center governing board function score with standard deviation was 56.0% (SD ± 14.5%). The overall performance of health centers against EHCRIGs was 70.4% (SD ± 15.0%). There was a statistically significant and strong correlation (Spearman rho correlation coefficient) between health center performance scores measured against reform standards with governing board scores of (rho=0.866, P<.001) and overall governance scores (rho=0.828, P<.001).

CONCLUSION

Based on the results of this study, we can conclude that well-functioning health center governing boards can improve the performance of health centers against clinical, and management reform standards. Therefore, continuous strengthening of the capacity of governing boards, focusing on improving implementation of their roles and responsibilities, and continuing training on business management is recommended.

Italian healthcare organizations facing new dimensions: changes in governance structure

Private and public organizations facing merger processes may consider reconfiguring the size, composition, and mechanisms used by the strategic apex. In Italian local health organizations (LHOs), the strategic apex had to face challenges arising from an increase in size and its impacts on different governance areas. The aim of this study is to highlight the role of the top management team in shaping the conditions of governance, and link these conditions to certain internal and external characteristics of the specific LHO and to the behavior and vision of the CEO. The study used qualitative techniques to examine the cases of three of the largest Italian LHOs that had undergone merger processes in recent years. The results show how changes in the organizational size impact the structure and mechanisms of the strategic apex. In particular, this study identifies three main governance strategies.

Fitting in as an outsider: a resource dependence theory approach to outside boards

Purpose

This study draws on resource dependence theory (RDT) to explain a board's governance function in the United States (US) nonprofit healthcare industry. Specifically, while various nonprofit research studies have appealed to agency theory (AT) to explain the monitoring role of an outside board, RDT offers an alternative explanation that emphasizes an outside board's resource gathering role.

Design/methodology/approach

In drawing on the nonprofit GuideStar database, a fixed effect (FE) panel estimation was conducted on a sample of 230 US Non Profit Healthcare Organizations (NPHCOs). This panel estimation examines the relationship between the composition of an outside board and an NPHCO’s revenue and public support performance.

Findings

A key finding of this study is that the composition of an outside board involving its' number, compensation and gender impacts an NPHCO’s revenue and public support.

Research limitations/implications

This study shows that the composition of an outside board impacts an NPHCO’s ability to gain access to external resources. As NPHCOs face increasing pressure to seek external forms of revenue support, this study suggests that boards should favor a larger number, compensation and female representation of outside members.

Practical implications

The composition of an outsider board can offer external sources of revenue support that lower the poor's requirements for financial assistance and thus affirm an NPHCO’s identity as a charitable organization.

Originality/value

As an NPHCO’s identity as a charitable organization is dependent on serving the medical needs of the poor, an outside board not only introduces a resource gathering function that is absent in the monitoring explanations of AT, but that this resource gathering function is important to affirming this identity.

Women at the helm: Chief executive officer gender and patient experience in the hospital industry

BACKGROUND

Health care scholars have recognized the important role leaders play in the improvement of health care delivery systems, yet few have explored the kind of leaders who make a difference or the conditions under which certain health care executives thrive. Recent work in the hospital industry suggests that the role of chief executive officer (CEO) gender may be particularly salient in the context of patient experience (Galstian, Hearld, O'Connor, & Borkowski, 2018).

PURPOSE

In this article, we bring an explicit theoretical and empirical lens to the issue of CEO gender in the context of patient experience. Our framework provides an explanation of both why (differences between men and women in their tendency for relational orientation) and under what circumstances (the degree of complexity in the executive job environment) CEO gender is most influential.

METHODOLOGY/APPROACH

We test these relationships using data on patient experience in 391 nonrural U.S. hospitals between 2007 and 2011. Our study relies on both archival (e.g., Hospital Consumer Assessment of Healthcare Providers and Systems survey) and collected (e.g., CEO characteristics) data. Fixed-effects regression models are used to estimate the relationship between CEO gender and the interpersonal care experience.

RESULTS

We find evidence that female CEOs improve the interpersonal care experience faster than male CEOs, particularly in the most complex executive job environments, that is, in the most populous urban environments, and in the largest hospital facilities.

CONCLUSION

Our results not only support the notion that executives tend to rely on personal values and preferences but also that women have an apparent propensity for transforming health care organizations in the direction of patient centeredness, particularly in the most demanding circumstances.

PRACTICE IMPLICATIONS

Hospital boards seeking to improve the patient experience should give careful attention to promoting women to the role of CEO and consider how their own policies may be constraining both the promotion of female executives and the creation of more patient-centered health care organizations.

Governance structures and practices in for-profit and not-for profit hospitals in Egypt

BACKGROUND

Governance is a system that ensures and promotes accountability and responsibility toward stakeholders. The present study aims to compare the governance structures and practices in for-profit and non-for profit hospitals in Alexandria, Egypt.

METHODS

The study is a descriptive cross sectional study in which Chief Executive officers (CEOs) in all hospitals in Alexandria Governorate were interviewed. A predesigned questionnaire was used in the interview that is composed of four section. The first section explored characteristics of study hospitals. The second section assessed the composition and the characteristics of boards. The third section assessed the functions of the board and the fourth section assessed boards' training and evaluation.

RESULTS

A centralized board existed in the Health Insurance, Ministry of Health and Population and University hospitals. As for private hospitals, board existed in only 72 hospitals (82.75 %). Almost all boards have CEO duality. Board members were as few as two members in some boards and up to twenty members in others. Some hospital boards did not have an orientation manual or program.

CONCLUSION

A proportion of study hospitals does not have a governing board. For the hospitals with governing boards, there were wide variation in governance structures and practices.

Balancing hospital governance: A systematic review of 15 years of empirical research

It is crucial that we gain a deeper understanding of the features of organizational governance and how they contribute to hospital performance. Health care governance research has traditionally had a strong focus on the size and composition (i.e., the attributes) of the governing bodies, but less attention has been given to the dynamics, processes, and roles. Furthermore, evidence regarding the interconnection between the board and the executive management is lacking. This systematic literature review is thus intended to give a detailed summary of the attributes, the dynamics, and the processes, as well as the roles of governing bodies, by synthesizing the findings of published empirical studies. The framework of Kane et al. (2009) was used to position the results, taking into account external constraints and outputs/performance. Sixty-three studies were included in the systematic review. The majority of these studies deal with attributes (n = 34) and roles (n = 27); the smallest number of studies (n = 11) focus on dynamics and processes. There is a lack of consistency in the research findings on attributes and there is too little research into the dynamics and processes of hospital governance. However, it has been shown that clinical participation on the hospital board and the focus on quality in hospital board roles can have a beneficial effect. The studies do not provide sufficient direction on what best practice for governing hospitals should be. For this reason, we here provide a useful framework for understanding the aspects of governance and their impact on performance in hospitals and compare these with general corporate governance literature. Therefrom we propose avenues for further research.

Governance structure and public health provision

PURPOSE

A key question in the provision of public health concerns how that provision is governed. The purpose of this paper is to examine the governance structure of a public health board and its perceived impact on the efficacy of clinical operations.

DESIGN/METHODOLOGY/APPROACH

Structural issues examined the level of centralisation and public participation, and whether governance should occur through elected boards or appointed managers. These issues were examined through multiple lenses. First was the intention of the structure, examining the issues identified by parliament when the new structure was created. Second, the activities of the board were examined through an analysis of board meetings. Finally, hospital clinicians were surveyed through semi-structured interviews with both quantitative and qualitative questioning.

FINDINGS

A contradiction was revealed between intention, perception and actual activities. This raises concerns over whether the public are significantly informed to elect the best-skilled appointees to governance positions.

PRACTICAL IMPLICATIONS

This research holds implications for selecting governance structures of public health providers.

ORIGINALITY/VALUE

Few studies have looked at the role of a publicly elected healthcare governance structure from the perspective of the clinicians. Hence, this study contributes to the literature on healthcare structure and its impact on clinical operations, by including a clinician's perspective. However, this paper goes beyond the survey and also considers the intention of the structure as proposed by parliament, and board activities or what the board actually does. This enables a comparison of intention with outcomes and perception of those outcomes.

Effective Governance and Hospital Boards Revisited: Reflections on 25 Years of Research

This study reviews and synthesizes empirical research literature focusing on the relationship between boards of directors and organizational effectiveness of U.S. hospitals. The study examines literature published in scholarly journals during the period of 1991-2017. Fifty-one empirical articles were identified that met the study's inclusion criteria. A framework from the corporate governance and nonprofit governance literature is used to classify the articles according to level of analysis (individual actors, governing bodies, organizations, and networks, alliances and multiorganizational initiatives) and focus of research (formal structure and behavioral dynamics-including informal structures and processes). Results are discussed, emerging trends are identified, and recommendations are made for future research.

Governing Academic Medical Center Systems: Evaluating and Choosing Among Alternative Governance Approaches

The ability of academic medical centers (AMCs) to fulfill their triple mission of patient care, medical education, and research is increasingly being threatened by rising financial pressures and resource constraints. Many AMCs are, therefore, looking to expand into academic medical systems, increasing their scale through consolidation or affiliation with other health care systems. As clinical operations grow, though, the need for effective governance becomes even more critical to ensure that the business of patient care does not compromise the rest of the triple mission. Multi-AMC systems, a model in which multiple AMCs are governed by a single body, pose a particular challenge in balancing unity with the needs of component AMCs, and therefore offer lessons for designing AMC governance approaches. This article describes the development and application of a set of criteria to evaluate governance options for one multi-AMC system-the University of California (UC) and its five AMCs. Based on a literature review and key informant interviews, the authors identified criteria for evaluating governance approaches (structures and processes), assessed current governance approaches using the criteria, identified alternative governance options, and assessed each option using the identified criteria. The assessment aided UC in streamlining governance operations to enhance their ability to respond efficiently to change and to act collectively. Although designed for UC and a multi-AMC model, the criteria may provide a systematic way for any AMC to assess the strengths and weaknesses of its governance approaches.

Corporate governance in Czech hospitals after the transformation

BACKGROUND

This contribution is a response to the current issue of corporate governance in hospitals in the Czech Republic, which draw a significant portion of funds from public health insurance. This not only has a significant impact on the economic efficiency of hospitals, but ultimately affects the whole system of healthcare provision in the Czech Republic. Therefore, the effectiveness of the corporate governance of hospitals might affect the fiscal stability of the health system and, indirectly, health policy for the whole country.

OBJECTIVES

The main objective of this paper is to evaluate the success of the transformation in connection with the performance of corporate governance in hospitals in the Czech Republic. Specifically, there was an examination of the management differences in various types of hospitals, which differed in their ownership structure and legal form.

METHODOLOGY/APPROACH

A sample of 100 hospitals was investigated in 2009, i.e., immediately after the transformation had been completed, and then three years later in 2012. With regard to the different public support of individual hospitals, the operating subsidies were removed from the economic results of the corporations in the sample. The adjusted economic results were first of all examined in relationship to the type of hospital (according to owner and legal form), and then in relation to its size, the size of the supervisory board and the education level of the senior hospital manager. A multiple median regression was used for the evaluation.

FINDINGS

One of the basic findings was the fact that the hospital's legal form had no influence on economic results. Successful management in the form of adjusted economic results is only associated with the private type of facility ownership. From the perspective of our concept of corporate governance other factors were under observation: the size of the hospital, the size of the supervisory board and the medical qualifications of the senior manager had no statistically verifiable influence on the efficiency of the hospital management, though we did record certain developments as a result of the transformation process. The economic results that were reported were significantly distorted by the operating subsidies from the founder.

PRACTICAL IMPLICATIONS

The results can be used immediately on several practical levels: on the macro level as part of the state's formulation of health policy, particularly in the optimization of the structure of healthcare providers, as well as for the completion of reforms in legal forms and hospital founders, and on the micro level as part of the effective administration and governance of hospitals through corporate governance regardless of the form of ownership.

Review of the corporate and healthcare governance literature

The governance and effectiveness of the healthcare sector is paramount due to its impact on human well-being and the size of this sector of the economy. Astute governments and healthcare boards need to know how to improve the governance of the sector. Therefore, this review draws together the theoretical and empirical literature from both the corporate and healthcare governance literature to determine the state of knowledge that can confidently guide those who either perform board roles as directors or who create governance structures. It concludes by suggesting that further theoretical work and research are necessary, and that the focus of both needs to be broader to take into account the complexity of the sector.

Review of the corporate and healthcare governance literature

The governance and effectiveness of the healthcare sector is paramount due to its impact on human well-being and the size of this sector of the economy. Astute governments and healthcare boards need to know how to improve the governance of the sector. Therefore, this review draws together the theoretical and empirical literature from both the corporate and healthcare governance literature to determine the state of knowledge that can confidently guide those who either perform board roles as directors or who create governance structures. It concludes by suggesting that further theoretical work and research are necessary, and that the focus of both needs to be broader to take into account the complexity of the sector.

Thinking about accountability

Accountability is a key component of healthcare reforms, in Canada and internationally, but there is increasing recognition that one size does not fit all. A more nuanced understanding begins with clarifying what is meant by accountability, including specifying for what, by whom, to whom and how. These papers arise from a Partnership for Health System Improvement (PHSI), funded by the Canadian Institutes of Health Research (CIHR), on approaches to accountability that examined accountability across multiple healthcare subsectors in Ontario. The partnership features collaboration among an interdisciplinary team, working with senior policy makers, to clarify what is known about best practices to achieve accountability under various circumstances. This paper presents our conceptual framework. It examines potential approaches (policy instruments) and postulates that their outcomes may vary by subsector depending upon (a) the policy goals being pursued, (b) governance/ownership structures and relationships and (c) the types of goods and services being delivered, and their production characteristics (e.g., contestability, measurability and complexity).

Hospital board oversight of quality and patient safety: a narrative review and synthesis of recent empirical research

CONTEXT

Recurring problems with patient safety have led to a growing interest in helping hospitals' governing bodies provide more effective oversight of the quality and safety of their services. National directives and initiatives emphasize the importance of action by boards, but the empirical basis for informing effective hospital board oversight has yet to receive full and careful review.

METHODS

This article presents a narrative review of empirical research to inform the debate about hospital boards' oversight of quality and patient safety. A systematic and comprehensive search identified 122 papers for detailed review. Much of the empirical work appeared in the last ten years, is from the United States, and employs cross-sectional survey methods.

FINDINGS

Recent empirical studies linking board composition and processes with patient outcomes have found clear differences between high- and low-performing hospitals, highlighting the importance of strong and committed leadership that prioritizes quality and safety and sets clear and measurable goals for improvement. Effective oversight is also associated with well-informed and skilled board members. External factors (such as regulatory regimes and the publication of performance data) might also have a role in influencing boards, but detailed empirical work on these is scant.

CONCLUSIONS

Health policy debates recognize the important role of hospital boards in overseeing patient quality and safety, and a growing body of empirical research has sought to elucidate that role. This review finds a number of areas of guidance that have some empirical support, but it also exposes the relatively inchoate nature of the field. Greater theoretical and methodological development is required if we are to secure more evidence-informed governance systems and practices that can contribute to safer care.

Towards a framework for enhancing the performance of NHS boards: a synthesis of the evidence about board governance, board effectiveness and board development

Background

There is a need to reduce the variation in organisational performance across the NHS for which boards hold ultimate responsibility. By exploring how boards can add value, we hope that this research will benefit patients and improve service efficiency and effectiveness.

Objectives

We know that there are knowledge gaps in relation to the composition and characteristics of effective boards in the NHS, their impact and the range of tools and techniques available for developing effective boards. This realist synthesis study, therefore, aims to add to existing knowledge by (1) providing a theoretical contribution to board governance and relating it to the NHS context, (2) offering fresh insights into effective board composition, structures, processes and behaviours in the NHS, (3) furthering an understanding of how NHS boards can affect organisational performance and (4) summarising and analysing the range of board assessment tools and development interventions available for the NHS.

Method

The study adopted a realist approach to an evidence synthesis of a diffuse literature. In line with realist review principles, we tested, honed and refined the research questions and emerging findings with a joint expert advisory and stakeholder group of 23 people. A search was conducted across relevant library and external sources including ABI/INFORM® (ProQuest, Ann Arbor, MI, USA), SciVerse® ScienceDirect® (Elsevier, Amsterdam, the Netherlands), MEDLINE, EMBASE and the Social Science Research Network, from 1968 to 2011. A total of 618 general articles, 209 health-care-related articles, 252 textbooks and 54 reports were identified.

Results

Frameworks that have developed from theory and from practice were categorised into the three elements of composition (board structure), focus (what the board does) and dynamics (the behavioural dimension), and the potential conjunction between board theories and practices was explored. We found some important distinguishing characteristics in the public, non-profit and health-care sectors. In relation to the impact of boards on organisational performance, the importance of contingency factors was highlighted and there is positive empirical support for the role of physicians on the board. Other than self-reports, we could not find any significant studies on the impact of board development on board effectiveness.

Limitations

The study is dependent on the diverse nature of the sources of evidence and the relative infancy of the realist synthesis method. The literature is fragmented, equivocal and, at times, contradictory. We believe, nevertheless, that the study offers insights in terms of developing middle-range theories for effective health-care boards.

Conclusions

We found no simple theory about how boards should operate. The use of certain models for boards may be more appropriate than others, depending on what the priority is in terms of organisation outcome. We have identified some important distinguishing characteristics in the public and non-profit sectors. On the whole, evidence lends some further support for a theory about the dynamics of an effective board in relation to high challenge, high trust and high engagement, modified in the light of our developing understanding about the linkages between different contexts and desired outcomes. We identified five areas in which board development approaches should be more focused. We suggest three main areas for further research: the composition of NHS boards, the conditions under which health-care boards are able to exert a sustained focus on clinical quality and an evaluation of the impact of board development activities on organisational performance.

Funding

The National Institute for Health Research Health Services and Delivery Research programme.

An exploratory study of alternative configurations of governing boards of substance abuse treatment centers

Boards of directors are the ultimate governing authorities for most organizations providing substance abuse treatment. A governing board may establish policies, monitor and improve operations, and represent a treatment organization to the public. This article explores alternative configurations of governing boards in a national sample of 500 substance abuse treatment centers. The study proceeds from the premise that boards may be configured with varying levels of engagement in five aspects of internal management and external connections in treatment center operating environments. Based on interviews with treatment center administrative directors, four clusters emerge, describing boards that are (a) active and balanced across internal and external domains, (b) active boundary spanners concentrating primarily on external relationships, (c) focused primarily on internal organizational management, and (d) relatively inactive. In post hoc analysis, we found that placement in these clusters is associated with treatment center attributes such as rate of growth and financial results, use of evidence-based practices, and provision of integrated care.

Making the CMS payment policy for healthcare-associated infections work: organizational factors that matter

Healthcare-associated infections (HAIs) are among the most common adverse events in hospitals, and the morbidity and mortality associated with them are significant. In 2008, the Centers for Medicare and Medicaid Services (CMS) implemented a new financial policy that no longer provides payment to hospitals for services related to certain infections not present on admission and deemed preventable. At present, little is known about how this policy is being implemented in hospital settings. One key goal of the policy is for it to serve as a quality improvement driver within hospitals, providing the rationale and motivation for hospitals to engage in greater infection-related surveillance and prevention activities. This article examines the role organizational factors, such as leadership and culture, play in the effectiveness of the CMS policy as a quality improvement (QI) driver within hospital settings. Between late 2009 and early 2010, interviews were conducted with 36 infection preventionists working at a national sample of 36 hospitals. We found preliminary evidence that hospital executive behavior, a proactive infection control (IC) culture, and clinical staff engagement played a favorable role in enhancing the recognition, acceptance, and significance of the CMS policy as a QI driver within hospitals. We also found several other contextual factors that may impede the degree to which the above factors facilitate links between the CMS policy and hospital QI activities.

Legitimacy, trustee incentives, and board processes: the case of public and private non-profit nursing homes

Using a unique data set, this study explores how type of ownership (government/private) is related to processes of governance. The findings suggest that the neo-institutional perspective and the self-interest rationale of the agency perspective are helpful in explaining processes of governance in both government- and privately owned non-profit organizations. Due to adverse incentives and the quest for legitimacy, supervising governance bodies within local government-owned non-profit institutions pay relatively less attention to the development of high quality supervising bodies and delegate little to management. Our findings also indicate that governance processes in private institutions are more aligned with the business model and that this alignment is likely driven by a concern to improve decision making. By contrast, our data also suggest that in local government-owned institutions re-election concerns of politicians-trustees are an important force in the governance processes of these institutions. In view of these adverse incentives - in contrast to the case of private organizations - a governance code is unlikely to entail much improvement in government-owned organizations.

Organizing for performance: what does the empirical literature reveal about the influence of organizational factors on hospital financial performance?

This chapter reviews and integrates the empirical literature on the influence of organizational factors on hospital financial performance. Five categories of organizational characteristics that research has addressed are identified and examined as part of the review: ownership, governance, integration, management strategy, and quality. With some exceptions, our review reveals a general lack of consistency and conclusiveness across studies in each area. Exceptions were found in the areas of governance (e.g., physician participation and board processes) and integration (e.g., horizontal system centralization). Despite the lack of conclusive findings across studies, our review suggests substantial opportunities for future work, including opportunities for qualitative and exploratory work. Additional implications for theory and management are discussed.

Responsibility for quality improvement and patient safety: hospital board and medical staff leadership challenges

Concern about the quality and safety of health care persists, 10 years after the 1999 Institute of Medicine report To Err is Human. Despite growing awareness of quality and safety risks, and significant efforts to improve, progress is difficult to measure. Hospital leaders, including boards and medical staffs, are accountable to improve care, yet they often address this duty independently. Shared responsibility for quality and patient safety improvement presents unique challenges and unprecedented opportunities for boards and medical staffs. To capitalize on the pressure to improve, both groups may benefit from a better understanding of their synergistic potential. Boards should be educated about the quality of care provided in their institutions and about the challenges of valid measurement and accurate reporting. Boards strengthen their quality oversight capacity by recruiting physicians for vacant board seats. Medical staff members strengthen their role as hospital leaders when they understand the unique duties of the governing board. A quality improvement strategy rooted in synergistic efforts by the board and the medical staff may offer the greatest potential for safer care. Such a mutually advantageous approach requires a clear appreciation of roles and responsibilities and respect for differences. In this article, we review these responsibilities, describe opportunities for boards and medical staffs to collaborate as leaders, and offer recommendations for how boards and medical staff members can address the challenges of shared responsibility for quality of care.

Governance in non-for-profit hospitals: effects of board members' remuneration and expertise on CEO compensation

Although hospitals vary in terms of their governance structures, little research has focused on the effectiveness of these governance mechanisms through the study of executive contracting. Using a sample of 80 non-for-profit private hospitals in the Netherlands, I investigate whether differences in governance structures of hospitals are informative for explaining the variations in chief executive pay. After controlling for important economic determinants of CEO compensation in hospitals (i.e., type and size of the hospital, CEO type and job complexity, market conditions and performance attributes), the results suggest that CEOs on average earn more (1) when the hospital's supervisory board members receive more remuneration (a higher absolute as well as an excessive remuneration) and (2) when supervisory board members have a lower level of expertise. The findings suggest that supervisory boards are more effective in controlling agency problems (i.e., aligning CEO pay to economic conditions) when their members have more expertise, but at the same time that the monitoring function is hampered when supervisory board members receive a large (excessive) remuneration.

Hospital board infrastructure and functions: the role of governance in financial performance

Increased stake of boards in the leadership of the hospitals makes them play a significant role in the financial health of their institutions. Understanding of the correct approach to successfully fulfill this purpose is critical for preparing their organizations for positioning adequately in the health care market. Governmental agencies and public companies, including insurers, will be interested in the extent to which hospital boards have adopted the provisions of accounting reform laws like those introduced by the Sarbanes-Oxley Act. It will remain for the boards to balance their oversight role for financial performance with the pressures of financial accountability.

Getting boards on board: engaging governing boards in quality and safety

BACKGROUND

As hospitals seek to drive rapid quality improvement, boards have an opportunity-and a significant responsibility--to make better quality of care the organization's top priority.

INTERVENTION

"Six things all boards should do to improve quality and reduce harm" are recommended: (1) setting aims--set a specific aim to reduce harm this year; make an explicit, public commitment to measurable quality improvement; (2) getting data and hearing stories--select and review progress toward safer care as the first agenda item at every board meeting, grounded in transparency--and putting a "human face" on harm data; (3) establishing and monitoring system-level measures--identify a small group of organizationwide "roll-up" measures of patient safety that are continually updated and are made transparent to the entire organization and its customers; (4) changing the environment, policies, and culture--commit to establish and maintain an environment that is respectful, fair, and just for all who experience the pain and loss as a result of avoidable harm and adverse outcomes: the patients, their families, and the staff at the sharp end of error; (5) learning, starting with the board--develop the board's capability and learn about how "best-in-the-world" boards work with executive and medical staff leaders to reduce harm; (6) establishing executive accountability--oversee the effective execution of a plan to achieve aims to reduce harm, including executive team accountability for clear quality improvement targets.

An empirical taxonomy of hospital governing board roles

OBJECTIVE

To develop a taxonomy of governing board roles in U.S. hospitals.

DATA SOURCES

2005 AHA Hospital Governance Survey, 2004 AHA Annual Survey of Hospitals, and Area Resource File.

STUDY DESIGN

A governing board taxonomy was developed using cluster analysis. Results were validated and reviewed by industry experts. Differences in hospital and environmental characteristics across clusters were examined.

DATA EXTRACTION METHODS

One-thousand three-hundred thirty-four hospitals with complete information on the study variables were included in the analysis.

PRINCIPAL FINDINGS

Five distinct clusters of hospital governing boards were identified. Statistical tests showed that the five clusters had high internal reliability and high internal validity. Statistically significant differences in hospital and environmental conditions were found among clusters.

CONCLUSIONS

The developed taxonomy provides policy makers, health care executives, and researchers a useful way to describe and understand hospital governing board roles. The taxonomy may also facilitate valid and systematic assessment of governance performance. Further, the taxonomy could be used as a framework for governing boards themselves to identify areas for improvement and direction for change.