Unit I Asses

Health Care Management 1

Course Learning Outcomes for Unit I

Upon completion of this unit, students should be able to:

2. Analyze the structure of governing boards and management for health care organizations. 2.1 Explain a key type of health care organization, its leadership, and how the external factors

impact it. 2.2 Assess important roles, functions, activities, and competencies of health care managers.

Course/Unit Learning Outcomes

Learning Activity

2.1 Unit Lesson Chapter 1 Unit I Assessment

2.2 Unit Lesson Chapter 2 Unit I Assessment

Required Unit Resources

Chapter 1: Health, Healthcare, and Healthcare Organizations

Chapter 2: Management

Unit Lesson

Governance in Health Care

Some health care organizations are simply more successful than others, not just for a particular quarter or a particular year, but over long periods of time. Other health care organizations seem to always be struggling, barely making ends meet. Some of those fail financially and close their doors. Losing a hospital is a devastating event for any community. So what makes the difference between a thriving and growing hospital and an empty building? This is an interesting and important question for U.S. health care. What makes some health care organizations better than others, giving then enduring success and stability?

UNIT I STUDY GUIDE Health Care Organizations and Management

Health Care Management 2

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Professional hospital staff team includes doctors and the business administrators. (Popov, n.d.)

Well, strong and responsible governance is a big part of that difference. This lesson-author has served as chief executive officer (CEO) for four different health care organizations in four different states over the past 25 years. That means working with four different boards of governors (sometimes named board of directors) over time. The differences in those boards have been striking. We have seen truly excellent and committed leadership from some boards. Unfortunately, we sometimes see boards that barely meet the quorum requirements to hold their meetings legally. Those boards do not seem to take a lot of interest in the facility. The difference is evident. You can see it when you pull up to a hospital. You can feel it when you talk to the patients, staff members, and doctors.

A key observation is this, effective governance is probably the single-most important factor for the success of a health care organization. CEOs come and go, bigger opportunities arise, they give their 30-day notice and they move on down the road. Then, the board undertakes a search for a new CEO. The stabilizing factor is the board itself. It is a big responsibility to serve on any health care board of directors. The average tenure of hospital CEO is about 5 years, so the board can anticipate a very big decision about every 5 years as to who the new CEO will be (Hackett, 2020).

Board Election/Appointment

So how does anyone wind up taking on this important responsibility to serve on a health care board? Well, that aspect has definitely changed over recent decades, so let us briefly trace the history. In years past, many health care boards were elected by the people of a city or a county. An individual would run for a position on the hospital board, just as they might run for school board position today, then the general populace would vote board members in or out. However, the trend today is definitely toward more appointed boards, fewer elected boards, and that relates to hospital ownership.

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The purpose of the Hill-Burton Act was to bring more health care facilities to every town or rural environment across the country. (Health Resources and Services Administration, 2021; Spiroview Inc., n.d.)

In 1946, Congress passed the Hill-Burton Act, which provided funding for the creation or expansion of hospitals across the nation (Health Resources and Services Administration, 2021). World War II had recently ended, and jobs were badly needed for returning troops. A total of 6,800 facilities were built or expanded as a result of the Hill-Burton legislation. Any city or county could receive funding to open a hospital, and all across the nation, communities jumped on the opportunity. It is probably fair to say, looking back, that some of these hospitals were opened in communities that were too small to support a hospital for the long term, but open they did. It was an economic boom for each community. Constructing the facility itself created economic activity, and once built, many permanent jobs were created in the process. Americans loved having their own hospitals in town instead of traveling long distance to a major city for health care. The board of directors of those original hospitals were elected because the hospital was owned by a particular government entity (Schumann, 2016).

Over time, a practice emerged in most states in which the elected officials of a city or county would appoint the hospital board. Taking the example of a county hospital, the elected county commissioners would appoint a board of directors for the hospital. The county retained ownership of the facility, but the commissioners appointed a board to run it. For a municipal hospital, the city council would appoint the hospital board, and this practice continued through the 1950s to 1980s.

Cities and counties began to realize that having a hospital in the community was a positive thing but that actually owning the facility is troublesome, a lot of work, and very expensive. Today, only 21% of U.S. hospitals are still owned by a city or county. Another 21% are for-profit organizations that purchased or received the hospital from the city or county, but the majority of hospitals today are nonprofit non- governmental organizations. We see 58% of hospitals in this model, and in such settings, the board of directors is often self-appointing. When a vacancy exists, the board itself identifies a good candidate and votes to appoint them to the board (American Hospital Association, n.d.).

Roles for Governance

So what does the board of governors actually do in an effective health care organization? Let us start with what they do and not do. The board does not involve itself with the day-to-day operations of the facility. The decisions of who to hire, fire, and receive a raise is the responsibility of management, not of governance. When the board tries to involve itself in operational decisions, some truly awful things can happen. When the board tries to manage, hospital management is undermined, and unethical things can happen. Take the example of a board member whose wife is employed as a nurse working at the hospital. Anything the board member does to impact that nurse’s position, pay, or career opportunities is a problem for management. This would be considered an unethical use of the board position.

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So what should the board do? The Health Catalyst organization provides us with a helpful framework for that.

View this interactive Health Catalyst Framework learning activity.

Conclusion

Being a health care board member is tough, but the role is so important. We need to remember that most hospital board members serve without a salary. They are volunteers, doing something that they believe to be very important. The great majority of them are in it for the right reason. New board members often have little understanding of health care, so we must educate them and help them to understand their role. Over time, they become more knowledgeable. They represent the community to us, the key stakeholders, and we need to respect their contributions. Governance is crucial in health care.

References

American Hospital Association. (2021). Fast facts on U.S. hospitals, 2021. https://www.aha.org/statistics/fast- facts-us-hospitals

Hackett, M. (2020, September 16). Hospital CEO turnover rate dipped in 2019 for the first time in five years. Healthcare Finance News. https://www.healthcarefinancenews.com/news/hospital-ceo-turnover-rate- dipped-2019-first-time-five-years

Health Resources and Services Administration. (2021, March). Hill-Burton free and reduced-cost health care. https://www.hrsa.gov/get-health-care/affordable/hill-burton/index.html

Popov, A. (n.d.). Professional hospital staff (ID 51563193) [Photograph]. Dreamstime. https://www.dreamstime.com/stock-photo-professional-hospital-staff-represented-both-medical- profession-form-doctor-business-administrators-image51563193

Schumann, J. H. (2016, October 2). A bygone era: When bipartisanship led to health care transformation. National Public Radio. https://www.npr.org/sections/health-shots/2016/10/02/495775518/a-bygone- era-when-bipartisanship-led-to-health-care-transformation

Spiroview Inc. (n.d.). Modern hospital style building (ID 59693685) [Photograph]. Dreamstime. https://www.dreamstime.com/stock-photo-modern-hospital-building-close-up-view-image59693685

Suggested Unit Resources

In order to access the following resource, click the link below.

Health care quality and outcomes vary widely around the world. Why does the United States spend more than any other nation, but we do not have better health?

Fred Friendly Seminars (Producer). (2008). Quality of healthcare (Segment 30 of 45) [Video]. In Reinventing healthcare-a Fred Friendly seminar. Films on Demand. https://libraryresources.columbiasouthern.edu/login?auth=CAS&url=https://fod.infobase.com/PortalPl aylists.aspx?wID=273866&xtid=40081&loid=82545

The transcript for this video can be found by clicking on “Transcript” in the gray bar to the right of the video in the Films on Demand database.

HCA 3301, Health Care Management 5

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Learning Activities (Nongraded)

Nongraded Learning Activities are provided to aid students in their course of study. You do not have to submit them. If you have questions, contact your instructor for further guidance and information.

Review and answer one For Discussion question from the end of Chapter 1 and one from the end of Chapter 2 in your textbook. Write a two-paragraph answer for each question and submit to your instructor.