Trustees from mostly rural hospitals who attended a recent unique joint meeting of the Arizona, Colorado, Nevada, New Mexico and Utah hospital associations examined the issue of keeping their institutions afloat without alienating often close-knit communities.
Speakers at the conference in Santa Fe, N.M., urged them to adopt the pragmatism of for-profit operators. Yet the ethics of such an approach sparked a secondary debate.
"Companies like Columbia/
HCA (Healthcare Corp.) don't have any sentimental attachments to brick buildings or names, while a lot of not-for-profits do," said James Orlikoff, a Chicago-based governance consultant. "It's almost as if some trustees act as if they have an equity position rather than a mission. That plays into the hands of anyone willing to work quickly.
"Your passion should be allocated properly: not to the building, the brick and mortar, and not to the employees, but to the mission of the organization," he added.
That mission, in most cases, is not only to keep the hospital functioning but to integrate finance with healthcare delivery.
"You need to control as much of the premium dollar as possible, and to adopt the language of the for-profit, but not necessarily the ethics," Orlikoff said.
That view was disputed by Alan B. Miller, chairman and chief executive officer of Universal Health Services, a King of Prussia, Pa.-based hospital management company that owns properties in many rural areas.
"I took exception to being characterized as having a certain ethic because we're for-profit," Miller said. "That's not our goal. It's to serve the community."
Orlikoff moderated his rhetoric in response. Both concurred about trustees having distinct goals and objectives for their institutions.
"Just having a direction, as opposed to none at all, is good," Orlikoff said.
Miller said many Universal employees keep a company mission statement on a laminated card carried in their wallets.
How boards can retool themselves to become more pragmatic was also a subject of debate.
Miller recommended smaller boards to ensure flexibility. Orlikoff urged trustees not to sit on more than one board in a hospital system so as to avoid conflicts.
Reginald M. Ballantyne III, chairman of the American Hospital Association and CEO and president of PMH Health Resources in Phoenix, recommended that trustees embrace diversity. He noted that PMH boards contain newspaper publishers, elected officials, attorneys, real estate developers and homemakers, among others. He also seeks ethnic diversity in trustees.
"Trustees come in a lot of flavors. . . . Many perspectives are needed to be able to function well," he said.
Some hospital officials taking a pragmatic course of action say they are in agony over doing so.
While Anne Rieger, CEO of Elko (Nev.) General Hospital, is seeking a buyer for the 50-bed facility because capital is not available to rebuild, she is also fretting about her job and those of her employees. Laying off about a third of Elko General's staff two years ago was about the worst experience of her life.
"I know we're going to take a look at the (request for proposals) we receive and be depressed," said Rieger, who also spoke at the conference.
Lee Lawson, chairman of 110-bed Longmont (Colo.) United Hospital, concurred with Rieger about the difficulties of doing a proper job in a rural community.
"If you do something the community doesn't like at a rural hospital, you're going to get a phone call at home," he said. "At a city hospital, the prestigious members of the board are not likely to be bothered as much."
John Knipping, vice chairman of East Valley Regional Health System in Chandler, Ariz., engaged in role reversal. He suggested the community at large should also be held accountable for the times its fails to support local hospitals, like when it votes down bond measures.
"We have to educate people. We need to let them all know that we can't be everything to everyone," he said.