Healthcare trustees better start limbering up and applying the liniment as 1998 should be a good year for looking over their shoulders.
Governance experts say boards of hospitals and other healthcare organizations will have to withstand greater scrutiny in the new year and beyond on a variety of issues. Chief among them: compliance with federal billing requirements, particularly for Medicare.
Charles Ewell, chief executive of the Governance Institute in La Jolla, Calif., says he believes that widely publicized government fraud investigations, such as the one on hospital behemoth Columbia/HCA Healthcare Corp., mean boards will be held more to the fire for the faults of their managers.
"When you have 500 FBI agents that have been sicked on healthcare businesses in general, the whole notion of federal Medicare compliance and board risk becomes a looming issue," he says. "Boards are going to have to instruct management to assess the risks and fix them where needed."
Other areas for scrutiny are the charitable trusts set up by not-for-profit hospital conversions and the deals that led to their formation.
"There are many charitable trusts that are not necessarily fulfilling their community benefit obligations to the letter," says Sharon Omahen, a San Diego-based consultant in the not-for-profit sector.
Omahen notes that although trusts are distributing money, it's not necessarily for healthcare issues. One example is a charitable healthcare trust in Ohio that recently gave a sizable donation toward the construction of a library. "A lot of state attorneys general are going to pay closer attention to where the dollars are going," she says.
Ewell agrees and says a variety of community issues are up for scrutiny. "The problem," he says, "is that quite a few boards have made decisions behind closed doors and have then faced community furor. And now the (attorney general) is basically sitting at the boardroom table, sharing in the decisions about whether to joint venture or sell.
"As for charitable trusts, an (attorney general) is going to be much more critical as to who will serve on those boards, who is participating, what those funds are going to be used for, and whether there will be an arm's-length arrangement between the new foundation and the old hospital."
According to Ewell and other observers, boards also will have to face the issues of paying for improved information technology; gathering relevant information about the quality of healthcare their hospitals provide; crafting compensation packages to retain talented chief executives; and streamlining the multitude of boards that many healthcare systems possess.
"It's a lot easier to invite a person on a board than to disband it, but it can be a very touchy problem when you're dealing with an unpaid volunteer because it's very hard to fire one," Ewell says.