A new, wide-ranging study of nearly 1,000 hospitals by the Governance Institute suggests that hospital boards are changing at a pace considerably slower than in other segments of healthcare.
The study represents a break from the institute's past surveys, which focused on hospitals directly involved with the activities of the La Jolla, Calif.-based organization. The new study queried more than 6,100 hospitals across the country and received 996 responses. For the last hospital-specific survey conducted in 1998, 318 hospitals were queried and 156 responded.
"We believe that governance is changing, but not at the same rate as (hospital) finances, medical practice or other facets of healthcare delivery," said Karma Bass, director of research and publications at the institute. Bass said that boards as a whole tend to be well-insulated from the dramatic changes that have reshaped healthcare in the past decade.
But that insulation has come at a price: Though boards have taken steps to pare their size and stress accountability for top-level hospital executives, the survey suggests many boards remain strikingly homogenous, are slow to adopt even simple efficiencies and skimp on educating their members.
Board sizes have been reduced in recent years-in line with the belief of governance experts that smaller boards make for more nimble decisionmaking. The median board in the study is comprised of 12 members, compared with 15 members in previous Governance Institute surveys, and 13.5 from other studies.
Yet whether an actual trend in reducing board size exists is muddied by the seemingly contradictory responses given by survey participants. While 19% of hospitals reported a reduction in board size in the past two years, another 20% said their boards had increased in size. Bass believes that may be evidence of hospitals compensating for the elimination of subsidiary boards by increasing representation on the remaining governing bodies.
Another contradiction is in the area of accountability. There is little doubt that performance measures are considered extremely important in governance: 71% of hospital boards annually evaluate their performance, 91% have written policies to avoid conflicts of interest and 85% annually evaluate the performance of the hospital's chief executive officer. However, 35% of boards said their CEOs don't have a formal employment contract-considered key to defining expectations between the board and executive suite and stabilizing the relationship between the two.
"Employment contracts may encourage CEOs to make unpopular, but necessary decisions or pursue higher-risk, higher-reward strategies by providing them greater protection from capricious action on the part of the board," the survey said. "These features are particularly attractive in an era of competitive uncertainty and change."
And while boards are quick to critique themselves and hospital CEOs, only 42% have a formalized system that allows them to quickly and easily determine how the hospitals they govern are performing or fitting in with strategic demands.
Boards themselves are allotting relatively little time to strategy: Only 25% of a typical board meeting is devoted to strategic issues. Boards spend half of a typical meeting receiving reports from hospital executives and committees. Only 46% employ a consent agenda, which is used to quickly approve routine reports and recommendations without debate.
"There's real low-hanging fruit there, and the time for boards to find some time they may have been missing in the past by using consent agendas," Bass said, adding that introducing them is a relatively simple task.
Boards are also spending relatively little time and money on self-education. Some 78% of hospitals said they had no budget line devoted to governance activities, and 88% spent less than 20 hours a year on board education.
Meanwhile, boards remain overwhelmingly white and male in an era where healthcare delivery increasingly is bound to the use of bilingual staffs and cultural competency to effectively treat non-English speakers and foreign-born patients. Only 9% of hospital trustees are nonwhite, and only 24% are female. Although 93% of hospital boards have at least one woman member, only 44% said they had one nonwhite member. And 70% of trustees were more than 50 years old.
Although Bass believes the relative lack of diversity hasn't affected healthcare delivery, she observed that "when a board is more representative ... it has a greater likelihood of being connected to the community it serves."