A controversial appointment to a Boston hospitals board of trustees late last month is making waves in the industry, and some say it blurs the bright line between payers and providers.
Charles Baker, president and chief executive officer of Harvard Pilgrim Health Care, was invited to join the board of 503-bed Beth Israel Deaconess Medical Center, Boston, a top academic hospital affiliated with Harvard University, several months ago. Harvard Pilgrim, a not-for-profit health plan serving New England, is Beth Israels third largest payer after the CMS and Blue Cross and Blue Shield of Massachusetts.
Paul Levy, president and CEO of Beth Israel Deaconess, said that he and Ted Ladd, chairman of the hospitals board of trustees, approached Baker about the position. Hes interested in learning more about how we bring process improvements to the hospital, Levy said of Baker. We knew there wouldnt be a conflict.
Beth Israel Deaconess has three boards. The 20-member board of directors oversees the hospitals finances, personnel and management. The board of trustees, on which Baker serves, has 85 members and acts in an advisory role to the directors while delving into specific issues. They meet quarterly, are unpaid and most serve three-year terms with an option of renewal. Their meetings are closed to the public. A third panel, the Board of Overseers, has 226 members who serve as goodwill ambassadors for the hospital.
While on the board, Baker has a seat on the Patient Care Assessment Committee, which oversees healthcare quality efforts at the hospital.
This is not so much on the financial side, Levy said. Hell be working on processes to reduce harm. Its not about reimbursements.
Some experts agreed that the appointment as described by the hospital doesnt pose a conflict. Whats important is the hospital is transparent on why this would benefit patients and the community, said Thomas Dolan, president and chief executive officer of the American College of Healthcare Executives.
But James Orlikoff, a healthcare governance consultant, said an increasingly cutthroat reimbursement environment is placing insurers and providers in a more adversarial relationship. Giving an insurer any insight into a hospitals operations is a bad idea, he said. I would be hard-pressed to defend this arrangement strategically, Orlikoff said.
Even if Baker recuses himself from any financial discussions, insurers are increasingly interested in tying hospital quality improvements to payments, which creates other conflicts, Orlikoff said. Saying an insurer is just going to be involved in quality is a fairly simplified way of putting it, he said. At best, its naive; at worst, its disingenuous.
Baker could not be reached for comment, but on his blog, Lets Talk Healthcare, he said the appointment dovetails with his position as member of the Commonwealth of Massachusetts Health Care Quality and Cost Council, which is developing a framework for collecting and distributing information on healthcare system performance.
If I learned a thing or two about healthcare delivery from the provider side of things, it might make me a better CEO at Harvard Pilgrim, he wrote. But it would also improve my performance as a member of the council. I dont think its a conflictgiven the separation from the main operations from the hospital. That said, I could see why some people might think any connection at all is a conflict.
Having a representative from an insurer on a hospital board is unusual. In 2005, the chairman and chief executive officer of Wellmark Blue Cross and Blue Shield, John Forsyth, resigned from his position as president of the Iowa Board of Regents, which oversees the universitys hospitals and clinics, after less than a year. His appointment drew fire from the start and was later nixed by the state attorney general.
Another case of an insurer representative serving on a hospital board can be found at Beth Israel Deaconess. Helen Chin Schlichte, appointed to the hospitals board of directors in November 2004, is a consultant to corporate relations at Blue Cross and Blue Shield of Massachusetts. A spokesman for the hospital said she works primarily in outreach to community groups for the states largest insurer and does not serve on the hospital boards finance committee.