St. Joseph Health will soon institute a regional board to oversee key moves like capital planning, joint ventures and hiring and firing of chief executives for four Northern California hospitals that currently make such decisions in-house.
St. Joseph Health creating regional board for Northern California hospitals
The four hospitals—Santa Rosa (Calif.) Memorial Hospital, Queen of the Valley Medical Center in Napa, St. Joseph Hospital in Eureka and Redwood Memorial Hospital in Fortuna—each will continue to operate community boards, but they will not have control over most matters. St. Joseph Health teamed up with Providence Health & Services to form the 50-hospital Providence St. Joseph Health in 2016.
"We're actually behind the curve catching up," said Vanessa deGier, a spokeswoman for St. Joseph Health. "We really have operated as four separate hospitals in Northern California, which doesn't make a lot of sense in the healthcare industry today."
St. Joseph Health executives have discussed the change since around 2015, deGier said. They studied roughly a dozen other health systems with similar governance structures before deciding on the regional model, she said.
The new board is slated to go into effect April 1. DeGier said St. Joseph Health must notify several regulatory bodies, including the CMS, but it does not need regulatory approval to make the change.
Hospital-level boards will retain certain responsibilities, such as medical staff credentialing and fundraising, deGier said. Some members of the forthcoming regional board will come from the community boards, she said.
Renton, Wash.-based Providence St. Joseph Health operates hospitals in seven states: Alaska, California, Montana, New Mexico, Oregon, Texas and Washington. It uses similar regional governance models across its health system, although spokeswoman Nisha Morris declined to say whether all of its hospitals use regional boards.
"This new structure further facilitates the continuum of care in an integrated delivery network, provides greater clarity at each level of our governance, and enhances board efficiency and effectiveness," Morris wrote in an email.
David Wildebrandt, a managing director with Berkeley Research Group, said while most health systems rely on regional boards like the one St. Joseph Health is creating, he would like to see the practice become even more of a standard. That's because it helps the integration process after two health systems combine.
"From a fiduciary standpoint, we really feel that's a critical piece—collapsing the governance to a single entity with multiple feeders for input," he said.
That said, it can be tough for local board members to relinquish control over certain decisions affecting the hospital, he said. That's why it's still important that the hospital-level boards retain some level of control over governance, as well as a robust agenda and bylaws, so that local community members can still shape the organization, Wildebrandt said.
"But when you look at disbursement of capital and other types of resources, it's not just one entity," he said. "You have to look at the greater good of the organization and what's going on in each market. It's trying to get the best of both worlds so you can be more responsible."
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