Geisinger has a committee that identifies any potential conflicts of interest across its staff, including its governing board.
Each year, the committee identifies any executive or physician who has a vested interest in a healthcare company that does business with Geisinger. Employees must disclose if their stock in a vendor or the compensation they receive from a business affiliate exceeds a certain threshold.
Individuals may have to recuse themselves from any purchasing decision where they would have a potential conflict of interest, said Dr. Jaewon Ryu, Geisinger’s president and CEO.
“We have a very regimented and focused conflict-of-interest process. That is an absolute for us,” he said. “It’s one of those things like information security where it can never be airtight, but if we look at our peers, we feel really good about our process. It is something I am proud of.”
Geisinger is likely in the minority when it comes to proactive surveillance of board members’ conflicts of interest. While several high-profile cases put a spotlight on the issue, hospitals’ conflict-of-interest policies haven’t kept up with the growing liability associated with their involvement in more businesses.
From 2019 to 2021, fewer subsidiary hospitals with advisory boards adopted protocols requiring an independent review of board members’ potential conflicts of interest, according to the Governance Institute’s 2021 survey. Those hospitals received a 3 on a scale from 1 to 3 in 2019, meaning that the process was widely adopted. That fell to 2.63 in 2021.
“What was acceptable governance 10 years ago is felonious today,” said Jamie Orlikoff, president of Orlikoff & Associates, a consulting firm that specializes in healthcare governance. “Hospitals boards need to be an eight-cylinder engine firing on all eight; anything less will not only drag an organization but inhibit them from survival and success.”