Trends in governance structure and activities among not-for-profit U.S. hospitals: 2009–2015

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Abstract

Background:

In U.S. hospitals, boards of directors (BODs) have numerous governance responsibilities including overseeing hospital activities and guiding strategic decisions. BODs can help hospitals adapt to changes in their markets including those stemming from a shift from fee-for-service to value-based purchasing. The recent increase in market turbulence for hospitals has brought renewed attention to the work of BODs.

Purpose:

The aim of the study was to examine trends in hospital BOD structure and activities and determine whether these changes are commensurate with approaches designed to respond to market pressures.

Methodology/Approach:

We examined hospital level data from The Governance Institute Survey (2009, 2011, 2013, and 2015) and corresponding years of the American Hospital Association Annual Survey in a pooled, cross-sectional design. We conducted individual multivariate models with adjustments for hospital and market characteristics, comparing the changes in BOD structures, demographics, and activities over time.

Findings:

The sample included 1,811 hospital-year observations, including 682 unique facilities. We found that BODs in 2015 had less internal management (β = −2.25, p < .001) and fewer employed and nonemployed physicians (β = −8.28, p < .001) involved on the BOD. Moreover, compared to 2009, racial and ethnic minorities (2013 β = 2.88, p < .001) and women (2013 β = 1.60, p = .045; 2015 β = 2.06, p = .049) on BODs increased over time. In addition, BODs were significantly less likely to spend time on the following activities in 2015, as compared to 2009: discussing strategy and setting policy (β = −5.46, p = .002); receiving reports from management, board committees, and subsidiaries (β = −29.04, p < .001); and educating board members (β = −4.21, p < .001). Finally, BODs had no changes in the type of committees reported over time.

Practice Implications:

Our results indicate that hospital BODs deploy various strategies to adapt to current market trends. Hospital decision-makers should be aware of the potential effects of board structure on organization’s position in the changing health care market.

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