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.