Governance & Organizational
Structure
Paula Autry
President and COO
Mount Carmel East Hospital
Governance
 10 Questions for 5% of Exam
 4 Knowledge Areas
• Knowledge of governance theory (e.g., mission and values,
relationships with board of directors, roles of governing board and
management)
• Knowledge of governance structure (e.g., bylaws, articles of
incorporation, fiduciary responsibilities)
• Knowledge of medical staff structure and its relationship to
governing body and facility operation (e.g., credentialing,
privileging and disciplinary process)
• Knowledge of public policy matters and legislative and advocacy
processes
Governance
• Defined as a shared process of top-level
organizational leadership, policy making, and
decision making.
• Governance is not a “board only” activity, but
rather an interdependent partnership of leaders.
Governance
• Know the difference between:
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Not-for-profit
Community-owned
For-profit/investor-owned
Governmental
Owned by a larger entity
• University
• Multihospital system
Governance
Regardless of the type of ownership and control, the
following is a list of essential board functions:
• Appoint the chief executive
• Establish the mission, vision & long-range plan
• Approve the annual budget
• Appoint members of the medical staff
• Monitor performance against plans and budgets
Governance
Committees of the Board
• Standing Committees:
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Executive
Professional Staff
Human Resources
Quality assurance/improvement
Finance
Planning
Public Relations & Development
Investment
Capital Equipment & Expenditure
Nomination
Ethics
Governance
Role of Executive Committee
 Receives reports from other committees
 Monitors policy implementation
 Provide interim decision making
 Has continual monitoring responsibility and
authority over the organization
Governance
Relationship to the CEO
Governing Board’s responsibilities are to:
• Recruit the CEO
• Select the CEO
• Evaluate the CEO
Governance
Role of the CEO to the Board
The CEO is to:
• Assemble & organize resources
• Develops the systems to carry out programs
and policies approved by the Board
Governance
CEO Performance
• Assessed regularly by the Board
• Measured against predetermined objective
standards that are mutually identified and
accepted by the CEO and Board.
• Employment contracts are increasingly
common – these set the terms of employment,
including severance.
Governance
The Triad
CEO
Governing Board
Professional Staff (medical staff)
Key to effective governance
How well the Board Chairman, CEO and Medical Staff
President communicate and jointly approach the
challenges of the healthcare organization.
Governance
Board Chairperson
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Typically serve a definite term (2 years)
Re-election/tenure
Compensation (less than 10% are compensated)
Primary Duties:
- Ensuring the hospital provides high-quality
healthcare
- Evaluating the CEO’s performance
- Developing the hospital’s strategic plan
Governance
CEO
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Approx. half have employment contracts
Average term is two-year
Average severance is 12 months
Some have voting privileges
Governance
Ready for some test questions?
Governance Test
Questions
Boards make better strategic decisions if they use
information that is:
• Readily available on a special board website.
• Generated from computer studies of departmental
activity reports.
• Summarized in graphs for better understanding.
• Focused on measurable outcomes of service quality
and economic vitality.
Governance Test
Questions
Boards make better strategic decisions if they use
information that is:
• Readily available on a special board website.
• Generated from computer studies of departmental
activity reports.
• Summarized in graphs for better understanding.
• Focused on measurable outcomes of service quality
and economic vitality.
Governance Test
Questions
The central role of the health services organization
board includes all of the following:
• Setting the strategic plan and service values of the
organization.
• Support for assessing changing market needs.
• Support in managing important service programs or
departments.
• Assuring the recruitment, hire, support and reward
of the CEO.
Governance Test
Questions
The central role of the health services organization
board includes all of the following:
• Setting the strategic plan and service values of the
organization.
• Support for assessing changing market needs.
• Support in managing important service programs or
departments.
• Assuring the recruitment, hire, support and reward
of the CEO.
Governance Test
Questions
The first role of the governing body is to:
• Manage inputs of the healthcare organization to
achieve the output that are its goals.
• Recruit members who understand the health
services field.
• Set objectives and develop policy to guide the
organization in achieving its mission.
• Develop the operating plan and monitor
departmental performance.
Governance Test
Questions
The first role of the governing body is to:
• Manage inputs of the healthcare organization to
achieve the output that are its goals.
• Recruit members who understand the health
services field.
• Set objectives and develop policy to guide the
organization in achieving its mission.
• Develop the operating plan and monitor
departmental performance.
Governance Test
Questions
Internal members of the healthcare organization’s
governing body:
• Serve on an ad hoc basis and are rarely voting
members.
• Are kept to a minimum due to concerns regarding
confidentiality.
• Often include the CEO, medical director and CFO.
• Often include the executive staff in planning and
information management.
Governance Test
Questions
Internal members of the healthcare organization’s
governing body:
• Serve on an ad hoc basis and are rarely voting
members.
• Are kept to a minimum due to concerns regarding
confidentiality.
• Often include the CEO, medical director and CFO.
• Often include the executive staff in planning and
information management.
Governance Test
Questions
Law and tradition have established basic criteria
for healthcare governing boards. One criteria
is that:
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All members agree to received care at the governed
organization.
Board members provide a specified amount of financial
support.
The actions of the board are reasonable and prudent.
The board must meet a minimum of two times each year.
Governance Test
Questions
Law and tradition have established basic criteria
for healthcare governing boards. One criteria
is that:
•
•
•
•
All members agree to received care at the governed
organization.
Board members provide a specified amount of financial
support.
The actions of the board are reasonable and prudent.
The board must meet a minimum of two times each year.
Governance Test
Questions
Which organizational theory is illustrated by governing
activities with explicit and specific procedures,
arranging offices in a hierarchal fashion, and
selecting candidates on the basis of their technical
competency?
• Bureaucratic
• Contingency
• Institutional
• Technological
Governance Test
Questions
Which organizational theory is illustrated by governing
activities with explicit and specific procedures,
arranging offices in a hierarchal fashion, and
selecting candidates on the basis of their technical
competency?
• Bureaucratic
• Contingency
• Institutional
• Technological
Governance Test
Questions
Which of the following activities should be
performed by the Board of Directors?
• Calculating patient care fees.
• Determining staffing patterns.
• Recruiting new medical staff.
• Hiring the CEO.
Governance Test
Questions
Which of the following activities should be
performed by the Board of Directors?
• Calculating patient care fees.
• Determining staffing patterns.
• Recruiting new medical staff.
• Hiring the CEO.
Governance Test
Questions
Governing Boards are typically more effective at
what size?
• 10 to 15 members.
• 15 to 25 members.
• 5 to 10 members.
• More than 25 members.
Governance Test
Questions
Governing Boards are typically more effective at
what size?
• 10 to 15 members.
• 15 to 25 members.
• 5 to 10 members.
• More than 25 members.
Governance Test
Questions
The role of a not-for-profit healthcare
organization’s governing board includes all
of the following except:
• Delineate clinical privileges.
• Ensuring that quality healthcare is delivered.
• Overseeing the day to day operations.
• Setting broad institutional policy.
Governance Test
Questions
The role of a not-for-profit healthcare
organization’s governing board includes all
of the following except:
• Delineate clinical privileges.
• Ensuring that quality healthcare is delivered.
• Overseeing the day to day operations.
• Setting broad institutional policy.
Governance Test
Questions
The main role of the board is:
• Selecting the CEO.
• Overseeing operations.
• Setting institutional policy.
• Running the institution in the absence of the
CEO.
Governance Test
Questions
The main role of the board is:
• Selecting the CEO.
• Overseeing operations.
• Setting institutional policy.
• Running the institution in the absence of the
CEO.
Governance Test
Questions
Who gives final approval of the medical staff
bylaws?
• The board.
• The medical staff.
• The board executive committee.
• The medical staff executive committee.
Governance Test
Questions
Who gives final approval of the medical staff
bylaws?
• The board.
• The medical staff.
• The board executive committee.
• The medical staff executive committee.
Governance Test
Questions
Which of the following is a key responsibility of
a governing board?
• Recruit and select the CEO.
• Operationalize the organization’s strategic
plan.
• Assist the CEO with evaluation of the rest of
the management team.
• Develop a physician recruitment plan.
Governance Test
Questions
Which of the following is a key responsibility of
a governing board?
• Recruit and select the CEO.
• Operationalize the organization’s strategic
plan.
• Assist the CEO with evaluation of the rest of
the management team.
• Develop a physician recruitment plan.
Governance
Need more in-depth resources?
• Board Works: Governing Health Care
Organizations, by Dennis D. Pointer and James E.
Orlikoff
• Practical Governance, by J. Larry Tyler, FACHE,
FAAHC, and Errol L. Biggs, Ph.D., FACHE
• The Trustee Handbook for Health Care Governance,
by James E. Orlikoff and Mary K. Totten