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University of Iowa News Release

 

Feb. 15, 2008

Report highlights strengths, weaknesses in community health system governance

While governance structures and practices of nonprofit community health systems in the United States are consistent with many industry benchmarks, a new research report developed by faculty in the University of Iowa College of Public Health suggests these organizations must strive to improve performance in other key areas, including establishing, monitoring and reporting on programs designed to benefit the communities they serve.

Pressure to make such improvements is being felt at the federal, state and local levels, where the tax-exempt status of not-for-profit organizations, including those in the health care field, has come under increased scrutiny, said Lawrence Prybil, Ph.D., UI professor of health management and policy, who led the research team.

"There is a growing call for more accountability, greater transparency and better performance by the boards that govern our nation's investor-owned and nonprofit organizations," Prybil said. "This has been heightened by a number of factors, including the visible consequences of governance failures in the business sector, in higher education, in foundations and in the health field."

The researchers surveyed chief executive officers of 201 nonprofit community health systems. Of these, 131 were independent organizations, while 70 were part of larger regional or national organizations. Responses were received from 123 of the 201 systems in the study population (61 percent). The survey was supported by a grant from the accounting firm Grant Thornton LLP, which supplemented principal project funding provided by the W.K. Kellogg Foundation.

The researchers examined three aspects of health care governance -- board structure and composition, board practices and processes, and board culture -- and compared the information the CEOs provided to widely recognized good governance benchmarks.

Several areas of strength were noted, including the fact that nearly 90 percent of community health system boards surveyed demonstrated that they placed high priority on patient care quality and safety by assigning oversight of those functions to a standing board committee. In addition, 96 percent of boards receive regular reports on hospital-specific and system-wide performance that are tied to specific targets.

However, the researchers also found areas where improvements are needed. For instance, only 36 percent of health systems surveyed have formal, board-adopted community benefit plans in place. The report authors recommended that health systems should adopt formal plans that clearly state the systems' roles and obligations to provide charitable services and other such benefits to their communities. These community benefit plans should involve local needs assessments and reporting and accountability mechanisms to monitor progress.

"All community health system boards and their CEOs should devote concerted attention and resources to meeting the emerging benchmarks of good governance with respect to their systems' community benefit responsibilities," the authors noted.

Other recommendations include a call for governing boards and CEOs to examine and then implement plans to improve their board development, evaluation and performance review processes, and boardroom culture. The report authors stressed the importance of racial and gender diversity among board members and suggested that nursing leaders be recruited to add clinical perspective on board deliberations.

Overall, the authors lauded the high level of CEO participation in the research study.

"We are very grateful to all the community health systems who responded to the survey," Prybil said. "Their interest and participation in this process represents an important contribution to improving health care governance."

The report "adds to the growing body of information that boards can turn to in their ongoing assessment and guidance of hospital systems," said American Hospital Association President and CEO Rich Umbdenstock. "Boards today have growing responsibilities, and reports like this one help identify areas where progress is being made and also highlights areas for improvement."

The full report, "Governance in Nonprofit Community Health Systems: An Initial Report on CEO Perspective," is available on the College of Public Health Web site at
http://www.public-health.uiowa.edu/news/pdf/021508-release.pdf.

The survey is part of a three-phase research study funded by the W.K. Kellogg Foundation.

STORY SOURCE: University of Iowa College of Public Health Office of Communications and External Relations, 4258 Westlawn, Iowa City, Iowa 52242

MEDIA CONTACT: Debra Venzke, 319-335-9647, debra-venzke@uiowa.edu; Writer: Dan McMillan