HARRIS MEYER May 29, 2019 10:00 AM UPDATED 22 MINUTES AGO
Nearly half of hospital boards lack a formal CEO
succession plan, according to an American Hospital Association's governance survey, a finding that shocked governance
experts.
Developing a CEO succession plan is considered a core function of
boards. Yet 24% of hospital system boards, 50% of free-standing hospital
boards, and 59% of subsidiary boards had no succession plan, according to the
comprehensive survey of 1,316 hospital CEOs who responded in the spring of
2018, the AHA's first such survey in five years.
"That's absolutely staggering," said
James Orlikoff, a governance consultant who served as a commentator on the
AHA's survey. "That reflects a fundamental abrogation of responsibility.
There's no excuse for that."
Experts also noted slow or no progress in recruiting minorities, women
and younger people for hospital boards. System boards were 83% Caucasian in
2018 compared with 86% in 2014, while free-standing boards were 91% Caucasian
last year versus 90% in 2014.
Men made up 72% of system board members and 70%
of free-standing board members last year, compared with 76% and 72%,
respectively, in 2014.
On age diversity, people older than 51 made up
84% of system board members and 75% of free-standing board members in 2018,
versus 88% of system board members and 83% of free-standing board members in
2014.
Boards overall had a higher percentage of
members age 71 or older in 2018 than they did in 2005—12% versus 9%—while they
had a lower percentage of members age 50 or younger—22% versus 29%.
"The data are very clear that the
demographics of boards is clearly one of the ongoing challenges hospital boards
need to address," said Debra Stock, AHA vice president of trustee
services. She said the AHA recently formed partnerships with the National Urban
League and UnidosUS to increase participation of African-Americans and Latinos
on hospital boards.
Overall, the survey showed that hospital boards
are making some progress in implementing state-of-the-art practices such as
restructuring to improve governance. But industry leaders question whether
boards are moving fast enough to keep up with rapid changes in the healthcare
system and U.S. society.
In a commentary included in the AHA report,
Nicholas Tejeda, market CEO of the Tenet Healthcare Corp.-owned Hospitals of
Providence in El Paso, Texas, said the increase since 2005 in female membership
on hospital boards from 23% to 30% isn't good enough.
"It seems we can do better to ensure our
boards better represent patients who come through our doors," he wrote.
"Considering that the majority of a hospital's workforce is female, we
must focus our efforts to identify and develop women leaders for roles in
governance."
And despite the aging of board membership, only
27% of survey respondents said their organizations are making focused efforts
to engage the millennial generation—people born between 1982 and 2000—in
governance.
"Succession planning is key to the
long-term success of any organization, and governance is certainly no
exception," Tejeda wrote. His organization formed a Young Leader Advisory
Group that already has produced new board members including a board
chair-elect.
Orlikoff said that failure to implement
generational change in governance could threaten hospital survival.
"Boards are disproportionately composed of baby boomers who are retiring,
dying or becoming mentally incompetent," he said. "That poses a
serious risk to healthcare organizations."
A more encouraging finding from the survey is
that nearly two-thirds of hospital boards have engaged in restructuring to
improve governance over the past three years. They sought new board member
skills and competencies, added or reduced committees, redefined authority among
system and subsidiary boards, and reduced or expanded membership size.
Stock said boards are carefully balancing the
need to keep experienced members with unique skills and knowledge with the need
to bring in new members who are younger and have different skill sets.
Despite the move toward restructuring, a
significant share of hospital boards retain a structure of powerful executive
committees that some experts consider perilous. The survey found that 30% of
all hospital boards, including 52% of system boards, give their executive
committee broad authority to make decisions on behalf of the full board.
Orlikoff said that giving executive committees
that kind of authority creates a board-within-a-board structure, and can lead
to disastrous decisions, as in the Allegheny Health, Education and Research Foundation bankruptcy
in the late 1990s.
"That's not good governance," he said.
"You can have insider and outsider groups, and there are many cases where
the dominant executive committee has made decisions throwing an organization
into turmoil."
He and other experts said the survey shows that
while some hospital governance trends are moving in the right direction, bad
habits persist.
"Survey findings suggest that in some
areas, boards may be changing their practices more slowly than is optimal for a
sector facing rapid, transformational change," wrote Mary Totten,
president of governance consulting firm Totten & Associates and a
commentator for the survey.
https://www.modernhealthcare.com/providers/lack-diversity-succession-planning-revealed-aha-survey?utm_source=modern-healthcare-daily-dose-wednesday&utm_medium=email&utm_campaign=20190529&utm_content=article1-readmore
No comments:
Post a Comment