Hospital Board of Director Responsibilities

The hospital board of directors’ role is to serve as the governing body of the hospital. The board is responsible for oversight of the hospital. Board responsibilities include:

• making strategic decisions for the hospital
• hiring and monitoring an effective CEO
• ensuring the hospital is providing quality care
• overseeing the hospital’s financial well-being
• staying educated in healthcare industry news and best practices
• being a representative of the hospital in the community.

The board is not involved in the day-to-day operations of the hospital. The daily operation of the hospital is management’s responsibility.

The board should develop and review the overall mission and strategy for the hospital. Establishing the hospital’s mission statement will serve as a guide for long-term goals and policies for the hospital. Part of this responsibility is making major strategic decisions on behalf of the hospital in this ever changing healthcare industry. Setting this overall tone will impact the policies, procedures, and decisions made by management.

Effective board oversight includes the CEO hiring process. The hospital should establish a detailed CEO job description and set realistic expectations in line with the hospital’s strategic goals. Once those key components are firmly established, the board is responsible for ongoing review and evaluation of the CEO to make sure that these expectations are met. The board helps determine the big picture for the hospital and assists, supports and evaluates the hospital’s CEO.

Board members should be in close communication with the CEO when hiring and reappointing providers. The goal is to ensure that the hospital reliably provides a high quality of care to patients. Part of the board’s responsibility is to oversee the medical staff credentialing process. The CEO must determine that all hires are properly licensed in the state, there is evidence of proper and completed training from an accredited school, there has been no history of disciplinary actions taken by previous employers, hires have proper and current malpractice insurance, valid board certifications can be presented, and follow other hiring processes and procedures as needed. The board should communicate with the CEO to ensure these measures have been followed and that changes are made should they be necessary.

The board oversees the financial health of the hospital. In the healthcare industry, the board must understand and ensure that the hospital is best using their resources. With changing payment models and cuts in reimbursement, for critical access hospitals it has become even more important for boards to have a thorough understanding of the financial wellbeing of the hospital and how best to make strategic decisions as needed. The board should build in policies that allow the board to reconvene regularly to ensure that financial goals are being met. These regular checks allow the board to modify any goals that are not being met or allocate funds elsewhere to ensure the hospital is finding the best ways to earn a profit.

In the healthcare industry, board education is of utmost importance. In order for the board to set a stable long-term direction for the hospital, board members need to understand all the hospital services, needs, and trends in the healthcare environment. Board members should engage in continuing education to develop a high level of understanding of the hospital and the health care field, as well as areas most essential to effectiveness and performance. In the critical access hospital industry, there are specific financial and reimbursement issues that board members should understand in order to make fast and informed decisions.

The board, while in the position of steering the hospital in the right direction, needs to also make a strong effort to help the community succeed. One avenue to help the community and hospital succeed is to create and maintain a foundation that focuses on community outreach and fundraising. This creates a relationship between the hospital and community, where neither takes from the other, but instead works together to support one another. For critical access hospitals, the relationship with the community is vital to the success of the hospital.

The board of directors can have a lasting and positive impact on not only the hospital but also the community. Hiring, educating, and retaining effective board members can help hospitals navigate the complicated and changing healthcare industry. If you have any questions, please contact us or learn more about our healthcare accounting services.

Sources:

• “Overview of Board Roles & Responsibilities” Boardroom Basics – Minnesota Hospital and Healthcare Partnership
• “The Guide to Good Governance for Hospital Boards” – The American Hospital Association’s Center for Healthcare Governance (2009)