Do-Nothing Hospital Boards Are Dead

Helping to run a hospital or health system from a board seat has gotten complex over the years. The instability of healthcare brought upon by its unaffordability makes the job of hospital governance both difficult—and difficult to fill.

The cover story for this month's issue of HealthLeaders magazine is a bit of a departure for me. Though I regularly chat with hospital CEOs about business strategy, hospital operations, challenges and healthcare management trends that they're facing, I rarely have occasion to talk with board members—the CEOs' bosses.

It's they who have the often thankless job of approving and advising on strategy, who make difficult capital decisions, and who manage and facilitate communication and understanding between powerful interest groups—such as physicians and nurses.

Hopefully you have had chance to read the story. If not, I encourage you to, and not just because I wrote it. I encourage you to read it because helping to run a hospital or health system from a board seat has gotten much more complex, and finding people with the expertise and time to devote to board work is getting more difficult.

See Also: Building a Better Healthcare Board

Years ago, the most important function of a hospital board was deciding what to serve at the quarterly luncheon. I'm kidding, but there's a reason that was a running joke for so long. Boards didn't have to do much. Often they were political appointees. Little time was spent on oversight. Their second most important task was to rubber stamp what the administration wanted to do.

Board members are still leaders in the community, as they have always been. But now, given the instability of healthcare brought upon by its unaffordability, the job is much more difficult and much more time consuming.

For evidence of how high-stress it is, consider this: One of the board members I interviewed for the magazine story ended up only weeks later in the unenviable position of having to terminate his CEO after the full board voted to remove him.

Much of the uproar that decided Randy Kelley's fate was not something you usually see take down a CEO. The former Caromont Health CEO didn't lose his job because of a physician revolt. He didn't botch a merger. He didn't lose money hand-over-fist. He didn't have an inappropriate relationship with a subordinate. All of these mistakes have cost hospital CEOs their jobs in recent times.

(If you're like me, you had a list of names running through your head as you read that list of CEO missteps.)

No, the ousting resulted from a marketing blunder.

Incidentally, the vote to remove him went down as the article I wrote about board governance went to press. It suffices to say, neither Kelley nor Spurgeon Mackie, the board chairman I quoted, knew that something as simple as a marketing campaign would lead to the change.

Indeed, the marketing campaign seemed pretty innocuous to me, if a little cutting edge—at least for healthcare. The slogan Caromont leaders chose, "Cheat Death," debuted to less than stellar reviews among the public, and board members, apparently.

Even though, let's be honest here, that is what hospitals are in the business of doing. Not only that, the slogan was meant to emphasize the patient's role in maintaining health—which is one of the most unsolved big-picture problems affecting healthcare costs today—patient responsibility. The message to Caromont's future patients was to eat better and exercise more. What's wrong with that?

To be fair, board members who spoke about the dismissal say there were other issues as well.

Dismissing their CEO was their prerogative. But finding innovative CEOs to run small hospital systems boxed in by huge regional competitors is not easy. The board says it will conduct a national search for its next leader. Best of luck to them. That will be a tough job too.

But don't just listen to me. Listen to board members themselves. I talked to three of them at length, all at very different hospitals and health systems in three corners of the country.

One of the key themes of the story was the importance of being a "learning board." In today's environment of change, perhaps nothing is more important.