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Elected Boards No Way to Run a Hospital

Cheryl Clark, for HealthLeaders Media, March 31, 2011

The outrageous and disruptive antics of the 397-bed Tri-City Healthcare District's elected board in Oceanside, CA are nationally known. They tell a cautionary tale about why it's a bad idea to let voters choose who governs a hospital.

Tri-City has "become kind of notorious or infamous around the country with those of us who practice in the field of governance for not-for-profit organizations," said Ed Kazemek, founder and chairman of Accord Limited of Chicago, a healthcare governance consulting firm.

Take, for example, these excerpts from last Friday's San Diego County Grand Jury report on Tri-City, entitled "Dysfunction Run Amok."

"Board meetings are conducted in an unprofessional and disruptive manner. A board member routinely manipulates the proceedings and intimidates other members," the report notes.

"This member has been censured by the Board six times since mid-2010. Meetings feature heated arguments and occasional name-calling. A board member routinely questions items on the agenda, focuses on the minutiae of administrative operations and monopolizes meeting time with time-consuming, unproductive, or irrelevant discussions."

The report goes on to describe the district's serious financial problems "due to poor investment returns, unorthodox financial reporting by the Medical Center's previous management team (who were removed by the board in December 2008) and the alleged failure of an outside auditor to follow generally accepted accounting procedures." Those resulted in a $10.5 million loss in June 2010 atop an $18.5 million loss in fiscal 2009.

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2 comments on "Elected Boards No Way to Run a Hospital"


Kevin T Kavanagh, MD (4/6/2011 at 12:26 PM)
The primary fiduciary responsibilty of a non-profit hospital board is NOT to the facility but to charitable purponses and the public. According to Lois Lerner, Director of the IRS Exempt Organization Division, for hospitals: "To qualify for tax-exemption, they must show that they provide benefit to a class of people, broad enough to benefit the community, and they must be operated to serve a public rather than a private interest." Source: Statement by Lois Lerner, Director of the IRS Exempt Organizations Division, on the IRS Report on Nonprofit Hospitals, at a Press Briefing, Feb. 12, 2009 http://www.irs.gov/pub/irs-tege/lernerstatement_hospitalproject_021209.pdf

Linda O (3/31/2011 at 4:15 PM)
Unless the courts step in, there will be no process for self-governance and self-correction. It's a shame to place the patients and employees at risk.