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[White Paper] The High Cost of Governance Dysfunction in Community Hospitals

Jeffrey Sommer, MPP, Director, Stroudwater Associates
C. Ryan Sprinkle, JD, Senior Consultant, Stroudwater Associates

According to Tolstoy, “Happy families are all alike; every unhappy family is unhappy in its own way.” However, if we compare the various entities that govern a community hospital to a dysfunctional family, our experience shows that unhappy families also share many similarities. In communities across the country, local newspapers cover disputes between county governments, hospital districts that may own the hospital’s assets and operations, and the 501(c)(3) hospital boards that lease these properties. These stories read like a soap opera script with tales of malfeasance (founded or not), broken promises, and misbehavior abounding.

Once the relationship between a hospital board (lessee) and the county or district board (lessor) gets to the point of dysfunction, great damage has been inflicted on the hospital. In an adversarial atmosphere, physicians and staff are difficult to recruit and retain. Board and management time is consumed with responding to the latest charge and counter charge. Stated simply, attention and resources shift from sustaining the mission and advancing the vision of the health care system to addressing squabbles and disagreements.

 

 

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