1. Governance & Organizational Structure Paula Autry President, Mount Carmel East Mount Carmel Health System

2. Governance  10 Questions for 5% of Exam  4 Knowledge Areas Knowledge of governance theory (e.g., mission and values, relationships with board of directors, roles of governing board and management) Knowledge of governance structure (e.g., bylaws, articles of incorporation, fiduciary responsibilities) Knowledge of medical staff structure and its relationship to governing body and facility operation (e.g., credentialing, privileging and disciplinary process) Knowledge of public policy matters and legislative and advocacy processes

3. Governance Defined as a shared process of top-level organizational leadership, policy making, and decision making. Governance is not a “board only” activity, but rather an interdependent partnership of leaders.

4. Governance Know the difference between:  Not-for-profit  Community-owned  For-profit/investor-owned  Governmental  Owned by a larger entity University Multihospital system

5. Governance Regardless of the type of ownership and control, the following is a list of essential board functions: Appoint the chief executive Establish the mission, vision & long-range plan Approve the annual budget Appoint members of the medical staff Monitor performance against plans and budgets

6. Governance Committees of the Board Standing Committees:  Executive  Professional Staff  Human Resources  Quality assurance/improvement  Finance  Planning  Public Relations & Development  Investment  Capital Equipment & Expenditure  Nomination  Ethics

7. Governance Role of Executive Committee  Receives reports from other committees  Monitors policy implementation  Provide interim decision making  Has continual monitoring responsibility and authority over the organization

8. Governance Relationship to the CEO Governing Board’s responsibilities are to: Recruit the CEO Select the CEO Evaluate the CEO

9. Governance Role of the CEO to the Board The CEO is to: Assemble & organize resources Develops the systems to carry out programs and policies approved by the Board

10. Governance CEO Performance Assessed regularly by the Board Measured against predetermined objective standards that are mutually identified and accepted by the CEO and Board. Employment contracts are increasingly common – these set the terms of employment, including severance.

11. Governance The Triad CEO Governing Board Professional Staff (medical staff) Key to effective governance How well the Board Chairman, CEO and Medical Staff President communicate and jointly approach the challenges of the healthcare organization.

12. Governance Board Chairperson Typically serve a definite term (2 years) Re-election/tenure Compensation (less than 10% are compensated) Primary Duties: - Ensuring the hospital provides high-quality healthcare - Evaluating the CEO’s performance - Developing the hospital’s strategic plan

13. Governance CEO Approx. half have employment contracts Average term is two-year Average severance is 12 months Some have voting privileges

14. Governance Ready for some test questions?

15. Boards make better strategic decisions if they use information that is: Readily available on a special board website. Generated from computer studies of departmental activity reports. Summarized in graphs for better understanding. Focused on measurable outcomes of service quality and economic vitality. Governance Test Questions

16. The central role of the health services organization board includes all of the following: Setting the strategic plan and service values of the organization. Support for assessing changing market needs. Support in managing important service programs or departments. Assuring the recruitment, hire, support and reward of the CEO.

17. The first role of the governing body is to: Manage inputs of the healthcare organization to achieve the output that are its goals. Recruit members who understand the health services field. Set objectives and develop policy to guide the organization in achieving its mission. Develop the operating plan and monitor departmental performance.

18. Internal members of the healthcare organization’s governing body: Serve on an ad hoc basis and are rarely voting members. Are kept to a minimum due to concerns regarding confidentiality. Often include the CEO, medical director and CFO. Often include the executive staff in planning and information management.

19. Law and tradition have established basic criteria for healthcare governing boards. One criteria is that: All members agree to received care at the governed organization. Board members provide a specified amount of financial support. The actions of the board are reasonable and prudent. The board must meet a minimum of two times each year.

20. Which organizational theory is illustrated by governing activities with explicit and specific procedures, arranging offices in a hierarchal fashion, and selecting candidates on the basis of their technical competency? Bureaucratic Contingency Institutional Technological

21. Which of the following activities should be performed by the Board of Directors? Calculating patient care fees. Determining staffing patterns. Recruiting new medical staff. Hiring the CEO.

22. Governing Boards are typically more effective at what size? 10 to 15 members. 15 to 25 members. 5 to 10 members. More than 25 members.

23. The role of a not-for-profit healthcare organization’s governing board includes all of the following except: Delineate clinical privileges. Ensuring that quality healthcare is delivered. Overseeing the day to day operations. Setting broad institutional policy.

24. The main role of the board is: Selecting the CEO. Overseeing operations. Setting institutional policy. Running the institution in the absence of the CEO.

25. Who gives final approval of the medical staff bylaws? The board. The medical staff. The board executive committee. The medical staff executive committee.

26. Which of the following is a key responsibility of a governing board? Recruit and select the CEO. Operationalize the organization’s strategic plan. Assist the CEO with evaluation of the rest of the management team. Develop a physician recruitment plan.

27. Governance Need more in-depth resources? Board Works: Governing Health Care Organizations, by Dennis D. Pointer and James E. Orlikoff Practical Governance, by J. Larry Tyler, FACHE, FAAHC, and Errol L. Biggs, Ph.D., FACHE The Trustee Handbook for Health Care Governance, by James E. Orlikoff and Mary K. Totten