Leadership 99. Interview by Terese Hudson.

Cost control, customer service and collaboration among health care sectors rank as top concerns with panelists in H&HN's annual Leadership Report. Efforts to improve community health are a priority, too, but are often frustrated by financial and other constraints. The 16 panelists represent managed care, physicians, and hospitals and health systems.

The five critical areas for effective governance of not-for-profit hospitals.

The pressures on hospitals continue to mount. Voluntary boards increasingly are nervous, making management's tasks all the more difficult. We believe the environment demands a new approach to the process of not-for-profit institutional governance. The volunteer board model has worked very well, but it must be adapted to the changed environment. There must be a direct link between the function of institutional governance and the priorities identified through the strategic planning process. It is our observation that truly effective boards have the following areas clearly in focus within the board and between the board and management: (1) a common working definition of "governance"; (2) a clearly defined mission with specific goals and objectives; (3) a well-planned decision-making process; (4) a board structure tailored to the priorities at hand; and (5) an information, reporting, and communication system that keeps the priorities clearly in focus. This article explores these factors and suggests ways to link the board's work directly to the strategic plan.

Refinement of boards' role required.

The governing board's role in health care is not changing, but new competitive forces necessitate a refinement of the board's approach to fulfilling its role. In a free-standing, community, not-for-profit hospital, the board functions as though it were the "owner." Although it does not truly own the facility in the legal sense, the board does have legal, fiduciary, and financial responsibilities conferred on it by the state. In a religious-sponsored facility, the board fulfills these same obligations on behalf of the sponsoring institute, subject to the institute's reserved powers. In multi-institutional systems, the hospital board's power and authority depend on the role granted it by the system. Boards in all types of facilities are currently faced with the following challenges: Fulfilling their basic responsibilities, such as legal requirements, financial duties, and obligations for the quality of care. Encouraging management and the board itself to "think strategically" in attacking new competitive market forces while protecting the organization's traditional mission and values. Assessing recommended strategies in light of consequences if constituencies think the organization is abandoning its commitments. Boards can take several steps to match their mode of operation with the challenges of the new environment. Boards must rededicate themselves to the hospital's mission. Trustees must expand their understanding of health care trends and issues and their effect on the organization. Boards must evaluate and help strengthen management's performance, rather than acting as a "watchdog" in an adversarial position. Boards must think strategically, rather than focusing solely on operational details. Boards must evaluate the methods they use for conducting business.

Governance and management: where do you draw the line?

Is there a clear-cut division between the responsibilities of governance and management? Or, will the role of both parties vary depending on the issue and the circumstances? In this article, the authors suggest replacing a "turf model" of corporate leadership with a "continuum model"--that is, viewing governance and management as related functions, and allowing the issue and circumstances at hand to help determine the most appropriate roles and responsibilities for both parties.

Staff has a role to play in board development.

The hospital CEO should bring the administrative staff into a long-term, well-planned governing board development process that gradually educates board members on the issues they will be facing.

Trustee Week: education for trustees, by trustees.

Trustee Week, an in-depth educational program designed and conducted by the University of Washington's Graduate Program in Health Administration and Planning under a grant from the W. K. Kellogg Foundation to the Western Network for Education in Health Administration, uses a graduated workshop format to allow trustees to select the level best suited to their needs.

Hospital governance comes of age.

The function of governance has come of age after a decade of steady growth. The emphasis on effective performance shows how seriously trustees and others regard their role.

New JCAH standards stress quality and flexibility.

Quality and flexibility are the twin emphases of the new standards of the Joint Commission on Accreditation of Hospitals, most of which go into effect on January 1, 1980. Of particular interest to trustees are the new standards on quality assurance, governing body, and management and administrative services, which are reviewed in this article.

Governance: trustees are closing the gap between hospitals and consumers.

Many trustees today believe that they are in the best position to cement the relationship between their hospital and its service population.