Monday, January 4, 2010

The Governance Imperative for Nonprofit Hospitals

In this month's issue of Trustee Magazine (the American Hospital Association's magazine for hospital trustees), I wrote a Viewpoint article urging nonprofit hospital boards to step up their governance and focus on promoting and improving community health.  I offer three specific ways they can start.  You can find the article here.  I include excerpts below.  I'd love to hear any views (even opposing ones) on the article and the topic. 

"Nonprofit hospitals are in the cross­hairs. With state and federal governments in need of money, and some nonprofit organizations appearing to shirk their community responsibility, many are questioning the continued wisdom of the long-standing tax exemption afforded these institutions.

These qualms are unfortunate. The nonprofit hospital sector offers an essential and unparalleled community resource. Over 2,900 hospitals in our country—almost 60 percent of the total—are nonprofit. Eliminating the tax exemption would cripple these organizations at a time when our nation most needs them. But to whom much is given, much is expected. The public expects more. And they deserve more.

* * *

Nonprofit hospitals are the heart and soul of communities. They exist not for the benefit of shareholders, but for the benefit of stakeholders who make up the community at large. They provide critical, and often unprofitable, services. For these reasons, much is at stake in this debate, and nonprofit hospitals must better demonstrate that they are worthy of continued government subsidy. Their boards would do well to step up their accountability, improve their overall governance, and remain keenly focused on the goal of promoting and improving community health."

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