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Decisions That the Board of Directors Makes for Hospitals

by Maureen Malone

The members of a hospital's board of directors govern the facility. Their work allows doctors, nurses and other health care professionals to focus on providing the highest level of care to patients. A hospital board of directors makes many important decisions regarding hospital policy, budgets and quality of care.

Financial Performance

Making decisions ensuring the financial health and performance of the hospital is a core responsibility for the board of directors. Hospitals must maintain sufficient operating capital to remain open and continue offering services and care. The board must decide the financial goals of the hospital and make sure that the organizational plan aligns with those goals. Boards choose methods to increase the creditworthiness of the hospital. The board of directors monitors the hospital's financial performance and verifies that financial statements are accurate. It might decide to review any inconsistencies and change or create policies to address any problem areas. Often a committee consisting of board members or other professionals appointed by the board will oversee the board's financial management responsibilities.

Guidelines, Regulations and Staffing

The board of directors reviews the mission, guidelines and other hospital regulations regularly and makes changes as needed to comply with new laws, financial goals or other improvement programs. In addition, hospital boards may remove or recommend for removal the hospital president, CEO or other officers and senior staff members. They also make recommendations or appoint new officers. Boards make decisions regarding the appointment of committee members. They create committees for projects such as strategic planning, quality of care improvement and medical liaisons.

Community Relationships

The board of directors ensures a positive relationship with the community by deciding on clear policies for quality patient care and maintaining trust through honest financial reporting and strong creditworthiness. Board members may create community outreach and improvement programs for residents to share complaints or improvement ideas, which is especially important for nonprofit institutions. The board might create committees to develop and implement programs specific to the needs of the community.

Quality of Care

Since providing medical care to individuals is the purpose of a hospital, ensuring that the care provided meets high standards is a core responsibility of the board. The Institute of Medicine defines quality health care as safe, effective, timely, efficient, patient centered and equitable. The board of directors not only creates the policies and expectations of quality care; it also oversees hospital operations to ensure that patients receive quality care. Providing quality care not only benefits the patients; it's cost-efficient for the hospital and improves the hospital's reputation with the community. To achieve quality care and comply with federal and state regulations, the board of directors must develop and implement quality improvement programs, monitor the results and make policy changes as necessary. Programs might include a procedure for reporting problems with quality or an evaluation of staffing to determine if more medical or administrative personnel are necessary.

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