From Corporate Governance To Hospital Governance.: Authority, transparency and accountability of Belgian non-profit hospitals’ board and management

doi:10.1016/j.healthpol.2003.07.009

Health Policy

Volume 68, Issue 1, April 2004, Pages 1-15

https://doi.org/10.1016/j.healthpol.2003.07.009 Get rights and content

Abstract

As a result of multiple developments in health care and health care policy, hospital administrators, policy makers and researchers are increasingly challenged to reflect on the meaning of good hospital governance and how they can implement it in the hospital organisations.

The question arises whether and to what extent governance models that have been developed within the corporate world can be valuable for these reflections.

Due to the unique societal position of hospitals—which involves a large diversity of stakeholders—the claim for autonomy of various highly professional groups and the lack of clear business objectives, principles of corporate governance cannot be translated into the hospital sector without specific adjustments. However, irrespective of these contextual differences, corporate governance can provide for a comprehensive ‘frame of reference’, to which the hospital sector will have to give its own interpretation.

A multidisciplinary research unit of the university of Leuven has taken the initiative to develop a governance model for Belgian hospitals. As part of the preliminary research work a survey has been performed among 82 hospitals of the Flemish Community on their governance structure, the composition of the governance entities, the partition of competencies and the relationship between management and medical staff.

Introduction

No other branch of health care is as capital-, labour- and knowledge-intensive as the hospital sector. Hospitals take a prominent position within the health care system of most countries. At the same time, however, they constitute autonomous business entities and require a well-adjusted and efficient administrative framework.

To that end, most hospitals have their own governing board and a professional team of executive managers. Together they constitute the axis of ‘hospital governance’, which is the process of steering the overall functioning and effective performance of a hospital, by defining the hospital’s mission, setting its objectives, and supporting and monitoring their realisation at the operational level.¹

More than ever, these hospital boards and managers are challenged to reflect on what good governance means and how they can implement it into their own organisation. This is due to several major developments in health care and health care policy.

Section snippets

Governance challenges facing hospitals

The vast majority of European hospitals are non-profit institutions. They usually have their roots either in monastic orders and charitable organisations or in the public assistance services of the local community. These ‘historical owners’ still embody—at least formally—the constituent authority of most hospitals. But on administrative and operational level, recent years have been characterised by the gradual withdrawal of these traditional organising authorities. As a result of a general

Existing empirical research

The number of studies on hospital governance is very limited up till now. Most of the existing research data can be found in American management literature and often treat the subject from a very ‘corporate’ line of approach. Examples of reported topics are: the correlation between hospital strategy and board composition [5], the difference between non-profit and for-profit hospitals in terms of CEO remuneration and turnover [6] and the influence of the overall performance of the hospital on

Corporate governance: a wealth of ready-made solutions?

As hospital governance, and health care governance in general, are still emerging as a distinct research domain, reference is often made to the ample experience of the corporate world [6], [11]. ‘Corporate governance’ stands for the system by which companies are directed and controlled. It usually has a qualitative connotation and thereby has become a general designation for all kinds of rules and guidelines intended to optimise the governance structures of corporations. As such, it is based on

Hospital governance in Belgium

In November 1999, a research unit on hospital governance was set up at the Katholieke Universiteit Leuven, combining the experience with hospital management of the Centre for Health Services and Nursing Research and the expertise on corporate governance of the Department of Applied Economics.

As part of the preliminary research work a governance survey was performed among a representative sample of Flemish hospitals

Evaluation of the current governance practice

The study revealed numerous differences between private and public hospitals. Especially with regard to professional background, time spending and partition of competencies, a large diversity was found. Apparently, the traditional summa divisio between private and public enterprise still influences the internal governance of Flemish hospitals. This dichotomy is justifiable in a historical context, but has been increasingly brought into question in recent years. Due to the broad uniformisation

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From Corporate Governance To Hospital Governance.: Authority, transparency and accountability of Belgian non-profit hospitals’ board and management

Abstract

Introduction

Section snippets

Governance challenges facing hospitals

Existing empirical research

Corporate governance: a wealth of ready-made solutions?

Hospital governance in Belgium

Evaluation of the current governance practice

Review of Financial Economics

Clinical governance and governmentality

Health, Risk and Society

Corporate and philanthropic models of hospital governance: a taxonomic evaluation

Health Services Research

Board characteristics, managerial controls and corporate strategy: a study of U.S. hospitals

Journal of Management

Managerial incentives in nonprofit organizations: evidence from hospitals

Journal of Law and Economics

An empirical comparison between the board’s strategic role in nonprofit hospitals and in for-profit industrial firms

Health Services Research

Changes in the structure, composition, and activity of hospital governing boards, 1989–1997: evidence from two national surveys

The Milbank Quarterly

On a hiding to nothing? Assessing the corporate governance of hospital and health services in New Zealand 1993–1998

International Journal of Health Planning and Management