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What does a hospital trustee do?

By Samuel H. Steinberg, Ph.D.

Many physicians I speak with ask about the Board of Trustees at their hospital. Who are these people, what role do they play in the hospital, and how should we physicians interact with them? These excellent questions, and many others, demonstrate the need for doctors to have more information regarding the people charged with overall responsibility for their institution.

First, let’s provide some background information about trustees. Where for-profit companies (and this includes hospitals that are for-profit) have Boards of Directors to oversee them, non-profit hospitals are required to have a Board of Trustees to provide governance and leadership to all of the activities of the hospital. These responsibilities include such things as oversight of the financial health and stability of the organization, selecting the senior administrative leaders for the organization, including members of the Board, and most importantly, providing for the needed professional and administrative personnel, equipment and facilities required for the delivery of safe and high quality care to the patients served by the hospital. Trustees are responsible for performing these activities within all applicable licensure standards, relevant law and all governmental regulations.

A recent development in the for-profit world is the Sarbanes-Oxley legislation that details new standards for Boards of Directors regarding qualifications, conflicts of interest, and disclosure requirements, among others. While these regulations do not apply to non-profit organizations like hospitals, many have voluntarily adopted some of the prescribed standards and many Boards are evaluating whether to do so.

One of the distinctions made by Sarbanes-Oxley that we find useful is that of so-called inside versus outside directors, with limits on the numbers and percentages of each on a particular board. Applying this model to the charitable hospital setting, inside trustees would be members of the hospital management team, physicians that practice at the hospital, and anyone who receives some income from the institution. Outside trustees, required by Sarbanes-Oxley to be in the majority, are often community and religious leaders, volunteers, governmental officials, local business people and political figures from the area served by the hospital. At times, this can be difficult to assess as a person who appears to be an outside trustee, perhaps a local business leader, may actually be receiving funds from the hospital through their company having a business relationship with the organization. In smaller communities, this is quite common where there is only one leading bank or law firm and the hospital has little choice in either securing a trustee or where to receive the needed service. Having said that, these relationships must be described on a conflict of interest statement that should be completed by every trustee on an annual basis. These statements are considered public documents and can be view by an interested physician if so requested.

It should be noted that there is nothing inherently wrong with a trustee doing business with the hospital. It may be difficult not to have some business relationships on the board. These relationships must be disclosed and the particular trustee must abstain from any discussions and votes affecting their business. In practice, this is extremely difficult to monitor and some boards choose to simply not allow any business to be conducted with companies affiliated with board members.

Trustees are rarely compensated for their efforts other then expenses for attending meetings. Most often, they perform their duties out of a desire for service to their community. In some cases, a personal medical issue has brought them to the hospital and given them a heightened sense of interest in the delivery of patient care.

It is here, in the delivery of safe and high quality care, that the interaction between physicians and trustees becomes critically important to the achievement of the hospital’s mission. Every hospital is required to have a formal structure in place for the organized medical staff to advise the Board of Trustees regarding the recruitment and retention of qualified and competent professional staff members (physicians, nurses, technical personnel, etc), the selection of medical equipment, and the construction and maintenance of the hospital facilities. All of these matters come together to deliver the necessary patient care to the physician’s patients.

The formal structure requires certain committees to be in place, such as a medical executive committee and a pharmacy and therapeutics committee, and others. These committees meet on a regular basis and have a membership of physicians, nurses, appropriate administrative personnel, and occasionally, trustees. In my view, the best functioning committees include trustee membership so that they may be advised directly by the clinical staff regarding matters of importance to patient care. Where trustees are not present, information rises up to them through the normal filtering process that all human beings go through, and certain information may not make its way to the Board. It is only human nature to try not to pass on bad news or to selectively provide information, rather then to disclose negative circumstance that reflect badly on individuals or hospital procedures.

In many hospitals, wise trustees have their own informal mechanism for keeping tabs on the day-to-day operation of the hospital. Frequently, this starts with a medical need that brings them to a particular physicians’ office. That episode of care can blossom into a mutually beneficial relationship where both parties share their knowledge and insight regarding the practice of medicine as well as the business of operating a health care facility.

Failing the accidental connection, it is our advice that physicians seek out a relationship with a board member. Everyone benefits when the hospital’s trustees know what is perceived to be going on at the institution through the eyes of key physicians without the filtering of hospital administrators. Obviously, it also allows the physician to press for a particular cause or service at the hospital, or even a new piece of equipment needed by the physician’s patients. While this may trouble some individuals, it is simply pragmatic for a physician to develop relationships with the leadership of their institution. The delivery of health care is likely to be one of the most complex of human endeavors and most trustees have only informal knowledge or experience regarding their organization. It is therefore common sense that anything that increases their information will benefit patient care and make them more effective board members. Conversely, the absence of useful, direct information can seriously impair the board’s ability to successfully oversee the hospital.

In many states, regulations are in place that require some or all board meetings to be open to the public. Schedules of these meetings should be posted in the hospital and may be available on their website as well. Physicians are certainly welcome to attend the public meetings and become aware of the agenda that the board follows in conducting the hospital’s business. It will become readily apparent that the majority of the matters considered relate to financial issues and that often patient care issues may be discussed briefly or not at all. This is where the role of the medical staff organization can be enhanced by active physician involvement in pursuing an agenda that places patient care matters first. Engaged physicians make this happen and it is both their right and their responsibility to get involved in the business of the board.

Samuel H. Steinberg, Ph.D., FACHE, is Deputy Chair, Department of Medicine, Temple University School of Medicine.

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