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Does Governance Matter? Board Configuration and Performance in Not‐for‐Profit Hospitals
Author(s) -
ALEXANDER JEFFREY A.,
LEE SHOOUYIH D.
Publication year - 2006
Publication title -
the milbank quarterly
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.563
H-Index - 101
eISSN - 1468-0009
pISSN - 0887-378X
DOI - 10.1111/j.1468-0009.2006.00466.x
Subject(s) - corporate governance , business , accounting , industrial organization , finance
As performance accountabilities, external oversight, and market competition among not‐for‐profit (NFP) hospitals have grown, governing boards have been given a more central leadership role. This article examines these boards' effectiveness, particularly how their configuration influenced a range of performance outcomes in NFP community hospitals. Results indicate that hospitals governed by boards using a corporate governance model, versus hospitals governed by philanthropic‐style boards, were likely to be more efficient and have more admissions and a larger share of the local market. Occupancy and cash flow were generally unrelated to hospitals' governing board configuration. However, effects of governance configuration were more pronounced in freestanding and public NFP hospitals compared with system‐affiliated and private NFP hospitals, respectively.