Hospital Boards Seeing Low Turnover Rates, AHA Finds

Click to access aha-2019-governance-survey-report_v8-final.pdf

A survey of hospital and health system CEOs noted opportunities for improvement in board governance, alongside some positive trends.

The boards of trustees governing U.S. hospitals and health systems have relatively low turnover rates in an industry that’s shifting rapidly, according to a survey report released Wednesday by the American Hospital Association.

The survey asked more than 1,300 CEOs of nonfederal community hospitals and health systems in the U.S. about their organizations’ governance structures and practices, then the AHA compared their responses to data collected in a similar survey five years ago.

The researchers found that the policies and norms in place for most healthcare organizations result in low levels of board turnover.

The report cited several related opportunities for improvement:

  • Nearly a third of all respondents said their boards do not use term limits at all.
  • More than 75% of respondents said their organizations either didn’t replace board members during their terms or kept reappointing them (when eligible) within the past three years, rather than recruiting a fresh face.
  • Formal assessments were not conducted within the past three years for boards, board members, or chairpersons at 31% of respondent organizations.
  • Older board members are increasingly common. Overall, 12% of board members were age 71 or older in 2018, up from 9% in 2005, the report states. The percentage of members age 50 or younger was 22% last year, down from 29% in 2005.

Luanne R. Stout, president of Stout Associates based in the Dallas/Fort Worth area and a retired Chief Governance Officer of Texas Health Resources, wrote in commentary included with the report that healthcare organizations have a number of options when trying to foster a healthy degree of board turnover.

“Term limits (usually three or four consecutive, three-year terms) are helpful in accomplishing board turnover; however, some boards are reluctant to adopt term limits for fear of losing highly valued board members,” Stout wrote. “Boards that annually review board member attendance, performance and contribution can achieve desired levels of rotation and competency enhancement without utilizing term limits.”

The AHA report also notes some positive trends around healthcare board governance, including the following:

  • There has been some increase in racial and ethnic diversity among board members. The survey found 58% of respondents had boards with at least one non-white member, up from 53% in 2014. (That means about 42% of boards were still composed last year entirely of white members.)
  • A majority of boards restructured to improve their governance.
  • Nearly half of all system boards include members from outside the communities served.

“This year’s survey demonstrates how hospitals and health system boards are rising to meet tomorrow’s challenges through redefining roles, responsibilities and board structures,” said AHA President and CEO Rick Pollack in a statement. “These changes are not surprising given the continued transformation in where, how, when and from whom patients receive care.”




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