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A book on budgeting and finance in healthcare isn't really complete without a discussion of governing boards and specialty organizations. This chapter discusses both of these topics.

What Is a Governing Board?

The purpose of an organization's governing body is just as its name implies: governance. More specifically, a governing board governs, or oversees, an organization's financial operations.

The governing body for a hospital or healthcare system typically consists of the following:

  • A board of directors

  • The chief executive officer (CEO)

  • Nonvoting members, such as the chief nursing officer (CNO) or chief financial officer (CFO)

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In most cases, the CEO is a voting board member. The CNO is typically not a voting board member but generally attends all board meetings as an invited guest.

Governing bodies also generally have an executive committee. For example, on a hospital board, the executive committee might consist of the following:

  • Chair

  • First vice chair

  • Second vice chair

  • Treasurer

  • Secretary

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Titles as well as term limits vary from organization to organization. These are regulated by board bylaws.

Governing boards for hospitals and healthcare systems are typically broken down into committees such as strategic planning, quality and safety, and finance. In addition, ad hoc committees may be appointed to study special issues or circumstances and report back to the board. When the work of the ad hoc committee has been completed, the committee is dissolved.

Health System Network Boards Versus Health System Hospital Boards: What's the Difference?

Simply stated, the major difference between a health system network board and a health system hospital board is that the network board focuses on broad organizational issues across the entire healthcare system and the communities within that system, while the hospital board focuses on issues pertaining to a specific hospital(s) within the system and the communities that hospital(s) serves. As an example, consider quality improvement. A network board focuses on quality throughout the entire system, while a hospital board focuses on quality indicators in that specific hospital.

The Responsibilities of a Governing Board

Governing board members have a critical fiduciary responsibility. They provide financial oversight to ensure that the organization remains fiscally sound and play a major role in determining how funds are spent.

More specifically, the primary responsibilities of a governing board for a hospital or healthcare system are as follows:

  • Hiring the executive staff to manage and run day-to-day operations at the facility

  • Ensuring fiscal accountability

  • Giving final approval on all policies and procedures

  • Credentialing the medical and associate medical staff—for example, advanced practice nurses

  • Ensuring quality and safety

  • Strategic planning

  • Handling capital improvement projects

  • Fundraising

  • Engaging in community activism

  • Making major human capital resources decisions (that is, what employees ...

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