iProtean—Increase in Hospital-Employed Physicians

Guest Submission:  Barry Bader, Bader & Associates


Physician participation on hospital boards has been a widely recommended practice for several decades—a way to strengthen hospital-medical staff relationships and build the board’s competency in clinical matters.  Surveys generally show that 15% to 25% of the typical hospital board is composed of physicians, often including the elected president of the medical staff as an ex officio board member.


Despite the unquestioned value and commitment many physician trustees bring, the inclusion of active medical staff members has become more problematic for several reasons.  Employed physicians are becoming a substantial proportion—often a majority—of the active staff.  Having hospital employees other than the CEO (who reports directly to the board) serve as a voting board member is generally not advisable.


What’s more, the Internal Revenue Service requires that more than half of a hospital board with fiduciary responsibility be independent members.  Only independent members should serve on the audit and executive committees, and neither employed nor contracted physicians pass these thresholds.  Compounding the conundrum, if one or more medical staff officers is an ex officio trustee with vote, it’s possible that an independent physician who competes with the hospital or doesn’t share its goals could wind up as a trustee—hardly a desirable situation.


There are no easy or one-size-fits-all answers to the problem.  But some fresh thinking appears in the upcoming iProtean course, Physicians & Governance.  The course features Lisa Goldstein from Moody’s Investors Service, Monte Dube, Esq. from Proskauer and me discussing our views on the new landscape for physician members on hospital boards—the traditional roles physicians have played as hospital trustees and why board service for physicians has become more of a challenge.


We review the competencies boards should seek in selecting physicians to serve on hospital boards, common mistakes hospitals and medical staffs make when changing selection methods, and emerging best practices related to physician board membership.


Increasingly, boards and medical staffs will come to recognize that “voting physician seats” on the board are not where the action is anymore to influence patient care in a positive way.  Rather, as hospitals transform into integrated care systems with aligned medical staffs that are accountable for their costs and quality, the most important venue for physician engagement in organizational leadership and decision making will be in a clinical leadership infrastructure, not the governing board.


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iProtean will release Physicians & Governance early in 2013. Barry has also written on this topic in Great Boards and the article is now available at www.greatboards.org.


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