Ethics and Trusteeship for Health Care:Hospital Board Service in Turbulent Times

The slides presented here are drawn from a research project conducted by

The Hastings Center

and

The New York Academy of Medicine

Project Staff

• Bruce Jennings MA, Project Co-Director (The Hastings Center)

• Alan Fleischman MD, Project Co-Director (The New York Academy of Medicine)

• Bradford H. Gray PhD (New York Academy of Medicine)

• Virginia Ashby Sharpe PhD (Hastings Center)• Linda Weiss PhD (New York Academy of Medicine)

Project Task Force

• William N. Hubbard, Jr., M.D., University of Michigan, Chair

• Vincent Antonelli, M.A., The New York Academy of Medicine

• Jeremiah A. Barondess, M.D., The New York Academy of Medicine

• Henry Betts, M.D., Rehabilitation Institute of Chicago• Irwin Birnbaum, J.D., Yale University• Stanley Brezenoff, Maimonides Medical Center• Gerard Carrino, MPH, The New York Academy of

Medicine

Project Task Force contd.

• Edward J. Connors, MHA, Connors/Roberts & Associates

• Strachan Donnelley, Ph.D., The Hastings Center

• Charles J. Dougherty, Ph.D., Creighton University

• Joseph J. Fins, M.D., The New York and Presbyterian Hospital – Cornell Campus

• Alan R. Fleischman, M.D., The New York Academy of Medicine

Project Task Force contd.

• Livingston S. Francis, Livingston S. Francis Associates

• Harvey J. Goldschmid, LL.B., Columbia University

• Bradford H. Gray, Ph.D., The New York Academy of Medicine

• Bruce Jennings, The Hastings Center

• Anthony Kovner, New York University

Project Task Force contd.

• Patricia Levinson, Trustee, Mt. Sinai Hospital, New York• Paula Lowest, J.D., Weil, Gotschal and Manges• William F. May, Ph.D., Southern Methodist University• Richard L. Menschel, The Goldman Sachs Group, L.P.• Linda Miller, Volunteer Trustees of Not-for-Profit

Hospitals• Ira Millstein, LL.B., Weil, Gotshal and Manges• Mary Pittman, Dr. P.H., The American Hospital

Association• Kenneth Raske, Greater New York Hospital Association

Project Task Force contd.

• Paul Rulison, Healthcare Trustees of New York State

• David Seay, JD, United Hospital Fund

• Virginia A. Sharpe, Ph.D., The Hastings Center

• David H. Smith, Ph.D., Indiana University

• William C. Stubing, The Greenwall Foundation

• Susan Waldman, Esq., Greater New York Hospital Association

• Linda Weiss, Ph.D., The New York Academy of Medicine

The Ethics and Trusteeship for Health Care Project

was made possible by a grant fromThe Greenwall Foundation

For further information contact

Bruce Jennings

The Hastings Center

Garrison, New York 10524

845-424-4040

Jennings@thehastingscenter.org

Ethical Principles of Not-for-Profit Hospital Trusteeship

The Uses of Ethical Principles

• Principles apply to patterns of conduct in the performance of a role

• Parallel virtues, which apply to moral agents

• Derive from the basic human and social ends served by a role

• Principles state general moral duties

• Complex roles usually encompass more than one principle

• Principles may conflict

• Principles provide guidance, not absolute answers

Applying Ethical Principles

• Principles are not static

• Principles need to be applied to specific circumstances

• Principles may conflict in given circumstances

• Moral values and ends are plural, so principles may point in more than one direction

• Principles require interpretation

Ethical Principles of Trusteeship

S erv ice to P a tien tsan d C a re o f th e S ick

S erv ice to th e C om m u n ity S erv ice an d S tew ard sh ipto th e In s titu tion

F id elity to M iss ion

Principle of Fidelity to Mission

Trustees should use their authority and best efforts justly to promote the integrity and fulfillment of the mission of the not-for-profit organization, and to keep that mission alive by interpreting its meaning over time in light of changing circumstances.

Principle of Service to Patients and the Care of the Sick

Trustees should ensure that high quality health care is provided to patients in an

effective and ethically appropriate manner.

Principle of Service to the Community

Trustees should govern hospital policy and deploy hospital resources in ways that

enhance health and quality of life in the broader community that the hospital serves.

Principle of Service and Stewardship to the Institution

Trustees should sustain and enhance the integrity of the hospital as an institution, as an effective organization for the delivery of high quality health care services, and as a

moral community of caregiving.

TRUSTEES’ VIEWS OF THEIR ROLES AND ETHICAL ISSUES THEREIN:

FINDINGS FROM AND EMPIRICAL STUDY

Bradford H. Gray, Ph.D.Linda Weiss, Ph.D.

The New York Academy of Medicine

Purpose of Project: Learn How Hospital Trustees View Their Role

• To identify ethical issues with which trustees are dealing

• To see whether trustees themselves see ethical issues in their activities

• Study is exploratory

Research Methods

• 2 Samples of Hospitals

16 in Greater New York, including SW Connecticut. Random and Diverse

6 elsewhere that have considered for-profit sale or conversion

Research Methods

• Interviews at each hospital with CEOs, Chairs, and three other trustees (finance, clinical care, community)

• Total of 98 interviews at 22 institutions

• Data collected 1998 and early 1999

Ways of Learning AboutTrustees and Ethics

• Asked how they view the responsibilities of trustees

• Asked whether their board has dealt with “ethical issues” in recent years

• Asked to discuss two major issues their board had dealt with in past year

How Trustee Responsibilities Are Defined (N=98)

• Oversight (91)

• Board/CEO Relationships (45)

• Policy Making (16)

• Hospital’s Charitable Role (7)

• Fundraising (7)

• Trustees as Representatives (6)

• Advocates for institutions (5)

How Trustee Responsibilities Are Defined (N=98)

• Oversight (91)Financial, fiduciary responsibility, stewardship (43)References to community (36)References to quality (32)References to mission (28)Seeing that policies are followed or goals met (10)Legal responsibilities (8)Responsible for everything (20)References to ethics (3)

How Oversight Responsibilities to “Community” Were Described

“Trustees have a fiduciary responsibility to make sure resources given to the hospital are used properly. We represent the community in assuming this responsibility.” (Trustee, urban hospital)

“We hold the hospital in trust for the community” (Chair, community hospital)

“We have a responsibility to the community to maintain the hospital so that it can effectively meet the needs of the community. If the hospital isn’t strong, then it’s not doing its job for the community.” (Chair, urban hospital)

How Oversight Responsibilities Regarding “Mission” Were Described

“Trustees are to support and uphold the mission of the institution. To make sure we are following what the mission is and doing it in a way that is financially responsible.” (CEO, teaching hospital)

“…to ensure that the mission is carried out in a compassionate manner. (Trustee, teaching hospital)

“…to develop and ratify the mission for the institution and to oversee the fulfillment of the mission” (CEO, community hospital)

How Ethics Were Mentioned Regarding Trustees’ Oversight Responsibilities

Trustees should “ensure that the hospital provides ethical and appropriate services” (Chair, urban hospital)

Trustees should “make sure the hospital is fiscally and socially responsible…” (Trustee, major teaching hospital)

The Broad View of Trustees’Oversight Responsibilities

“Well of course, ultimately [we’re] responsible for everything that happens at the institution. As a practical matter, the [trustee’s] primary responsibility is to ensure that to the best of his ability – his or her ability – that the systems and procedures are in place to ensure that the care delivered is of the highest quality and that it is delivered in a financially responsible manner. And much flows from that” (Chair, teaching hospital)

How Trustee Responsibilities Are Defined (contd.)

• Policy Making (16)

Setting goals and policies (16)

Defining mission (2)

Making resource allocation decisions (12)

Strategic planning (12)

How Trustee Responsibilities Are Defined (contd.)

• Board/CEO Relationship (45)

Oversight (32)

Hire and Fire (12)

Supporting management (10)

How Responsibilities in RelationTo CEO Were Described

“[The board’s job] is to select the CEO and monitor his performance, to ratify his decisions, change his mind, or replace him. If too much is done by trustees regarding running the organization, it brings mediocrity.” (Trustee, urban teaching hospital)

“We’re not running the hospital. We’re setting the board policy under which people that we chose are running the hospital. If we get unhappy with the way the hospital is run, then we get a new CEO.” (Chair, teaching hospital)

How Trustee Responsibilities Are Defined (contd.)

• Hospital’s Charitable Role (7)

• Trustees as Representatives (6)

• Fundraising (7)

• Advocates for institution (5)

Trustee’s Identification of Ethical Issues

The Question We Asked:

“Of the issues your board has considered in recent years, are there any you think of as ethical issues?”

Most common response?

Ethical Issues Identified by Trustees

• Ethics of Trusteeship

Conflict of Interest (13)

Board Composition (2)

Ethics in Trusteeship

• Patient-related issues (39)

Care of terminally ill (8)

Abortion, reproductive services (6)

Patient Rights (e.g. privacy) (2)

Hospital ethics committee (8)

Patient care incidents (17)

Ethics in Trusteeship (contd.)

• Mission-Related Issues (23)Decision whether to stay in the city or relocate

Decisions regarding availability of specialized services that meet the needs of the community

Decision whether to help nearby struggling institutions

Decisions whether to permit two standard of care – for the rich and poor – within the hospital

Ethics in Trusteeship (contd.)

• Mission-Related Issues (contd.)

Making sure that the hospital is not turning away patients that need help

Tensions between commitment to the hospital versus commitment to the community in trying to assure financial soundness of the institution

Trying to represent fairly the hospital’s different constituencies regardless of one’s bias or connections

Ethics in Trusteeship (contd.)

• Mission-Related Issues (contd.)

Deciding to close facilities that were losing money or in need of major capital infusions

Deciding whether to sell to a for-profit purchaser

Resource allocation decisions

Mission-Related “Ethical Issues”in Merger/Sale Context

“It looks like we will be doing a full asset merger with [two other hospitals]. Mission compatibility is our primary concern; we exist to serve a very needy population. (CEO, urban community hospital)

“Ethics are implicitly discussed in terms of our commitment to the community and how to maintain it. Questions include who is going to own the hospital and how to protect community control of the institution. (CEO, urban community hospital)

Mission-Related “Ethical Issues”in Merger/Sale Context (contd.)

“Ethical issues? I think of them primarily as survival

issues. But maybe ethical is “what is our responsibility to the community?” That was certainly our decision to go ahead with the [deal to help another hospital].” (Chair, urban community hospital)

Mission-Related “Ethical Issues”in Merger/Sale Context (contd.)

“The merger with a Catholic hospital presented a number of ethical issues. The agreement calls for us not to be governed by the ethical and religious directives of the Catholic Church. But there was a lot of discussion about how the community would respond to a relationship with a Catholic facility and whether there would be any indirect influence to do things that we would not normally do or restrict things that we would not normally restrict. And what it will mean for us in the long run and the short run.” (CEO, non-urban community hospital)

Ethics in Trusteeship (contd.)

• Business-Related Issues (29)

Dangers of additional debt

How admissions office should handle patient who arrive without a proper referral from a physician

How to handle downsizing and layoffs

Extent of salary differences at top and bottom

Ethics in Trusteeship (contd.)

• Business-Related Issues (contd.)

Deciding whether over-payments identified in the hospital’s compliance program should be returned to payer

Having a strong corporate compliance program to assure that the institution does not violate regulations and law

The Global View of Ethics

“Probably every issue we face has an ethical aspect. If we weren’t cognizant of the fact that we represent the community and the delivery of health care needs that it expects and requires, then our ethical responsibility would require it…If we make decisions improperly or without proper information in effect we’ve hurt these people in terms of access, quality, and comfort ability of receiving care, and then ethically have not begun to do our responsibility as trustees of health.” (Trustee, Non-urban community hospital)

The Global View of Ethics

“I think every issue we deal with is an ethical issue. If you’re adopting a budget, that’s and ethical issue. How much money do you allocate to the emergency room? How much money is available for unreimbursed care? How do you take care of the uninsured? When do you decide you’re going to let some people go, those are ethical decisions. I think it’s hard to separate out ethics from any decision facing a board today in any hospital. We’re literally dealing with the most fundamental ethical issues that we have. Care for the sick and needy. I don’t know how you can get more fundamental than that. There are other ethical issues that have to be addressed. Do you treat people differently because they can pay? Do you treat people differently because they’re on Medicaid as opposed to private insurance? I can tell you from the very beginning, [this hospital] has always been committed to one level of care” (Trustee, urban community hospital)

Core Governance Responsibilities

• Provide Direction for the Organization

VisionMissionValuesGoalsInitiative (strategies)Policies

Core Governance Responsibilities

• Enhance Assets of Organization

FinancialHumanReputationFacilities

Core Governance Responsibilities

• Appoint, Support & Evaluate the CEO

Hold accountable for performance

Board Chair/CEO Partnership

Succession Planning

Core Governance Responsibilities

• Assess & Improve the Quality of Services

Clinical & Support ServicesClinical Appropriateness & OutcomesContemporary StandardsEnvironment of Continuous Quality

Improvement

Core Governance Responsibilities

• Take into account the needs of the population served; unmet community needs & the needs, perceptions & viewpoints of key stakeholders

Core Governance Responsibilities

• Be publicly accountable for the financial & clinical performance of the organization

Essentials for Governance Effectiveness

• Time & commitment of all members

• Requisite knowledgeLearning curve is continuous & steep

Requires continuous education

Essentials for Governance Effectiveness

• Appropriate size & composition

• Strategic orientation & behavior

• Reliable & valid governance information system

• Processes that achieve timely & informed board decisions