Alongside issues such as education, housing, food, and shelter, healthcare is a universally accepted basic human need. As a result, governments and other stakeholders need to take it as a serious agenda. Not only do personnel need to be trained and health facilities filled with equipment, but sound policies also need to be adopted to ensure healthcare functions are delivered appropriately. To this end, healthcare governance takes on an important role as it carries a tangible effect on healthcare providers and patients. Governance in healthcare can be carried out under different models, and it facilitates policy-making, decurion-making, and oversight.
The main function of healthcare governance structures is well described by the three main roles played by healthcare board members – policy-making, decision-making, and oversight (Arnwine, 2002). Policy-making ensures that agendas are focused, and they differentiate the responsibilities to be fulfilled by different board members, the medical staff, and the management. A sound policy-making process is a facilitator of efficient board functioning. With regard to decision-making, a good governance structure ensures that strategies, missions, and visions are not only made on time but achieved in a timely manner. Lastly, a governance structure ensures that the process of oversight is taken seriously and not confused with management. In an oversight role, a good governance structure ensures that everything that happens in a healthcare institution is monitored and goes according to an established plan (Arnwine, 2002). In essence, healthcare governance structures promote efficiency.
The importance of good governance in healthcare extends far beyond the roles played by a board. More specifically, sound governance facilitates the processes of accountability and transparency. In terms of accountability, a proper governance system ensures that persons responsible for different operations are formally answerable to a board or management team. Similarly, good governance structures promote transparency as persons placed in authoritative and administrative positions in any health system are trustees of society when handling important health affairs (Dowton, 2022). With proper governance, therefore, openness and answerability are made central components of running a health entity.
Boards that serve in non-profit and for-profit organizations have differences in their structure of governance. In a non-profit setting, the Chairman of the Board is not supposed to serve as the Executive Director of CEO of the health organization in question. The separation of the two roles is recommended to avoid the possibility of conflict of interest (Epstein & McFarlan, 2011). For instance, the Chairman of the Board is tasked with overseeing compliance by the Executive Director hence the need to distinguish the two positions. As a result, the two roles should ideally be performed by different people.
Besides separating the roles of the Chairman of the Board and the Executive Director, another notable structural difference between for-profit and non-profit governance boards is the number of people. In a non-profit set up, it is preferable that the membership of the board is much larger and heterogenous (Epstein & McFarlan, 2011). One major reason for such heterogeneity is to ensure that there are as many ears and eyes on the governance board for the persons being represented. However, a caveat to this structure is that board processes are slowed down as each member seeks to leave a mark or influence others within the organization. As a result, caution should be exercised when establishing these boards so that they do not prove to be a stumbling block in the achievement of laid down missions and visions.
Today, there are many models of governance that are in use. These governance models differ based on the type of place or industry they are applied. In the corporate world, for instance, the shareholder governance model is not only the most popular type, but also one that is widely used. Also known as the Anglo-Saxon model, the shareholder model’s main features include the decentralization of ownership, adoption of securities markets, and clear rules on transparency (Shirwa & Onuk, 2020). Both shareholders and independent individuals are dominant in this model. Besides shareholder governance, the stakeholder model is another type of governance model. It is characterized by lower disclosure standards, centralized ownership, and little to no transparency. Such a system is popular in areas where the public plays a minor role in management (Shirwa & Onuk, 2020). The last type is the resource dependency model, where the members of a board are appointed based on their social or political capital. Such a model has been referred to as a trophy board as it carries too many VIPs. To disempower the board, an executive team or a chief executive is often the one in control, with board members reduced to verification (Chambers, 2012). While each of these boards is designed to function in specific circumstances, dysfunctionality is not uncommon.
In conclusion, governance in healthcare plays a crucial role in the management process. More specifically, governance ensures that board members can play their duties of policy-making, decision-making, and oversight. For-profit and non-profit institutions approach governance differently, and this is well illustrated in their governance structures. In particular, the number of board members and the need to distinguish the positions of CEO and Executive Director are the standout areas of difference. Governance models may vary from one industry to another, with the main ones being the stakeholder model, shareholder model, and resource dependency model. Given such variations, organizations should only choose those that are suitable to their interests.
References
Arnwine, D. L. (2002). Effective governance: The roles and responsibilities of board members. Baylor University Medical Center Proceedings, 15(1), 19-22. Web.
Chambers, N. (2012). Healthcare board governance. Journal of Health Organization and Management, 26(1), 6-14. Web.
Dowton, B. (2022). Governance in healthcare – Linkages, boundaries and the problems between corporate and clinical governance. Dowton Consulting International. Web.
Epstein, M. J., & McFarlan, F. W. (2011). Nonprofit vs. for-profit boards: Critical differences. Strategic Finance, 92(9), 28-35.
Shirwa, H. A., & Onuk, M. (2020). Corporate governance models and the possibility of future convergence. Journal of Corporate Governance Research, 4(1), 18. Web.