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

Abstract

Hospitals are complex and imposing institutions. They are vital to the communities they serve and to society as a whole. They are places of joy and sorrow, rescue and loss, recovery and death. They command enormous capital investment, expensive high technology, and often the largest payrolls of any organization in their community. They are monuments to governmental and philanthropic largess. Most are now integrated health systems offering multiple health services and countless activities under the headings of counseling, education, health promotion, and community service. They employ and support the practice of some of the most highly trained, intelligent, and capable professionals in the nation; their hallways are thick with titles, academic honors, and advanced degrees. Over half of the nation's hospitals today are not-for-profit organizations, traditionally called voluntary because, while they are managed by specialized professionals, they are governed and supported by volunteers--philanthropists, community leaders, business people, clergy, and others with a civic orientation of service. These are not-for-profit hospital trustees, men and women who serve without pay and who are entrusted with the oversight, mission, and strategic operations of these expensive and vital institutions. (1) It is important to all of us that not-for-profit hospitals be governed well and trustees do their job well. Hospitals deal with the most fundamental matters of human well-being; their services are not just another commodity in the marketplace. By providing health care services of high quality, a hospital is an important community resource. Those who run not-for-profit organizations owe a fiduciary duty to the founders, benefactors, and donors who support the institution with an expectation that their money will be used in certain ways and for certain purposes. Not-for-profit hospitals also enjoy tax exempt status in return for fulfilling certain public purposes, and thus those who govern these institutions have a responsibility to all citizens and taxpayers to ensure that these public purposes are realized. There is much with which trustees have been entrusted. These public and private fiduciary promises, implicit in each trustee's acceptance of appointment to the board, lay the foundation for a set of more specific ethical and legal duties that not-for-profit hospital trustees assume. This report is a discussion of the roles and responsibilities of those who serve on not-for-profit hospital boards. It is about the ethics of being a trustee. (2) It is about how ethics can be used to assist, facilitate, and enable already virtuous people to make hard choices. It is not about one right answer but about striving to do the right thing for the right reasons. In a legal sense, not-for-profit trustees are not as highly regulated or as accountable as the directors of for-profit corporations, who are formally accountable to the shareholders who elect them. State attorneys general oversee the conduct of not-for-profit trustees, and they rarely use their regulatory power to interfere with board actions, except in cases of the most blatant misconduct and abuse of trust. (3) The law trusts trustees and provides a set of general guidelines for conscientious service. The legal obligations of hospital trustees can be summarized as a duty of care, a duty of obedience, and a duty of loyalty. (4) The trustee must attend meetings and become informed enough to make reasonable, prudent decisions. A trustee must adhere to the mission of the hospital. A trustee must pursue the best interest of the hospital and not misuse his or her position to advance personal interests. The trustee must avoid conflicts of interest, engage in open decisionmaking, and act with an independent mind and in a fiduciary spirit. This emphasis in the law of trusts and trusteeship on personal, conscientious goodwill and ethical motivation comports well with the perspective of ethics. …