Academic journal article Frontiers of Health Services Management

Loosening the Gordian Knot of Governance in Integrated Healt

Academic journal article Frontiers of Health Services Management

Loosening the Gordian Knot of Governance in Integrated Healt

Article excerpt

A new organizational form is emerging--the integrated health care delivery system. This article focuses on one aspect of these systems, their governance. Located at that point where all aspects of the system and all that it does come together, governance could--and, perhaps, should--be the ultimate integrator. Yet, in many systems this is not the case. Why not? We suggest there are at least three reasons.

First, governance is often an afterthought. As integrated systems develop, they face a myriad of important issues: What organizational structure should be put in place? What mechanisms should be employed to achieve clinical integration? How should a continuum of care be constructed? How should the system assume and manage financial risk for the provision of a comprehensive package of services to a covered population? What approaches should be employed to integrate physicians within the system? What type of managerial, financial, and clinical information systems are needed? Given the importance, immediacy, and complexity of these and many other issues, governance may not seem critical--at least not at the onset. However, we contend that issues of governance are pivotal and left unattended may serve as barriers to, rather than facilitators of, successful system integration and success.

Second, the distinctive issues and associated challenges of integrated health care system governance are not always fully recognized or confronted. Matters such as whether governance should be centralized or decentralized (and if so, to what degree), the delicate balances that must be struck in allocating authority and power among multiple layers (and different types) of boards, and the governance of "nonowned" system partners are complex, and there is little precedent on which to rely in developing solutions.

Third, the different ways in which integrated systems can be governed--in addition to their strengths, weaknesses and varying degrees of effectiveness--are not well understood. The nature of integrated systems severely limits the extent to which existing governance forms employed by stand-alone institutions or multihospital systems can be merely "brought forward" or "carried over." The distinctive characteristics of integrated health care delivery systems and the distinctive governance issues and challenges they face precipitate the need to design new governance forms.

Although very little attention has been accorded the topic, we contend that governance is exceedingly important in that it can significantly facilitate or impede the formation, development, and performance of integrated systems. Building on this premise, we will address three questions:

1. By way of introduction, what are the distinguishing characteristics of integrated health care delivery systems?

2. What are the distinctive issues and challenges associated with governing such systems?

3. Along what dimensions can the forms of integrated health care system governance be described, and what factors are likely to influence the prevalence and effectiveness of different forms?

Underpinning the development of this article are several efforts that warrant mention. First, an extensive review of the health care and commercial organization governance literature was conducted. Second, two focus groups were organized under the auspices of the American Hospital Association (AHA). One, sponsored by the AHA's Section for Health Care Systems, was held in January 1994 and brought together system executives, trustees, and consultants to consider issues specifically related to integrated system governance.(2) The other (sponsored by AHA Community Leadership/Community-Based Services) was held in May 1994 and included executives and trustees from both hospitals and systems in addition to consultants;(3) this meeting focused on both institutional and system governance. The discussions that took place in these focus groups significantly influenced our thinking. …

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