Hospital board effectiveness: relationships between governing board composition and hospital financial viability.
OBJECTIVE
Two theories--agency and managerialism--are compared with respect to their usefulness in explaining the role of insiders on the hospital board: whether their participation enhances or impairs board financial decision making.


METHODS
The study used 1985 hospital financial and governing board data for a representative sample of acute care California hospitals.


METHODS
Relationships were examined cross-sectionally between the presence or absence of insiders on the board and measures of hospital financial viability while controlling for the organizational factors of system affiliation, ownership, size, region, and corporate restructuring.


RESULTS
Multiple regression analysis found significant relationships between insider (CEO, medical staff) participation and hospital viability.


CONCLUSIONS
These results support the managerial theory of governance by suggesting that the CEO and medical staff provide informational advantages to the hospital governing board. However, the cross-sectional design points to the need for future longitudinal studies in order to sequence these relationships between insider participation and improved hospital viability.
Molinari
C
C
Division of Health Administration, Department of Health Services, University of Kentucky, Lexington 40536-0080.
Morlock
L
L
Alexander
J
J
Lyles
C A
CA
D000704:Analysis of Variance; D015982:Bias; D002140:California; D016542:Chief Executive Officers, Hospital / Q000706:statistics & numerical data; D003659:Decision Making, Organizational; D005069:Evaluation Studies as Topic; D005377:Financial Management, Hospital / Q000592:standards* / Q000706:statistics & numerical data; D006075:Governing Board / Q000458:organization & administration* / Q000706:statistics & numerical data; D006302:Health Services Research / Q000379:methods; D007221:Industry / Q000706:statistics & numerical data; D008505:Medical Staff, Hospital / Q000706:statistics & numerical data; D012044:Regression Analysis; D011795:Surveys and Questionnaires