America is changing in too many ways to count. The political and cultural ramifications of an increasingly pluralistic population are harder and harder to predict and make overall governance of complex healthcare organizations an increasing challenge.

For starters, the definition of healthcare is fast changing, and it now includes not only inpatient and outpatient clinical care but also the broader demands of public health. And that public health definition gets broader and broader every day, and now encompasses the COVID-induced mental health epidemic and the nationwide accelerating gun violence.

This widening definition of healthcare is demanding a new board vision of service to its community and a new associated strategic plan that re-sets the next ten years of American healthcare.

In the past, the board’s job was relatively straightforward: to monitor and oversee the internal workings of its hospital and health system. That remains a key board role. But in 2021, the business externalities are in ascendancy. No hospital board can set a correct strategic direction without accurately recognizing and reacting to unprecedented external business conditions. These externalities are remarkable and at the least include:

  • The unknown post-COVID care and economic environment
  • Accelerating business technological changes
  • Rapidly evolving changes in consumer demand
  • The escalating demands of the social justice movement
  • Fast-developing strategic requirements of climate change
  • A divisive political/business environment
  • An American culture that is increasingly difficult to interpret and navigate

Finally, every board must recognize the power and influence of a fast-changing stakeholder environment. In the recent past, healthcare system stakeholders included the board, management, and doctors—period. But now, the stakeholders that impinge on health system operations and policy include patients, employees, sub-groups of employees, multiple communities, local government, state government, the federal government, political movements, religious influences, other not-for-profit organizations, BIG media, and social media. It all comes together to form an essentially uncontrollable business environment that seems to change by the day and sometimes by the hour.

When you add the external business conditions to the long line of activist stakeholders, you get a rather new list of board challenges and responsibilities that include:

  • Social justice and good citizenship are requirements of the modern American corporation
  • Key elements of social justice are increasingly broad, including diversity, equity, inclusion, sustainability, economic fairness and access to education and healthcare
  • The scope of social justice and responsibility will continue to expand and the pace will accelerate
  • Healthcare boards will need to decide the extent to which they choose to lead these efforts, understand the repercussions of such positions, and set the strategic direction of their health systems accordingly

It’s hard to be a hospital board in 2021, and it’s not likely to get easier anytime soon.

Meet the Author
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Kenneth Kaufman

Managing Director, Chair
Kenneth Kaufman offers deep insights on the economic, technological, and competitive forces undermining healthcare’s traditional business model.
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