Brief history of hospital structure in America vs the CNMI

Second of a three-part series

Today’s American hospitals most typically have three areas of governance for direction and control. The medical staff represents the physicians and typically makes recommendations for appointment to the hospital medical staff to a board of trustees. In addition, it provides self-directed peer review as a form of self-oversight. No other function gets in between the doctor-patient relationship.

The hospital administration employs a nursing supervisor or director of nursing. All nurses are under these department heads. The second is the hospital administration. They oversee the day-to-day financial structure of the hospital. If and only if physicians are employed then the administration has power over these physicians as well.

The goal of “the patient comes first” by physicians is often in conflict with “the financial side comes first” of hospital administrators. Luckily, lessons were learned from the founding fathers of the first Continental Congress. By the time our Constitution was born, it was clear to Franklin, Adams, Jay, Morris and George Washington, that power within a democracy “for the people and by the people” should not rest with one person, for history has shown that “absolute power corrupts absolutely.” Today, the American system of hospitals each has a third and ultimate power of governance. They have a board of trustees to adjudicate and intervene in times were the hospital administrations and the physicians do no share parallel interests and in times where physicians in control of privileging and credentialing show malice toward newcomers of members of the medical staff that they want out for political reasons.

The powers, duties, and responsibilities are conferred upon the board of directors by an authority outside itself. Having a board of directors helps to ensure that no one person is more important than the corporation itself and sets the tone for the moral direction and mission of the hospital.

Switch to England in 1906. The English Court of Appeal, in Automatic Self-Cleansing Filter System Company versus Cunningham, found that the role of the board was bound by the “articles of association.” The board members must use “proper purpose” and not self-serving interest and must have a quorum in order to convene.

The law takes the position that “good faith” must be done by the board. They are fiduciary directors and conflicts of duty and interest are typically divided into three categories. Conflicts of interest are where the board member seeks to gain personally or give favoritism to an administrative action by way of political alliance to which he himself will receive some monetary or non-monetary gain. The board member has a strict obligation to disclose any conflicts of interest and remove himself from voting in these matters involving conflict of interest. The second is that the board member must not use the hospital’s property, information, or opportunity for their own means or profit, and the third is that the board member may not profit from the hospital or corporation.

To be continued.

Grant Walker, MD
Board Certified and Spine Fellowship Trained Orthopedic Surgeon, Idaho