Healthcare Finance Policy in the US: The Role of Governance

Healthcare Finance Policy in the Use: The Role of Governance
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Healthcare Finance Policy in the Use: The Role of Governance
According to Arnwine (2002, p. 1), running a health care organization is a team sport. In other words, it is essential that all members involved, whether on the medical staff, onboard, or in management, understand the role of governance and what it means to have effective governance. By definition, governance is the combination of systems, policies, structures, and strategic or operational framework that a governing body puts in place to ensure appropriate decision-making and delivery of services effectively (Macnamara, 2005, p. 1). In Arnwine's view, there are many misunderstandings about the roles of boards. For instance, board members are not paid, yet many believe paid. In this regard, the current paper seeks to add to the issue by exploring the importance of governance, how governance differs between for-profit and nonprofit organizations, and the most utilized governance models in modern healthcare organizations.
Importance of Governance Structures in Healthcare
There are three core functions of governance that highlight the importance of governance structures in healthcare. The first core role is making policies (Arnwine, 2002). A policy is a principle of action proposed or adopted by an individual or an organization. It stipulates what and how actions will be taken, who will be responsible for the actions, and the budget involved. Under policy formulation, there are two core roles of governance. In the first instance, boards define the focus and differentiate responsibilities among board members, management, and the medical staff. In the second instance, the board's role is to review past policies and determine whether they are still needed given the drastic changes in healthcare delivery.
The second key role of the board is decision-making. Healthcare organizations impact many people, and therefore, decision-made should be accounted for because they may decide between life and death (WHO, n.d.). Decision-making in governance involves deciding on the vision, mission, and strategies that guide the organization or the sector (Bigdeli, Rouffy, Lane, Schmets, & Soucat, 2020). Examples of critical decisions include joining other organizations, adopting technological solutions, and approving important innovations for utilization within organizations and the public health system. Thus, the board makes decisions that determine how management is done and how medical staff members are supposed to carry out their activities, including the ethical and legal constraints they should operate.
The third role of governance is oversight. In this case, the board is legally responsible for everything within a health organization (Arnwine, 2002). For instance, in terms of quality improvement, the board establishes policies, ensures mechanisms are in place, provides plans, and allocates resources. In its oversight role, the board should ensure clear lines between board and management responsibilities. This is important because management is a day-to-day activity, while board meetings are rare throughout the year.
While these three...