November 08, 2024
Column

Hospital ‘loyalties’

Last week, 280 incorporators of Eastern Maine Medical Center and Eastern Maine Healthcare elected a slate of trustees to supervise the operation of the largest health care provider in our area.

The community “ownership” of EMH/EMMC is represented by the incorporators, the vast majority of whom are not physicians or administrators, but concerned citizens of the community who have no personal financial interest in the institution. Their only interest is that the health needs of our community be well served by this not-for-profit health care organization.

A group of newly elected and re-elected trustees and directors will now direct EMMC and EMH toward achieving this goal. They will be faced with the latest buzzword for Hospital and Healthcare trustees: corporate “loyalty.” From the corporation’s perspective, this is defined as the pre-eminent duty of board members to act exclusively toward the benefit of the corporation.

The emphasis on corporate “loyalty” is a reaction to the disloyalty of corporate boards that led to the failure of such entities as Enron and Allegheny Health Education and Research Foundation. The board of directors of Enron benefited themselves and senior administration, to the now well-recognized detriment of the company, its employees and shareholders. But companies like Enron differ from hospitals where the mission is not primarily the generation of profit. The directors of nonprofit hospitals should temper their corporate loyalty with community loyalty.

Allegheny was a conglomeration of hospitals, most of which were not-for-profit institutions that eventually lost focus on their original mission, eventually growing into a larger organization which concentrated on market share. They overreached in expansion, and floundered financially. The culmination has been the closure of a number of their hospitals, including the announcement this past month of the permanent closure of the 162-year-old hospital of the Medical College of Pennsylvania (my old medical school hospital). Certainly the incorporators and trustees of the Medical College of Pennsylvania witnessed a drift from the prime mission of their institution. The soon-to-be empty shell of the Hospital of the Medical College of Pennsylvania is not the vision its incorporators had.

Our new and old trustees must remember that their power to govern comes from the incorporators. Our trustees’ “loyalty” is perhaps best oriented toward the community interests that these incorporators represent. As outside consultants come and go, the trustees’ obligation will be to determine what recommendations and suggested policies serve our community best. They must remember that many of the Allegheny decisions were based on expert consultant advice.

The governance of Eastern Maine Healthcare will be redefined at some point. There will be a new Eastern Maine Health Systems board which will be the superboard, with supreme governance over EMMC, Acadia and other EMH affiliates. The bylaws of EMHS have not been finalized. It is in the interest of this community that EMHS governance be firmly linked to this community. Keeping the incorporators as the ultimate source of authority is the most effective means to this end.

Daniel E. Cassidy, M.D. of Bangor is an Eastern Maine Healthcare incorporator.


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