Corporate and philanthropic models of hospital governance: a taxonomic evaluation

We assess the theoretical integrity and practical utility of the corporate-philanthropic governance typology frequently invoked in debates about the appropriate form of governance for nonprofit hospitals operating in increasingly competitive health care environments.

Data were obtained from a 1985 national mailed survey of nonprofit hospitals conducted by the American Hospital Association (AHA) and the Hospital Research and Educational Trust (HRET).

A sample 1,577 nonprofit community hospitals were selected for study. Representativeness was assessed by comparing the sample with the population of non-profit community hospitals on the dimensions of bed size, ownership type, urban-rural location, multihospital system membership, and census region.

Measurement of governance types was based on hospital governance attributes conforming to those cited in the literature as distinguishing corporate from philanthropic models and classified into six central dimensions of governance: (1) size, (2) committee structure and activity, (3) board member selection, (4) board composition, (5) CEO power and influence, and (6) bylaws and activities.

Cluster analysis and ANCOVA indicated that hospital board forms adhered only partially to corporate and philanthropic governance models. Further, board forms varied systematically by specific organizational and environmental conditions. Boards exhibiting more corporate governance forms were more likely to be large, privately owned, urban, and operating in competitive markets than were hospitals showing more philanthropic governance forms.

Findings suggest that the corporate-philanthropic governance distinction must be seen as an ideal rather than an actual depiction of hospital governance forms. Implications for health care governance are discussed.