Hospital governance and market share.

The organizational structure of nonprofit hospitals has remained fixed while hospital technology and financing have changed. Caught between competitive pressures from other organizations not subject to the same government regulation to contain costs and assure quality, and physician resistance to organizational change, hospital boards lack the capacity to make effective and timely decisions to retain market share. Governing structure will have to change for nonprofit hospitals to sustain growth and to achieve adequate standards of cost containment, quality assurance, and patient service. Accountability for hospital performance should be maintained through increased control of the governing board by physicians and managers. The board and medical official should agree on the nature of the latter's accountability for departmental or committee performance. The board should hold medical officials so accountable. If regulators, trustees, physicians, and managers are genuinely interested in sustaining the nonprofit hospital's share of the market, they must pay more attention to the structure and function of hospital governance, so that boards can more effectively respond to market opportunities, contain costs, and assure quality.