What must be done to ensure that this Governance Council does not run afoul of the hospital’s parent organization’s decision-making processes, whether centralized or decentralized?

Appointed to your position nearly 18 months ago, you are the CEO of a 400-bed tertiary acute care hospital operating in a very competitive urban environment. The for-profit hospital is part of a large, wellmanaged, well-financed, performance-driven, and hospital-centric organization operating in multiple states. Management of this organization and its affiliated hospitals and other operations, including ambulatory surgical centers, employed physician clinics, and ancillary support services (e.g., revenue cycle, supply chain, pharmacy) is achieved via a balance of centralized and decentralized management and decision-making. As such, affiliated hospitals have access to and are expected to follow best practices and there is a healthy degree of standardization in terms of the management of clinical services and operations. This balance often depends on the location of each hospital and its service area market dynamics. More specifically, in areas where the organization operates multiple hospitals as a network, usually larger metropolitan areas, there is a greater tendency toward centralized management and decision-
making. Your hospital finds itself in such a situation. The hospital’s parent organization does not own or control a health insurance company, nor is one of its primary strategies to employ physicians.
Within your hospital’s service area, several other well-regarded and effective competitor hospitals exist. As the number two competitor among them, your hospital’s market share has for several years fluctuated between 29 percent and 31 percent, while your hospital’s network market share in the broader market service area hovers around 19 percent. Notwithstanding relatively robust population growth in the broader market service area (though largely stagnant population growth in your hospital’s particular service area), market shares among all hospitals have been remarkably stable in recent years.