Hospital Governance, Performance Objectives, and Organizational Form

38 Pages Posted: 31 Mar 2001 Last revised: 30 Nov 2022

See all articles by Leslie Eldenburg

Leslie Eldenburg

University of Arizona

Benjamin E. Hermalin

University of California, Berkeley; European Corporate Governance Institute (ECGI)

Michael S. Weisbach

Ohio State University (OSU) - Department of Finance; National Bureau of Economic Research (NBER)

Marta Wosinska

Harvard Business School

Multiple version iconThere are 3 versions of this paper

Date Written: April 2001

Abstract

This paper studies the governance of a sample of California hospitals. We document a number of empirical relations about hospital governance: The composition of the board of directors varies systematically across ownership types; poor performance and low levels of uncompensated care increase board turnover, with this sensitivity varying by organizational type. Poor performance, high administrative costs, and high uncompensated care lead to higher CEO turnover, with these effects again varying across different organizational types. Overall, these results are consistent with the view that boards of directors of hospitals of different organizational forms are substantially different, and that these boards make decisions to maximize different objective functions.

Suggested Citation

Eldenburg, Leslie G. and Hermalin, Benjamin E. and Weisbach, Michael S. and Wosinska, Marta, Hospital Governance, Performance Objectives, and Organizational Form (April 2001). NBER Working Paper No. w8201, Available at SSRN: https://ssrn.com/abstract=265296

Leslie G. Eldenburg (Contact Author)

University of Arizona ( email )

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Benjamin E. Hermalin

University of California, Berkeley ( email )

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European Corporate Governance Institute (ECGI)

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Michael S. Weisbach

Ohio State University (OSU) - Department of Finance ( email )

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National Bureau of Economic Research (NBER)

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Marta Wosinska

Harvard Business School ( email )

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