The Governing Board’s Role in Assessing Possible Hospital Closure or Downsizing

The article discusses the financial distress, amplified by the COVID-19 pandemic, that some hospitals and health systems are experiencing. As a result, there is a need for the boards of these organizations to assess the current financial strain on the enterprise, and to develop targeted action items on the basis of its findings. 

The article suggests two possible board approaches, depending on the organization’s current status:

• For many hospitals, it is beneficial to develop a detailed management plan that could be deployed in the event of future financial distress, which lays out various possible action items that include, but are not limited to, facility downsizing or closure. 
• For a smaller group of hospitals, it may be necessary to evaluate on a more immediate basis possible facility downsizing or closure. This requires active board oversight, and should be undertaken with the appropriate level of organization, attention, and resources given the complexity of this action.

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