The Healthcare Governance Committee was created by industry associations to promote compliance with the 2017 Healthcare Governance Code ("Code"). Stakeholders can ask the Governance Committee to review whether behaviors of healthcare organizations are in compliance with the Code. Since its inception in 2007, the Governance Committee had a limited remit, but seems to have recently traded it in for a much broader remit. This is undesirable. Oversight of good governance is an internal matter; the Governance Committee has no role in it. Read more about it in this blog.
author: Klaas Meersma
Upon request, the Governance Committee reviews a healthcare organization's compliance with the Code. If the Governance Committee judges that the Code has not been properly applied, the healthcare organization must adjust its governance in accordance with the committee's ruling. Based on that terms of reference, the Governance Committee ruled on, for example, conflicts of interest, the relationship between the board of directors and the supervisory board, and the composition and functioning of both bodies.
The Governance Commission is receiving an increasing number of review requests. From 2011 to 2015, the Governance Commission published seven rulings; from 2016 to 2019, there were 11.
Until recently, in accordance with the Code, the Governance Committee interpreted its role in a limited way. The Governance Committee kept a sharp eye on the boundaries with property law disputes, and tested board actions only against the Code. Whether a decision made by the board of a healthcare organization was good, or whether better decisions might have been possible, was never the subject of review. Nor, in my observation, is there any need for this. The assessment of management actions is an internal matter and rests with the supervisory board, and the Governance Committee has always respected that division of roles. In a recent ruling, that restraint seems to have been abandoned.
What was the case study? An oral surgeon had developed an anomalous method of recording and declaring treatments. Fraud, according to his two colleagues. These informed the board of directors about their colleague's fraud. Then one escalation followed another. The oral surgeons quarreled among themselves. The two non-fraudulent oral surgeons get into an argument with the board of directors. They had launched their own investigation into the nature and extent of their colleague's fraud, which the board said violated patient privacy. At some point, the fraudulent oral surgeon was still at work, while his two colleagues were outside with a denial of access.
All this led to a barrage of legal proceedings on multiple fronts and multiple forums(here, here, here, here, here). When all the legal wrangling was over, all the oral surgeons were out on the street. An issue that probably left everyone on the sidelines shaking their heads.
The two non-fraudulent oral surgeons then submitted the dispute to the Governance Committee. That in itself is strange, because all the judges who could intervene-an interlocutory court, the Enterprise Chamber of the Amsterdam Court of Appeal, the Health Care Scheids Court-had already ruled. The outcome - all oral surgeons out on the street - was already fixed; there was nothing the Governance Committee could do to change that.
Moreover, the ruling of the Governance Committee shows that the review request was rather unspecified. The entire dispute with all its events was raised by the two oral surgeons, we read. Further on, we also read that the requesting oral surgeons did not explicitly state which principles of the Code were violated. End of case, I would think. There is nothing the Governance Committee can do with this. However, the Governance Committee sums it up by saying that the applicants "present the question of whether there has been good governance."
But does the Governance Committee have the authority to judge in a general sense whether something produces good governance? That is up to the board itself, which is overseen by the supervisory board. If that leads to violations of the law, then they can go to court. If the Code is violated, then the Governance Committee can pass judgment on that.
The general question "is there good governance?" is not one for the Governance Committee to answer. In doing so, the Governance Committee is not reviewing conduct against the Code, but is reviewing board conduct. The Governance Committee is like a referee who must blow the whistle for a violation; it is not there to pass judgment on the quality of the soccer game.
The judgment of the Governance Commission also leads to nothing. The judgment does not have the legal force of an arbitral award or binding opinion. The hospital that receives the opinion can do nothing further with it.
Bringing this case to trial in this manner has opened the hunting season. All governance actions can be made the subject of review by the Governance Committee by anyone with an interest in them, free of charge. Not satisfied with a reorganization? Disagree with the healthcare institution's choice of profile? Against the merger with another institution? Against the closure of a location? At the Governance Commission one finds a hearing, at least if this becomes the new line.
Managing a healthcare organization is complicated enough. The Governance Committee's line of making the quality of those actions the subject of a noncommittal retrospective assessment is, in my opinion, undesirable but also unwise.
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