Healthcare Issues & Trends

Advice & Insights for healthcare's Leaders & HR Professionals

Hospital Boards Need to Worry and Watch regarding New Jersey Property Tax Threat

Posted on August 30, 2016 by James A. Rice, Ph.D., FACHE

Can you afford to pay millions in property tax next year?

Eager to tap into a new source of cash to lower New Jersey's notoriously high property taxes, local officials have filed tax appeals challenging the tax-exempt status of 35 nonprofit hospitals.  [1]

The litigation continues to pile up in response to last year's precedent-setting  tax court ruling and settlement which required Morristown Medical Center  to pay Morristown $15.5 million in lieu of property taxes. The judge found the hospital operated in many ways like a for-profit entity and should share the cost of public safety and other municipal services.

Two of the 35 cases have been settled already, resulting in additional revenue for the city of Elizabeth and Edison Township.

In March — after 15 municipalities filed tax appeals — Gov. Chris Christie called on local officials to support a two-year freeze on new litigation while a commission devised a solution that would preserve the tax-exempt status of the 58 nonprofit in the state but require hospital make contributions in lieu of taxes.

Christie needs the Legislature to pass a bill creating the commission, however. Assemblyman Herb Conaway (D-Burlington), chairman of the Assembly Health Committee, introduced the bill, but Assembly Speaker Vincent Prieto has opposed it, saying the matter could not wait two years to be resolved.


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Board Work Blog

Posted on August 24, 2016 by James A. Rice, Ph.D., FACHE


Recent discussions with board chairpersons have surfaced 5 important challenges they anticipate for the coming year:

1.    How much to invest in IT systems?

2.    How to support your CEO, but also hold them accountable for stretch performance goals?

3.    How to earn respect among physicians as colleagues in a shared journey for population health gains?

4.    How to set and manage goals for our board performance improvement?

5.    How to recognize and reward board work?

Each challenge will be the focus of a future “Board Work Blog

As you wait to see the next Blog, ask your CEO and fellow board members, “What are our 5 most challenging issues we are likely to be dealing with in the coming year?

  • Perhaps a merger or strategic alliance?
  • Perhaps a partnership with a local public health department or a Federally Qualified Health Center (FQHC) to better serve high risk and poor populations in your region?
  • Perhaps a whistle blower law suit on your physician contracting or patient billing arrangements?

As you sort through your board’s priorities, you might want to listen to the insights from John Leifer in Trustee Magazine about board work style[1]. He recently shared 5 very sensible imperatives for board chairpersons as they seek to lead boards prepare for the challenges of the future:

1. Communications: establish a culture of trust among hospital leaders to speal the truth and challenge conventional wisdom.

2. Culture: encourage an open study of the organization's core values, and engage in conversations about how to support such virtues as:

  • Fairness
  • Equity
  • Dignity
  • Humility
  • Mutual respect
  • Passion for excellence

3.  Value-Drive: study perceived value of all services to the community, and then map actions to optimize quality, accessibility and efficiency.

4.  Environment: study market needs and pressures and make sure plans are aligned with these requirements.

5.  Governance: continuously improve your process, and cultivate board members that define and follow a personal plan that furthers the organization's mission.


[1] Leifer, John, Trustee, July-August 2016, page 24

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Top Business Leaders Report on Commonsense Governance Principals

Posted on August 4, 2016 by James A. Rice, Ph.D., FACHE


Recently, a committee of top business and financial leaders, including Warren Buffett, CEO of Berkshire Hathaway, and Jamie Dimon, CEO of JPMorgan Chase & Co., issued the Commonsense Corporate Governance Principles. These principles support strong independent boards, transparency, and long-term value creation, and in the process, build increased shareholder confidence. They will likely spark an important dialogue between boards and stakeholders about improving corporate governance practices.

As you and your board leaders review these principles, have a conversation at your next board meeting about how you might want to enhance your policies or code of conduct to continuously strengthen your governance model?!

All the best in your journey to accountable care and accountable governance.


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