Governing Board

Handbook

The People We Serve . .

The People We are
Suggested Citation

U.S. Department of Health and Human Services, Health Resources and Services Administration, Bureau of

Primary Health Care, Bethesda, Maryland. Governing Board Handbook. 2000.

This document was developed and produced by Circle solutions, Inc. under contracts No. 213-92-0009 and No. 240-94-0044 to the Bureau of

Primary Health care, Health Resources and Services Administration, Public Health Service, U.S. Department of Health and Human Services. Judy A.

Cramer and Cathie O’Donnell, coauthors; and Debbie Anchor, Lindi Copeland, and Debbara Micale, desktop publishers.
i ■

TABLE OF CONTENTS

Introduction .................................................................................. v

Module 1. Building an Effective Board........................................ 1

Why Have a Board? ............................................................... 1

To Govern ......................................................................... 1

To Link with the Community ........................................... 2

It’s Required ..................................................................... 2

What is a Board Supposed to Do? ........................................ 3

1. Define and Preserve the Mission of

the Organization ................................................................ 4

The Mission Statement ..................................................... 4

Understand, Commit to, and Clarify the Mission ............ 5

A Word About Goals and Objectives................................ 5

2. Make Policy........................................................................ 6

Consistent with Mission? ................................................. 6

Formulating Policy ........................................................... 7

Operations ........................................................................ 8

Personnel .......................................................................... 8

Finances ............................................................................ 9

Provision of Services/Quality Assurance ......................... 9

Implementing Policy ...................................................... 10

3. Safeguard the Assets of the Center ................................ 11

External Rules and Regulations ..................................... 11

Articles of Incorporation and Bylaws ............................ 11

Center Finances .............................................................. 12

The Budget ..................................................................... 13

The Audit ........................................................................ 14

Danger Signs .................................................................. 14

4. Select, Evaluate, and Support the CEO.......................... 16

Selecting the CEO .......................................................... 16

Evaluating the CEO ........................................................ 17

Supporting the CEO ....................................................... 18

5. Monitor and Evaluate

Center and Board Performance ...................................... 19

Evaluating the Center’s Performance ............................. 19

Evaluating the Board ...................................................... 20
■ ii

6. Plan for the Long-Range

Future of the Center......................................................... 23

Strategic Planning Defined ............................................. 23

Why Is Planning Important? .......................................... 24

Getting the Commitment for Planning ........................... 24

Who Should Plan? .......................................................... 25

The Planning Process ..................................................... 25

Short-Term Planning ...................................................... 29

What Is the Job of a

Member of a Health Center Board? .................................... 31

The Duty of Care ............................................................ 33

The Duty of Loyalty ....................................................... 33

The Duty of Obedience .................................................. 34

Module 2. Come on Board!........................................................ 37

Internal Relationships and Functions.................................. 37

Board Organization ........................................................ 38

Board Size—

Are We Too Big or Too Small? ...................................... 39

Board Eligibility—

Who Can Become a Board Member? ............................. 39

Board Selection—What Determines

How We Choose Board Members? ................................ 41

Terms—How Long Should

Board Members Serve? .................................................. 44

Officers of the Board—

Who Are They and What Do They Do? ......................... 46

Selecting Board Officers ................................................ 46

Board Operations............................................................ 49

Committees..................................................................... 49

Committee Membership ................................................. 50

Types of Committees ...................................................... 50

Committees Report to the Board .................................... 51

Committees Have No Power or Authority ..................... 52

Board Meetings—Where the Action Is! ......................... 53

Getting Ready ................................................................. 53

Following the Rules ....................................................... 54

Making Motions and Voting ........................................... 54
iii ■

The Board and the Outside World ....................................... 56

The Community Connection .......................................... 57

The Community of Users ............................................... 57

Public Relations.............................................................. 57

Community Fundraising................................................. 58

The “Other Provider” Community ................................. 58

Relationships with Health Center Staff .......................... 60

Relationships with Health Center Funders ..................... 61

Funders and Their Rules................................................. 61

Educating/Informing Public Policymakers .................... 63

External Advisors ................................................................. 64

Appendices

Appendix A: Resource List .................................................. 65

Appendix B: History of the Health Center Model ............... 69

Appendix C: Chronology of the

Community Health Center Movement ........... 81
■ iv
v ■

INTRODUCTION

The Governing Board Handbook has been prepared for the Health

Resources and Services Administration’s Bureau of Primary Health

Care (BPHC)-supported health center governing board members.

This handbook has been designed as an orientation tool to assist

new members to understand the structure and responsibilities of a

governing board. It also describes the characteristics of health

center governing boards that make them unique. We hope that new

and experienced board members will find the Governing Board

Handbook a useful tool.

This Handbook is organized into two modules. Module 1 explains

the purpose and responsibilities of a governing board. It also

explains the three major duties of a member of a governing board.

Module II is an overview of how board operations relate to the

day-to-day functions of a health center.

These materials can be used by members of any health center

governing board, but the focus is the specific characteristics and

issues that face federally supported health center governing boards.

The generic terms health center or center have been chosen to

include any BPHC-funded or -supported health center or health

care program. Also, while these terms may be interchangeable, the

administrator or executive director will be referred to as the chief

executive officer.

Training and technical assistance and consultation for governing

board members of BPHC-supported health centers is made available by BPHC through a variety of resources including State/

regional primary care associations, national organizations, and

Federal staff. The “Resources List” following Module 2 of the

handbook lists national, regional, and state-level associations and

other resources that may help to address specific issues that concern your health center.
■ vi

A “History of the Community Health Center Model” is included as

an appendix to this Handbook. This appendix has been provided

for those who may be interested in additional background information on the community health center movement in the United

States.

Our thanks to the Executive Director and board members of Southern Jersey Family Medical Centers, Inc. and John Troidl (trainer)

for allowing us to observe first-hand one of the Centers’ governing

board training sessions; and Sheila Ray of Ray & Associates, who

provided additional writing, review, and expertise. We also thank

the following individuals for serving on the advisory committee to

provide direction, review, and suggestions during the development

of the Governing Board Handbook: Mickey Goodson, chair; John

Cafazza and Paula McLellan, members.
1 ■

module 1.

BUILDING AN EFFECTIVE BOARD

Being a board member is a serious responsibility. At times,

board members may feel slightly overwhelmed. But how the

board goes about doing its business does not need to be

complicated—especially if the board, as a whole, and its

individual members, understand their responsibilities and act

based on that understanding.

Because the board as a whole has roles, responsibilities, and

authority that are unique and different from the roles, responsibilities, and authority of each individual member, we

have organized this module to make those differences clear.

In the sections that follow, we will briefly discuss why

boards are necessary and then present an in-depth discussion

of the functions of the nonprofit board, and finally, summarize the roles and responsibilities that are required of each

board member.

WHY HAVE A BOARD?

Your health center (center) has a board to:

■ “Govern” the center

■ Serve as a link with the community

■ Comply with State and Federal laws.

TO GOVERN

The board “governs”—it provides leadership and guides the center

in doing what it was intended to do. This requires an understanding

of the mission, ensuring (preserving and developing) programs and

BOARDS EXIST TO:

■ Govern

■ Link with the

community
■ 2

services to fulfill that mission. It also requires providing a vision

—a direction for the organization. Thus, the board governs the

present and plans for the future in a way that preserves the

mission of the center.

TO LINK WITH THE COMMUNITY

The board also serves a dual role in linking the center and the

community. The first part of its linkage role is to serve as the

voice of the community, representing the community and its

needs to the center. The center has been established to meet a

specific need—to provide primary care services to the

community’s medically underserved and vulnerable residents.

The board’s job is to represent the community in assuring that the

center maintains the appropriate management and staff necessary

to provide the scope of services needed for that particular community. The second part of the board’s linkage role requires the

board to promote the center and its mission to the community.

IT’S REQUIRED

Although the center is a nonprofit organization, it is still a business. It has been incorporated and granted tax-exempt status by

the State and the Federal Government to fulfill a need. A nonprofit business has rules regarding how it is managed. One of

those rules is that it must establish and maintain a board to make

sure that the organization continues to operate and to do what it

was set up to do.
3 ■

WHAT IS A BOARD

SUPPOSED TO DO?

How a board goes about governing and ensuring that the

organization serves the community involves a variety of

activities. Some boards have responsibility for overseeing

the operation of large health center networks that provide a

full range of medical, dental, nursing, social support services, and training programs to an extensive and diverse

population. The operation of these centers is quite complex

and involves managing many clinical, administrative, and

support staff as well as overseeing considerable assets.

Because of the complexity of this type of business, individual board members tend to be more distanced from the

daily operation of the health center.

Some boards, on the other hand, may govern a center that

has only one site, limited staff, and serves a smaller, more

homogeneous client population. Members of these boards

may have a closer and more “hands on” knowledge of the

operation of the center.

Because of these differences, these boards may vary in their

approach to “governing.” But their basic responsibilities (or

duties) remain the same. These responsibilities are presented

here as a series of six elements that build on and support

each other each other:

BASIC RESPONSIBILITIES

OF A NONPROFIT BOARD

Define and Preserve

the Mission of the

Organization

Make Policy

Safeguard the Assets of

the Center

Select, Evaluate, and

Support the CEO

Monitor and Evaluate

Center and Board

Performance

Plan for the LongRange Future of the

Center
■ 4

■ 1 DEFINE AND PRESERVE THE

MISSION OF THE ORGANIZATION

Everyone, including each board

member, center staff, chief executive officer (CEO), and the community, should understand why

the center exists and what it hopes

to accomplish. This is a cornerstone responsibility of the

board—to make sure that everyone associated with the center

understands exactly why the

center is in existence, and why it

is important to ensure that the

center continues to operate. In

other words, what is the mission

(business) of the center?

The Mission Statement

A written mission statement is a public declaration of the center’s

guiding principles or values. It lets everyone know what the center

stands for, its purpose, and the community to be served.

The mission statement should:

■ Explain why the center was established and whom it serves

■ Depict the services provided

■ Illustrate what makes the center special or different—why

clients should use its services

■ Point to a clear direction for future center activities and

priorities and form the basis for future planning

■ Be “flexible”—provide for changes in the community and

the overall health care marketplace

■ Be widely distributed and/or visible to center board, staff,

and clients

■ Be simply worded, brief, and to the point.

MEASURE ACTIVITIES

AGAINST MISSION

STATEMENT

Is the board

accomplishing the

mission? If not, why?

Is the CEO

accomplishing the

mission? If not, why?

The mission of

Merced Family Health

Centers, Inc. is to improve

the health status of our

patients by providing

quality, managed primary

health care services to

people in the communities

we serve regardless of

language, financial, or

cultural barriers.

Merced Family Health Centers, Inc.

Merced, CA
5 ■

The mission statement is the basis for all board responsibilities

and activities. It serves as the “Gold Standard”—the measure by

which the board constantly assesses how well it and the CEO are

doing their jobs.

Understand, Commit to, and Clarify the Mission

Most new members join a board of a health center that has been in

operation for a period of time. In these situations, the center will

probably already have a mission statement. It is still the board’s

responsibility, however, to understand and commit to that mission.

The board should also periodically review the mission statement

to ensure that its principles are being fulfilled and that it is still

appropriate and relevant.

In other words, it is the board’s job to continually clarify (or

define) the mission of the center. The board should also

understand that all corporate goals and objectives should be based

on or “flow out of” the mission statement. Because the health care

environment is constantly changing, it is the board’s job to be

attuned to those changes and to ensure that the health center’s

goals and objectives remain dynamic and sensitive to the

marketplace in which it operates.

A Word About Goals and Objectives

There is nothing complicated or mysterious about goals and

objectives. Just as in sports, goals are the ends—where we want

to be or what ultimately we want to achieve—whether that goal is

to win a marathon or to improve access to health services for

underserved and vulnerable populations. Objectives are the steps

we take to achieve those goals. For example, to finish and win a

marathon, a runner must train to cover the distance within a

certain period of time. The runner’s first step (i.e., objective) in

MEASURE THE MISSION

STATEMENT AGAINST

NEEDS AND GOALS

Are the needs/goals of the

owners (i.e., the community) reflected in the

mission statement?

If not, why?

Should the mission

statement be revised

If so, why?

ACTIVITIES AND MISSION—

Do current and proposed

programs and services

help accomplish the

center’s mission and

purpose?
■ 6

reaching that goal may be to finish a marathon within 4 hours after 6

months of training. For a health center, the first step (objective) in

reaching a program goal of improving access to maternal and child

health services may be to obtain $300,000 in new funds for perinatal

screenings by January of the following year.

In each case, the goals are long range, concisely worded, and based

on what the individual (in the first example) or the board (in the

second example) wants to achieve. Again, think of goals as the

“ends” in what needs to be accomplished, and objectives as the

“means” in describing how the goals will be met. Goals are accomplished by specific objectives that are measurable, realistic, and

consider the resources available to the health center.

■ To Summarize: It is the board’s job to ensure that the

mission statement is well crafted and relevant, and that its principles

are being fulfilled through realistic goals and objectives. If this has

been accomplished, then the board’s job of making policy will be

much easier.

■ 2 MAKE POLICY

Another primary responsibility of the board is to make and monitor

policy. Policies furnish a framework for future decision making—

they determine a general course of action to follow in similar or

recurring situations. Policies should ensure uniformity and consistency of action throughout the organization. Policies must be consistent with the overall mission, goals, and objectives of the center,

with each other, and with applicable laws and regulations.

Consistent with Mission?

Whenever it initiates or changes policy, or takes any kind of action

related to the center, the board should first review the mission

statement and ask: “Is this policy (or decision) in keeping with the

mission statement? If not, why?”

BOARDS MAKE

POLICY ABOUT:

■ Operations

■ Personnel

Management

■ Fiscal Management

■ Clinical

Management and

Quality Assurance
7 ■

If the proposed policy or action is not in keeping with the stated

mission, the board must then decide: “Is this policy or action

appropriate or valid?” If the board determines that the policy or

action is indeed necessary and appropriate, but outside the existing

mission statement, then the mission statement should be amended

to reflect that change.

■ Caution: Boards should not change mission statements too

readily. It is often easier to change a mission statement than to

change policy, but not always appropriate.

Formulating Policy

It may be helpful to know why and when boards set policy:

■ To initiate action to accomplish the center’s mission

■ As a response to a changing need from within the

community

■ As a response to a directive or policy change from a

funding agency.

Boards must address policies dealing with finance and with programs. In setting policy, a good rule of thumb is: Never make

financial and programmatic decisions independently of each other!

This is often easier said than done, and boards often observe that

most of their meetings seem to be spent dealing with issues of

finance and fundraising.

The board must constantly reassess and reorder its priorities;

interpret and evaluate its policies; and modify, discard, or create

new policies to meet the changing needs of the community, of the

health center, and of its funding sources.

NEVER

Make financial and

programmatic decisions

independently of each

other!
■ 8

When governing boards of health centers formulate policy, this

action typically falls within one of four categories: operations,

personnel, finances, and provision of services/quality assurance.

Operations

The board is ultimately responsible for efficient,

effective, and sound operation of the health center.

For example, the board should establish policies

that:

■ Address the process of selection, review, and

dismissal of the CEO

■ Provide for an effective organizational

structure

■ Ensure the availability of equipment, facilities,

and personnel necessary to achieve the

center’s goals and objectives

■ Determine the scope, location(s), and availability of center services

■ Establish a process for handling and resolving

client grievances

■ Ensure that the center is operated in compliance with applicable Federal, State, and local

laws and regulations.

Personnel

The board should establish broad personnel policies

that will guide the CEO in developing a sound and

realistic personnel program that includes:

■ Selection and dismissal procedures

■ Employee compensation, including wage and

salary scales and benefit packages

■ Position descriptions and classification

■ Performance review and evaluation

procedures

■ Employee grievance procedures

■ Equal opportunity practices.

“ABC HEALTH CENTER”

Although “ABC Health Center” sees patients five

days a week, the number of patients has increased

and clients have to wait several weeks for a routine

appointment.

BOARD MAKES POLICY

The board of “ABC” sets a policy that clients should

have to wait no longer than 72 hours for a

nonemergency appointment.

CEO/STAFF IMPLEMENTS

The CEO and staff follow that policy by extending

hours of operation on certain weeknights and

adding Saturday hours.
9 ■

Finances

The board should establish policies that ensure proper administration of funds and accurate recording of the center’s financial

activities. For example, the board should:

■ Establish the center’s financial priorities

■ Institute long-range financial planning

■ Review and approve the center’s annual budget and annual

audit.

The board should also ensure the establishment of:

■ Internal control procedures

■ Purchasing policies and standards

■ Protocols for determining eligibility for services,

including criteria for partial-payment schedules

■ A billing and collection system that:

– establishes charges based on locally prevailing

charges and the health center’s costs

– adjusts or discounts charges based on a person’s

ability to pay and family size

– bills and collects from users of services and thirdparty payers, such as Medicare and Medicaid,

insurance companies, or managed care plans

– incorporates procedures for aging accounts

receivable

– includes procedures for writing off bad debts.

Provision of Services/Quality Assurance

The center’s board is obligated to make sure that the CEO and staff

make continuing efforts to maintain and improve the quality of

care that the center provides. Thus, the board should ensure that:

■ The CEO hires a competent, qualified Medical Director

who will supervise other clinical staff

■ Generally accepted principles of quality health care are

developed and followed

■ An internal quality assurance program provides for the

periodic review of the center’s performance in meeting the

health needs of the community.
■ 10

The board’s responsibility doesn’t end with making policy. Once

formulated, policy implementation must be reviewed and

approved by the board.

Implementing Policy

The board is responsible for making sure that the center’s CEO

implements the approved policy—and when that policy is

implemented, the board’s job is to support the CEO and the staff

in their efforts.

For example, in response to a newly enacted law or regulation,

the board sets (makes) a policy to ensure that the center conforms to the new regulation. The CEO and staff act on (implement) that policy by purchasing new equipment, adding a

capital improvement, or developing new or revised procedures

for the center’s operations. The board sustains (supports) the

policy by approving funds for capital improvements, if required.

The board has the job of making policy while the center’s CEO

and staff have the job of implementing policy. However, it is

important for the board to be ready to accept ideas for policy

change based on program needs put forth by the staff through

the CEO.

Note: It is the CEO and the staff who have first-hand knowledge of the daily operation of the center. In fact, it is not uncommon for staff to recognize a particular service need within the

community—even before the community representatives on the

board are fully aware of such a need.

THE BOARD’S RESPONSIBILITY DOESN’T END WITH

MAKING POLICY. ONCE

FORMULATED, POLICY

IMPLEMENTATION MUST BE

REVIEWED AND APPROVED

BY THE BOARD.
11 ■

■ 3 SAFEGUARD THE ASSETS OF

THE CENTER

The center’s board is placed in a position of trust by the community and funding sources to protect the center’s assets, ensure

that the center’s income is managed properly, and preserve the

center’s mission. In other words, board has a fiduciary responsibility for management of the center.

External Rules and Regulations

There are various “external” rules that must be followed because

the center is a nonprofit business chartered by the State. There

are also other external regulations that must be followed because

the center is tax exempt and therefore must comply with IRS

rules and regulations and most likely receives a combination of

Federal, State, and private funding, which carries numerous

legal requirements. As part of its fiduciary responsibility, the

board is required to understand and follow all of these rules and

regulations.

Articles of Incorporation and Bylaws

Every nonprofit business, including a health center, also has

“internal” rules and regulations regarding how the center and the

board conduct business. These organizational and legal

documents—the articles of incorporation and bylaws, are the

ground rules that the board is required to follow when it governs

(makes policy).

The articles of incorporation (sometimes called the corporate

charter) usually contain a statement about why the center was

founded, a list of the center’s legal powers and authority, and

any limits on that power or authority. It is very important that the

board understand that once the articles are approved by the

State, the center cannot undertake any activities that are described in the articles of confederation.

FIDUCIARY

A person who acts as a

trustee. A person acts in a

fiduciary capacity when

the business transacted or

the money or property

handled is not for that

person’s own benefit but

for the benefit of another.
■ 12

Bylaws are detailed rules about how an organization will be

governed. They deal with procedure rather than with guiding

principles. They generally include:

■ How and when board meetings will be conducted

■ How board members and officers will be selected

■ Duties of corporate officers

■ Committee structure

■ Description of the board’s relationship with the center’s

CEO and staff.

(See Module 2 for a detailed discussion of these “internal

rules and regulations.)

Center Finances

As part of its fiduciary responsibility to safeguard the center’s

assets and resources, the board continually must address issues

of finance. The board should be clear about the ground rules

and its role in the financial management of the center. The

board’s job is to:

■ Make policies that clearly define

– sources of revenue and categories of expenditures in the budget

– the process for adjusting to meet the actual

financial situation as the year progresses

■ Leave the details to management (as long as those

decisions are within the boundaries set by board

policy)

■ Monitor the status of income and expenditures against

the policies made by the board regarding the annual

budget

■ Compare the actual financial condition of the center

against the policies originally set by the board

■ Plan for needed revenue sources and plan and budget

for capital improvements.

If the board operates within this framework—that is, the board

makes policy and the CEO acts on that policy—the board’s

ability to govern will not become fragmented or disorganized

and its ability to protect center assets will be preserved.

SAFEGUARDING FINANCES

■ Understand where the

money is coming from

■ Understand how the

money is being spent

■ Understand how to

plan for needed

services and growth
13 ■

The Budget

The board must pay careful attention to the budget. The board

must review and approve the annual budget (usually prepared by

the center’s CEO and staff). Approval of the annual budget is one

of the most significant policy decisions that the board will make

and it sets in motion a series of programmatic, personnel, and

fiscal decisions.

The board should think of the budget as the center’s business

plan—how it will spend the center’s revenues to pay for the

services that it provides—and it should regularly compare the

real state of finances (called actuals) to what was planned for in

the budget when it was first presented and approved (called

projections). While the audit (see below) may fulfill a legal

requirement and help protect against financial mismanagement, it

may not reveal problems until a year after they happen.1 A

budget, if monitored regularly (monthly, if possible), will help

identify problems as they occur.

Because it is responsible for monitoring the center’s finances, a

goal for any board should be to assure that at least one board

member has financial expertise. It is also important to keep in

mind that the board can only truly monitor budget performance if

it has understandable, accurate, and timely information. The

board, therefore, has the right to receive monthly fiscal status

reports that include a comparison of budgeted to actual expenditures, balance sheet, and a forecast of future income and expenditures, which, ideally, should be reviewed by the Finance Committee before presentation to the full board.

1

 Health centers receiving more than $300,000 in Federal funds are required to undergo

an annual audit.
■ 14

The Audit

An audit does more than fulfill a legal requirement. It is probably

the best way that the board can protect the center’s financial management. That is why the audit must be conducted by an independent CPA or accounting firm (and comply with Federal requirements). A change of CPA firm every few years or, at a minimum,

rebidding the audit, is recommended.

It is a good idea that the CEO/CFO meet with the auditors before

the audit actually begins. It is also a good idea for a designated

committee (typically, the Audit or Finance Committee) to meet with

the auditor at least as soon as the audit is completed, but before it is

in its final form, to attempt to resolve any audit issues. Finally, it is

a good idea for all board members to receive the final report in time

to review it before meeting with the firm’s representative to discuss

the results of the audit.

Danger Signs

Now that we have discussed what the board needs to know to make

sure that the center’s finances are healthy, let’s discuss how the

board should learn to spot trouble.

Income Is ▼: Every nonprofit has certain critical sources of income

that it counts on. The most common revenue streams for many

health centers are Federal and State grants or contracts, reimbursement from insurers, and collection of patient fees. It is the board’s

job to pay close attention to any changes in the law, policies, or

fiscal situation of its funding sources, especially those that will have

an obvious impact on the availability or amount of funding.

SPOTTING TROUBLE

■ Income Sources ▼

■ Key Expenditures ▲
15 ■

Some Expenditures Are ▲: Boards also need to carefully

watch the effect of increased costs in certain areas—especially

in personnel (staff salaries and benefits) and contractual services—these two areas represent the bulk of the center’s expenditures. Another area to watch is increases in miscellaneous

expense account spending or past due bills. Again, by regularly

monitoring the budget, board members can see if expenditures

(actuals) are greater or less than what was budgeted. It is then

the board’s responsibility to ask why.

■ To Summarize: What we have covered so far (elements

1–3): A health center board is responsible for ensuring preservation of the center’s mission, directing its actions (setting policy),

and making sure that the center’s assets are safe and healthy

(fiduciary responsibility). Now let’s move on to elements 4–6.
■ 16

■ 4 SELECT, EVALUATE, AND

SUPPORT THE CEO

Because the CEO translates board policy into action, the choice of

CEO is one of the board’s most important responsibilities. In

addition to hiring the CEO to manage the day-to-day operations of

the health center, the board is also responsible for making sure that

the CEO fulfills the requirements of this position.

Selecting the CEO

The CEO will have a significant impact on the center’s development and effectiveness. Therefore, recruiting and selecting the

CEO is extremely important. Although other individuals may have

some input into helping define the requirements for this position,

the board is responsible for the actual selection of the CEO. Therefore, the board should establish and conduct a careful search

process. Before beginning that process, the board should:

■ Make a list of the center’s “pluses” and “minuses.” (What

does the center have to offer? What are its drawbacks?)

■ Decide exactly what the board is looking for in a CEO

(e.g., the characteristics, skills, and credentials necessary to

do the job):

– as a base from which to develop a set of questions to

guide the interview process

– as a guide against which to measure each candidate.

■ Prepare a clear and concise position description with

defined roles and responsibilities. Including differences in

the job of the board, the CEO, and the staff.

■ Provide a competitive compensation package that will

attract well-qualified candidates.

■ Develop a written list of priorities for the incoming CEO

by establishing clear objectives for at least the first year of

the CEO’s employment.

When these tasks have been completed, the board can begin the

search process. The search may be extensive or quite narrow—

there may be a suitable candidate from within the center’s staff, or
17 ■

there may be a clear choice from outside. It is important to consider

all qualified candidates so that the board can select the best “fit”

from candidates with a diverse range of expertise and perspectives.

Paying close attention to the list of desired qualifications, the board

should make the first cut and then start to schedule interviews.

It is important to support the interview with as much information as

possible. After the interview, the board (or search committee) should

contact the candidate’s professional references and validate credentials.

Information from references should be reviewed and discussed by the

entire board, as it is the responsibility of the entire board to select and

hire the CEO.

Evaluating the CEO

The board has placed considerable trust and responsibility in the

CEO, and it is up to the board to ensure that the CEO is successfully fulfilling the requirements of the position. Usually this evaluation (performance review) takes place every year, at the time the

CEO’s contract is renewed or at the anniversary date of employment. The board should treat the annual evaluation with the same

importance as the first time the board hired the CEO.

No one is especially comfortable being evaluated, and most of us

are not very comfortable doing the evaluating. It helps to remember

that evaluation can be very positive—especially if the CEO and the

board agree about the purpose of the performance review and how

it will be conducted. Evaluations offer an opportunity to provide the

employee with specific guidance on areas for improvement, and to

discuss professional growth issues and training needs. The CEO’s

performance should be tied directly to his/her position description

and overall role and responsibilities, for example:

■ Community relations: How well the CEO works with

the board and other community organizations to ensure that

current services are needed and used by the center’s clients.

■ Financial management: Budgeting and accounting for

all revenues and expenditures.

THE ROLE OF THE CEO

To manage, direct, and

monitor health center

operations and patient

care functions. These

activities must comply

with Federal and State

requirements and the

policies established by

the board.
■ 18

■ Grants management: Being accountable to public and

private sources for the funds that they provide to the center.

■ Personnel administration: Creating a spirit of teamwork that is the basis for employees’ individual and group

efforts.

■ Program development: Planning, implementing, and

evaluating the center’s programs in meeting the needs of

the community while complying with board policy and the

center’s mission.

Although the CEO should have a formal performance review

formally each year, the board should know how and what the CEO

is doing on an ongoing basis. The board should make sure that

interim steps are taken to improve upon deficiencies (if any) noted

in the evaluation, and the board should identify and deal with

problems as they occur. Most importantly, feedback (both positive

and negative) should not be stored and delivered only during the

annual review. Therefore, many boards have found that it is sound

business practice to receive a CEO report (written or verbal) at

each board meeting.

Supporting the CEO

It is important that open communication be maintained between

the board and the CEO—an essential element in a positive working

relationship between the two parties.

Once the CEO is hired, the board should support his/her decisions.

Therefore, the board should give the CEO clear guidance about

policies to be carried out as well as overall expectations. This

guidance should be ongoing. But its directives have been made

clear, the board should refrain from interfering in the daily operation of the health center and should trust the CEO’s ability to

manage. If problems arise, the board should follow accepted

procedures within the parameters of the center’s bylaws.

The board is also responsible for providing the CEO with the

resources to carry out policy. For example, if it establishes a policy

CEO PERFORMANCE

The center’s current

operations and future are

tied directly to how well

the CEO performs!
19 ■

that requires capital expenditures for building improvements or

equipment purchase, the board should be prepared to allocate the

funds necessary to pay for those improvements.

 It is important that the board support the CEO to effectively manage the center. Everyone has his/her own strengths, and the CEO is

no exception. The CEO may not fulfill all duties and functions of

the position equally well. It is the board’s responsibility to work

with the CEO to identify other center staff whose skills complement

those of the CEO, and identify areas for skill building.

■ 5 MONITOR AND EVALUATE

CENTER AND BOARD PERFORMANCE

It is important that the board periodically review both the Center’s

performance and its own performance. The purpose of evaluating

and monitoring performance is to decide if that performance is

appropriate and, if not, to take corrective action.

Evaluating the Center’s Performance

Remember that the center was established to achieve something: an

end, a result, a mission. It follows, then, that the board cannot

evaluate its own performance or the performance of the CEO

without assessing how well the center is doing what it was set up to

do. This leads us back to that all important mission statement. The

best way to see if the center is succeeding is to see how it measures

up against the current mission statement.

Determine how well that mission is being achieved. Certainly, some

things are getting done; some programs are delivering primary

health care services to the community. But how effective are those

programs? Are they reaching everyone they were set up to reach?

What is the quality of those programs and services? What is the cost

of those programs and services? Would the needs of the community

be better served by revising, replacing, or even discarding some of

these programs or services?

HEALTH CENTER

PERFORMANCE STANDARDS

■ Mission/goals/objectives

■ Budget, financial plan,

business plan

■ U.S. DHHS Program

Expectations for

Community and Migrant

Health Centers

■ Various clinical measures

(e.g., decrease in infant

mortality rate)

■ Past performance

■ Patient satisfaction

surveys

■ Client focus groups (i.e.,

small groups of 8 to 10

patients gathered to

discuss—or focus on—

key issues)
■ 20

These are not easy questions to answer. Governing a health center

is not an exact science—it’s okay that some of these answers are

more subjective than objective. There are, however, some standards against which the center’s performance can be measured.

Some of these standards are “internal,” such as how well the center

has achieved its goals and objectives. Others are “external”—they

have been developed by outside funding sources, such as the State

or Federal Government, as qualitative measures of performance.

Whatever the source, these standards all ask the same two basic

questions: “Is the health center achieving its mission?” and “Is the

health center providing appropriate and feasible services?” Moreover, these standards all have one objective—to benefit the users of

the health center’s services.

It is also important to keep in mind that without evaluating the

center’s performance the board would have little basis for assessing the performance of the CEO. Furthermore, it would be extremely difficult to plan realistically—either for the short- or longterm future of the center. There would be no basis for making

program decisions, and the board would find it difficult to ensure

its own credibility within the community. It is the latter issue that

we address next when we discuss the board’s responsibility to

review its own performance.

Evaluating the Board

It’s a good idea to have a written policy that the board will evaluate

itself at least once a year. The evaluation should focus on the

board’s strengths and weaknesses. It should be written and retained

so that board members can review it as part of the next year’s

evaluation.
21 ■

How the board measures its own performance does not need to be

a lengthy or complicated process. In addition to comments from

individual board members (as well as the CEO and other center

staff), the board should take a thorough look at:

■ How well the board meets its responsibilities

Are board responsibilities and goals and objectives reviewed at least annually? Do the goals and objectives

reflect the center’s mission? Are they realistic? Do the

board’s decisions have a positive impact on the community? Does the board maintain linkages with the community? Are fundraising activities successful?

■ Meeting minutes for the year

The minutes, written records of board meetings, are a

useful tool for helping the board evaluate itself. Minutes

will provide records of discussions and details on decisions

made by the board. The minutes will also answer certain

questions that speak directly to board operations: Does the

board meet monthly in accordance with regulations? Is

there a quorum at each meeting? Are appropriate committee

reports and CEO reports regularly provided?

■ The board’s interaction with the CEO

Has it been positive? Has it been effective? Have there

been problems? What were they? What caused those

problems? How were they resolved?

■ The dynamics of board members’ interaction with

each other

Do one or two members dominate meetings? If so, why? Is

there tension between certain members? If so, why? How is

it resolved? Do members understand and follow basic

parliamentary procedures? Does the board chairperson

effectively keep discussion on track?
■ 22

■ Time set aside for skill building and training

Do new board members receive initial orientation and

training? Does the board receive training and skill building

in areas of weakness identified through the evaluation? An

active board will attempt to stay current by taking advantage of training opportunities provided at national and State

conferences such as those conducted by State and regional

primary care associations, the National Association of

Community Health Centers, and the National Rural Health

Association.

■ How well the board sets goals for the

upcoming year

Are the goals realistic? Do they reflect the center’s mission? Are goals and objectives formally developed as part

of a 3- to 5-year strategic plan?

Don’t confuse board goals with organization goals. Board goals

deal with how the board operates (e.g., to increase attendance at

meetings or to secure specific expertise needed on the board).

These kinds of goals are internal—they deal with how the board

functions. Organizational goals, on the other hand, are much

broader (e.g., to provide certain services). They are included in the

center’s long-range strategic plan. And that moves us forward to

the next, and final, element in our discussion of the board’s

responsibilities.

SEVERAL RESOURCES ARE

AVAILABLE TO PROVIDE

GENERIC AS WELL AS

SPECIFIC TRAINING TO

BOARDS. THESE INCLUDE:

■ State and regional

primary care

associations

■ National technical

assistance contracts

available through the

Federal funding agency

■ Local resources such as

community colleges,

universities, hospitals

■ Organizations such as

the National Center for

Nonprofit Boards
23 ■

■ 6 PLAN FOR THE LONG-RANGE

FUTURE OF THE CENTER

By this point, the board has defined a clear mission; set policies

consistent with that mission; ensured that center assets are safeguarded, available, and being appropriately spent; hired a capable

CEO to oversee the daily

operations of the center; and

established procedures to

monitor and evaluate the

board’s and the center’s

performance. The board can

now turn its attention to

planning.

Although opinions differ as to

how planning should be

defined and interpreted or

designed and executed, a

general consensus exists that

there is a need for both longterm or strategic planning as

well as short-range planning. It is useful to differentiate between

long-term (strategic) planning and short-term planning. A longterm or strategic plan is a dynamic process, one that continually

guides the board and center management toward meeting specific

goals that are tied to the center’s overall mission. The short-range

(or annual) plan is derived from the strategic plan.

Strategic Planning Defined

Strategic planning, broad-based and conceptual in nature, deals

with the future in terms of long-term objectives and integrated

programs for accomplishing these objectives. The future can be

defined as a period of time from 3 to 5 years.

“Would you tell me, please, which

way I ought to go from here?”

“That depends a good deal on

where you want to get to,”

said the cat.

“I don’t much care where—,”

said Alice.

“Then it doesn’t matter

which way you go,”

said the cat.

Alice in Wonderland

—Lewis Carroll
■ 24

The strategic plan also addresses critical issues facing the organization for the future and is often seen as planning in the face of

obstacles or competition. Strategic planning requires setting

clear goals and objectives and reaching these objectives within

specific timeframes.

This approach to planning emphasizes the process itself, which

is characterized by self- examination, setting direction and

priorities, making difficult choices, implementing, monitoring,

and evaluating.

Why Is Planning Important?

The center’s board operates in an economic, social, and political

environment. As such, planning is critical. Through planning, the

board can give the center the means to establish and sustain its

mission, determine policies and procedures, highlight the need

for—and ways to obtain—funding, market the center’s services,

deal with changes in leadership, and make timely responses to

legal and political mandates.

Getting the Commitment for Planning

The first and most critical aspect of planning is getting commitment from the board, the center’s CEO, and the staff to engage

in the planning process. It is vital to the center’s success that all

who are responsible for both long-term and short-term planning

are identified and their commitment to the planning process is

obtained.

PLANNING IS:

■ A “change agent” that

establishes the need

for change when

merited and the

parameters by which

change will occur

■ The process whereby

you figure out where

the center is, where

you want it to go, and

how you intend to get

it there

■ Hard work, which

requires careful

organization, specific

activities, and

schedules

■ Feedback that tells

employees how well

they are doing and

how they can do better

■ An opportunity to

eliminate less

productive activities

and undertake new

ones

■ A valid management

function
25 ■

Who Should Plan?

Planning is an on going process. Boards, administrators, and senior

staff must participate. When we talk about strategic planning, we

are talking about a 3- to 5-year vision for the center. That’s the

board’s responsibility. But it is imperative to include the CEO and

other members of the center’s management team. Collectively,

these senior staff usually possess the expertise and information

needed to develop a reasonable course of action for the center and

an implementation plan to manage it. Planning is a team effort, and

all members of the team must “buy into” that plan.

The Planning Process

The planning process consists of six, sequential stages:

Stage 1: Mission Formulation

Stage 2: Organizational Assessment

Stage 3: Developing Objectives

Stage 4: Developing Action Plans

Stage 5: Implementation

Stage 6: Evaluation

Each of these stages is essential to the center’s ability to accomplish its mission.

Stage I: Mission Formulation

The center’s mission statement is the starting point for the plan. As

we discussed earlier, the mission statement forms the foundation

for all other strategic elements. As mentioned earlier, the mission

statement should describe the values or beliefs that will shape the

center’s operations. While developing the mission statement may

be a difficult and time-consuming task, it is critical because the

mission statement will chart the center’s future direction and

establish the basis for decision-making.

PLANNING IS NOT:

■ Magic; it involves hard

work and careful

direction—it does not

just happen

■ A search for obvious or

convenient answers

■ Simply a written plan

that is relegated to a

dusty bookshelf

■ Something incomprehensible or to be feared

■ Merely jumping through

a hoop every few years

to satisfy a regulatory

agency or funding agent
■ 26

Values. Values are the beliefs that shape the center and behavior

of the board, CEO, and staff. Typically, an organization’s values

are organized and codified into a “philosophy of doing business.”

These organizational values explain how the center approaches its

work, how it is managed internally, and how it relates to the community. Thus, values play an important role by influencing administrative decisions as well as employee actions.

Purpose of the Center. A clear mission statement:

■ Defines the purpose of the center

■ Allows the board, CEO, and staff to see themselves as part

of a worthwhile enterprise

■ Enables the board, CEO, and staff to see how they can

improve the community through the work of the center

The success of the center will, to a large extent, depend on the

clarity of the purpose statement.

Stage 2: Organizational Assessment

An important question facing the board is whether the center has

the ability to accomplish its mission effectively. Therefore, during

the organizational assessment stage of the planning process, special

attention should be paid to collecting the following data that will

influence the center’s capabilities:

Critical Issues. The organizational assessment should include

information about critical issues both inside and outside the center

that might impact the strategic plan. A critical issue is defined as a

difficulty that has significant influence on the way the center

functions or on its ability to achieve its goals. Thus, a critical issue

can be almost anything– funding, current Federal/State statutes and

regulations, the center’s policies and procedures, new technologies,

politics, or community acceptance. The planning team needs to

develop an issues agenda and prioritize any issues that the planning

team believes will have the most impact on the center over the next

3 to 5 years.
27 ■

Strengths, Weaknesses, Opportunities, and Threats.

The planning team should identify and rank the center’s strengths

and weaknesses, as well as its future opportunities and threats.

Thus, the planning team should be able to identify strengths that

can be utilized in accomplishing the center’s mission, as well as

isolate weaknesses that need to be avoided or managed. New

opportunities and impending threats should be examined because

the board is likely to find that much of the center’s future may be

dictated by forces outside its own structure. Therefore, no plans

should be developed without studying these external forces.

Stage 3: Developing Objectives

At this stage, the planning team should ask, “What do we want the

center to accomplish, and how do we measure our success or

failure?” When developing objectives, the planning team should

examine what is expected of the center from its users of services.

The planning team should then compare those objectives with the

information gathered about critical issues and the strengths, weaknesses, opportunities, and threats facing the center. The team

should attempt to develop specific actions to manage critical issues

by building on strengths, overcoming weaknesses, taking advantage of opportunities, and blocking threats.

If there is substantial discrepancy between the center’s objectives

and the capacity to achieve them, the planning team should reevaluate these objectives and rework the plan, until the gap between the objectives and the capacity to achieve them is minimized. The center’s board, CEO, and staff also may want to revisit

any discrepancies during annual planning sessions (short-term

planning).

Stage 4: Developing Action Plans

After objectives have been established, the planning team should

identify the proposed ways in which each objective might be met.

This effort should include analyzing the cost benefit of each

objective and selecting specific strategies that are most likely to

achieve the objective.

OBJECTIVES

What do we want the

center to accomplish,

and how do we

measure our success

or failure?
■ 28

The action planning phase could be delegated to various members

of the center’s board, CEO, or staff. Delegating these tasks also

will help reinforce commitment to the plan and allow staff to “buy

into” the planning process. The action plans should then be reviewed by the board, who then can identify any gaps in the various

plans, determine how any gaps can be closed, and decide what

impact, if any, the gaps might have on implementation of the

strategic plan.

Stage 5: Implementation

During this stage, the plan is handed to the CEO and center staff to

implement to achieve the required results. The true test of the

overall action plan’s implementation and effectiveness is whether

center staff use it in everyday decision-making.

By this time, the board has been involved in every stage of the

strategic planning process. It is now important for the bard to voice

its commitment to the center’s strategic plan and demonstrate this

commitment by dedicating the resources necessary to make the

strategic plan a success.

During the implementation stage, the center’s CEO should submit

periodic reports to the board about the center’s progress in

achieving strategic objectives. The implementation stage also

requires evaluating the action plan and making necessary changes

to specific strategies to ensure that objectives are being met and the

center’s mission is accomplished.
29 ■

Stage 6: Evaluation

The decision to engage in the planning process and to develop and

implement specific objective for the center involves substantial

time and resources. The board, CEO, center staff, and the community have a right to know how well the center is working. They

also need to know how to improve center operations and services

to the community. Therefore, the evaluation stage should not be

overlooked.

While an outside, independent evaluation may be preferable,

much can be gained from self-evaluation. Even a very simple

evaluation strategy can help ensure that the center continues to

meet the community’s needs and that it is responsive to changes

both within the organization and in the external environment.

Evaluation should be ongoing throughout the implementation of

the plan. The evaluation strategy should include five major

components:

■ Defining the center’s goals and objectives

■ Detailing the center’s history

■ Defining the center’s services

■ Describing the impact and outcomes of the center’s

accomplishments and services

■ Summarizing the center’s accomplishments and providing

recommendations for change

The evaluation will serve to identify successful strategies, as well

as strategies, that many need to be modified to ensure that all

objectives are met.

Short-Term Planning

Today, most boards participate in annual planning sessions or

retreats. These retreats, which usually last from 1 to 2 days, are

opportunities for the board and senior management staff to celebrate their accomplishments over the past year, reassess goals

and objectives, and determine if any redirection is necessary.

WHY EVALUATE?

Even a very simple

evaluation strategy can

help ensure that the center

continues to meet the

community’s needs.
■ 30

This may be the first time that the board and management staff

have come together to discuss and agree about what is most

important to do and what can’t be done. Not everybody involved

in planning will agree on what should be done. Some participants, for instance, will want to aim the center in one direction

while others will want to aim it in another. Even if participants

agree on a direction, they may not agree on how to get there.

Some may plead for a wide variety of services, while others may

argue to provide fewer services, but in more depth. Don’t be

discouraged. This is typical. To move things along and come to

closure—not necessarily unanimous agreement—you may want

to utilize the services of a trained facilitator who will help move

the planning process along.

Everyone should come out of the planning meeting with a sense

of belonging to a team. And everyone should know where they

want the center to go and be determined to get it there. This will

keep the board from getting “side-tracked” in the upcoming year.

■ CONCLUSION

Planning can be exciting, challenging, and also one of the most

rewarding parts of board membership. Planning is also a continuous process; it is important to realize that both strategic and

short-term planning are required throughout the life of the center.

Often, participants in the planning processes get bogged down

and lose sight of planning’s purpose. Keeping planning simple

and consistent, with reasonable expectations, will ensure success.

Special emphasis should be placed on reminding all of those

involved in the planning process that both strategic and shortterm plans are meant to serve as a framework for action in

creating the center’s future direction.

PLANNING HELPS BUILD

CONSENSUS, BUT

Not everybody involved

in planning will agree

on what should be

done.
31 ■

WHAT IS THE JOB OF A MEMBER OF A

HEALTH CENTER BOARD?

At this point, you may be thinking: “Finally! Isn’t this the whole

purpose of this Handbook—to be sure that I understand what my

responsibilities are as a health center board member?” Yes, you are

correct. But far too often, health center boards (and ultimately the

health center’s entire future) run into trouble if the roles and

responsibilities of the board as a whole and of individual board

members aren’t clearly spelled out. It is potentially disastrous to

jump into a discussion of what is expected of a board member

without dealing with the very real distinction between what the

board can and should do and what the individual board member

can and should do.

The responsibilities of the individual board member and those of

the board as a whole should complement each other. Sometimes,

they may even seem to overlap. But they are fundamentally different. Board members as individuals have no special privileges or

authority; the board must meet formally to make decisions or set

policy. Individual board members, however, are expected to meet

standards of personal conduct that are higher than those usually

expected of other types of volunteers.

It is a good idea for the center to have a clear statement of what it

expects from its board members, such as a written position description for board members. (See the sample job description for a

health center board member.)

Board member responsibilities should relate directly to the center’s

organizational needs and circumstances. A board member position

description can help greatly in recruiting—it makes it clear what is

expected before the new member accepts the position. It can also

assist the board or nominating committee as it reviews the performance of individuals who are eligible for reappointment.

EVERY MEMBER OF A

NONPROFIT BOARD OWES:

■ The Duty of Care

■ The Duty of Loyalty

■ The Duty of Obedience
■ 32

As is the case with discussing the role of a nonprofit board as a

whole, a discussion of the role of the individual board member can

be as detailed as we want it to be. But there are three “givens” that

form the basis for board member responsibilities.

Job Description of a

Health Center Board Member

DUTIES AND RESPONSIBILITIES OF

INDIVIDUAL BOARD MEMBERS

■ To put the interest of the health center above any personal

or other business interest

■ To maintain the confidentiality of board information

■ To attend board meetings regularly and participate actively

■ To serve on at least one committee

■ To review information and data provided to the board and

make informed decisions

■ To exercise reasonable business judgment in the conduct

of board business

■ To participate actively in board issues by critiquing reports

and providing innovative resolutions to problems

■ To assure that the needs and interest of the community are

represented in plans and decisions regarding services to be

offered by the health center

REQUIRED KNOWLEDGE AND SKILLS OF

INDIVIDUAL BOARD MEMBERS

■ Understanding of the concept and operation of a health

center

■ Ability to read and understand standard financial

statements

■ Ability to work with others on the board and in a

community setting

■ Training and/or experience in one or more of the following

areas is desirable:

– management – health care delivery

– community affairs – financial management

– marketing/public relations – employee relations

– personnel management – law
33 ■

Every member of a nonprofit board owes:

■ The Duty of Care

■ The Duty of Loyalty

■ The Duty of Obedience.

These are traditional terms that continue to be used to describe

the standards of conduct and attention a board member must

meet in carrying out his/her responsibilities to the organization.

If the board member fully understands and carries out these

duties, he/she will fulfill the responsibilities as a board member

as well as act as a positive and energizing influence on the board

as a whole.

THE DUTY OF CARE

The duty of care means that the board member is expected to

exercise the same level of judgment that any other competent

and prudent person would exercise in a similar situation. No one

expects the board member to never make mistakes or to never

take risks. What is expected is that the board member should be

reasonably careful when making decisions. This is sometimes

called the “business judgment rule.” It is the board member’s

responsibility to seek any needed training (e.g., regarding

regulations, program expectations, and “good management”

practices in the area of governance) so that each member is

equipped with the knowledge needed for such decision making.

THE DUTY OF LOYALTY

This is the fundamental duty to be faithful to the organization. It

means that the board member owes undivided allegiance to the

center when making decisions affecting the center. In other

words, the board member can never use information obtained in

his/her position as a board member for personal gain. Trouble

usually occurs when a board member uses center property for

personal use or when a board member takes advantage of an

opportunity available to the center. Board members can have

business dealings with the center. But expect that those dealings

CONFLICT OF INTEREST

A conflict between the

private interest and

public obligations of a

person in an official

position.
■ 34

will be subjected to close scrutiny. There should always be full

disclosure of the board member’s involvement in the business, and

the transaction should always be in the best interest of the center.

Any discussion of duty of loyalty needs to include the subject of

conflict of interest. The center must develop a specific written

policy regarding how to handle a potential conflict of interest.

That policy will be based on the various funding sources’ rules and

regulations. These regulations may be quite specific. For example,

federally funded centers are clearly prohibited from hiring

relatives of board members. Regulations may also prohibit the

center from doing business with any member of the board or with

relatives of board members. The written policy should be reviewed

and approved by the board and reflected in its bylaws, as well as

in the corporate policy manual.

Most States and the Federal Government have explicit regulations regarding conflict of interest. In such cases, it is important that the conflict be disclosed by the board member and that

the member refrain from voting on the issue. The meeting

minutes should reflect such noted conflict and the member’s

abstention from the vote.

THE DUTY OF OBEDIENCE

The board member is expected to be faithful to the center’s mission. Board members also have a legal obligation to voice their

own opinions about how the board should accomplish the center’s

mission and ensure that any objections to a board action are

recorded in the board minutes.2 However, once the board makes a

decision or sets policy, the individual board member is not permitted to act in any way that is inconsistent with that policy or the

goals of the center. It is important to keep in mind that a nonprofit

health center relies heavily on the public trust. The public has a

right to expect that each board member will never compromise or

violate that trust.

2 As a board member, if you fail to record your objection to a board action in the board

minutes, you could be held liable for the consequences of board actions with which you

disagreed.

OBEDIENCE MEANS:

Once the board makes a

decision or sets policy, the

individual board member is

not permitted to act in any

way that is inconsistent with

that policy or the goals of

the center.
35 ■

The list in the following box provides examples from each of

the three categories of duty. This is an extensive list of do’s

and don’ts. But it is important to remember that if you are

careful, loyal, and obedient, the do’s and don’ts will take care

of themselves.

HEALTH CENTER BOARD MEMBERS DO’S

■ Do know the center’s mission, purpose, and goals as well

as its programs and services

■ Do get to know the center’s strengths and weaknesses

■ Do pitch in enthusiastically and willingly

■ Do make sure you have all the information before

expressing an opinion or a judgment

■ Do get acquainted with the other board members and the

Center’s CEO and staff

■ Do come to meetings—and come prepared to participate

■ Do ask questions

■ Do support the majority even if you disagree

■ Do support the CEO and staff, and understand that they

are operating with limited resources

■ Do avoid any possible conflict of interest

■ Do maintain a sense of fairness, ethics, and personal

integrity

■ Do understand the Center’s financial statement and help

the board plan for future revenue and expenses

HEALTH CENTER BOARD MEMBERS DON’TS

■ Don’t lose your sense of humor

■ Don’t speak for the board, unless authorized to do so

■ Don’t ask the CEO or staff for special favors

Even when your term on the board ends, you can continue to lend

your by being an effective ambassador for the center.

We are now at the point where we are ready to go on to explore

some issues that deal with how the board operates and how it

relates to the community.
■ 36
37 ■

module 2.

COME ON BOARD!

Let’s review what has been covered so far. In Module 1, we

examined the reasons for having a board, your role as a

board member, and the responsibilities of the board as a

whole. In this module, we focus on “nuts and bolts” issues:

how the board is organized and how it actually operates

internally, as a major factor in overall functioning of the

health center, and externally, in relation to the community

and to sources of funding.

INTERNAL RELATIONSHIPS

AND FUNCTIONS

Running a health center can be a complex endeavor. Like any

business, if the health center is operating efficiently, it will be able

to provide the type and quality of services that its users expect. As

a result, users are likely to be satisfied and continue to rely on the

center for health care. Providing efficient, effective quality services

is also critical to meeting the performance expectations of the

center’s funders.

It is important to remember that the health center’s effectiveness is

directly tied to how well the board operates. That does not mean

that the board should be involved in the day-to-day operation of

the center. What we do mean is that if the board is well organized

and operating efficiently, it will be able to do its job successfully—

that is, make policies that will ensure that the center can continue

to meet the needs of the community it serves.
■ 38

Time spent learning and applying the information presented in

this module can increase board teamwork and effectiveness.

These basic operational issues are important. Once the board

understands these issues establishes procedures to deal with

them, the board can then get on with one of its biggest jobs—

planning (see Block 6 of Module 1).

There are many details involved in governing a health center in

particular, board meetings and the mechanics of board work.

New board members should be quickly oriented to these activities so that each board member is comfortable about participating

in the board’s work and has the knowledge to carry out his/her

legal and fiduciary responsibilities.

In the next section, we address the board’s internal rules and

regulations—the ABCs of how the board is organized and does

its work. All board members are legally responsible for knowing

these rules and regulations and for abiding by them. The board is

not expected to guess at what these rules are—most of the issues

that we discuss likely are included in the center’s bylaws. In fact,

each new board member should receive a copy of the bylaws as

soon as he/she comes on board. Also, the Health Resources and

Services Administration’s (HRSA) Bureau of Primary Health

Care (BPHC) may provide additional documents that cover many

of these issues. Other useful documents and assistance may be

available from the organizations included on the Resources List

following this module.

BOARD ORGANIZATION

When we talk about board organization, we mean how the board

is put together. We will look at key structural elements of any

health center board and answer some basic questions such as:

■ What determines the size of the board?

■ Are there rules about who can be a member?

■ How long should members serve?

■ What are the typical responsibilities of “officers”?
39 ■

Every board may operate a little differently, but all have to address

certain basic issues. For health centers that receive Federal support,

some of these issues, (e.g., “Who is on the board?” and “How large

is the board?”) are mandated by specific rules and regulations.

Other issues, such as terms of office, are not regulated. However,

good management practice requires that procedures be established

and followed for each of these areas.

Board Size—Are We Too Big

or Too Small?

When a board is determining its size, it should make sure that it is

large enough to do its job but small enough to be manageable. The

board should have at least enough members to:

■ Represent all segments of the community

■ Represent all areas of expertise required

■ Complete the work needed without overloading some or all

of the board members.

Keep in mind that it is easier to discuss issues and make decisions

with a small group of people, but it is equally important to be sure

that the board has the kinds of expertise it will need. Balance in

terms of size and composition must be constantly reviewed. When

boards get too large, it may be difficult to gain consensus on

important issues. A board that is too small may not be able to carry

out all of its required functions.

Board Eligibility—

Who Can Become a Board Member?

Once internal rules (i.e., bylaws) establish the size of the board, the

next step is to decide who should be on the board. Composition of

the board must reflect the community and comply with any applicable regulations.

Just as funders may have rules about board size, it is likely that

they will want to ensure that the board represents all segments of

the community. Federal regulations are intended to ensure support

by the user community—the people for whom the health center

was originally founded.

WHEN A BOARD IS DETERMINING ITS SIZE, IT SHOULD

MAKE SURE THAT IT IS

LARGE ENOUGH TO BE ABLE

TO DO ITS JOB BUT SMALL

ENOUGH TO BE MANAGEABLE. THE BOARD SHOULD

HAVE AT LEAST ENOUGH

MEMBERS TO:

■ Represent all

segments of the

community.

■ Complete the work

needed without

overloading some or

all of the board

members.

COMPOSITION OF THE

BOARD MUST REFLECT THE

COMMUNITY.
■ 40

In the following box, we have summarized requirements about

size and composition of boards of community health centers that

receive Federal funds. These requirements are meant to safeguard the founding principles of a federally supported center,

and are provided as an example of how any health center might

ensure it has a board that represents the community it serves.

They are not meant to impose quotas of any kind.

HEALTH CENTER BOARDS—FEDERAL REQUIREMENTS

■ The board must have at least 9, but no more than 25

members.

■ At least 51 percent of the board’s members must be users of

the health center.

■ Half of the remaining members of the board (49 percent or

less) cannot earn more than 10 percent of their income from

the health care industry. (Example: if the board has 10

members, then no more than 4 members may be considered

“nonusers” of the center’s services. Of those four, only two

members may earn more than 10 percent of their income

from the health care industry.)

■ The remaining members of the board (49 percent or less)

must represent the area served by the center and have

expertise in community affairs; Federal, State, and local

government; accounting; health administration; health

professions; business; finance; banking; legal affairs; trade

unions; insurance; and personnel management as well as

social services such as religion, education, and welfare.

■ Board members must reasonably represent the individuals

served by the health center in terms of demographic factors:

– ethnicity

– race

– sex

– migrant/seasonal farmworker (if the center receives

Federal migrant health grant funds)*.

■ Employees of the center and their spouses, children,

parents, or brothers or sisters (blood or marriage) cannot be

members of the board.

* Please refer to the current edition of

Program Expectations for Community and Migrant Health Centers.
41 ■

In addition to understanding the needs and viewpoints of the

community, the center’s board will need members with a variety of

skills and expertise. Though difficult to achieve for many boards,

an ideal to aim for is to have at least one member who understands

finance (although that person should never be solely responsible

for preparing, reviewing, or making decisions about budgets),

someone who has links to funding sources, someone who can help

interpret legal issues, and someone who has experience in marketing or public relations. As was the case for size, the center’s

bylaws should clearly state the rules about board composition.

To help explain some of the rules about board composition, we

have included the following sample board composition evaluation

tool, using “ABC Health Center”, a center serving migrant

farmworkers located in an area that is approximately 20 percent

African American, 30 percent Hispanic, with mixed income. Using

this composition tool, the board can see that the ideal nominee for

the next vacancy would be a female Hispanic migrant farmworker

(the center receives Federal migrant health grant funding) who is

between the ages of 50–59 and who earns below the poverty level.

Clearly it is unrealistic to expect to find a candidate that fits that

description. However, these qualifications should be considered

when it is time to fill the next board vacancy. Subsequent nominees to the “ABC Health Center” board should have experience in

as many as possible of the following areas: government, health

administration/professions, human resources, law, and marketing/

public relations.

Board Selection—What Determines How We

Choose Board Members?

In today’s environment, the skills required of health center boards

are complex and comprehensive, selection of appropriate board

members is extremely important. When the board selects new

members, all of the factors we discussed must be considered.

HEALTH CENTER BOARD

SELECTION CRITERIA

■ The health center board

member must represent

some group

characteristic of the

community being

served—namely,

ethnicity, race, gender,

age, economic status,

and migrant/seasonal

farmworker status.

■ The health center board

member should possess

some type of expertise

that is especially needed

by the center.
■ 42

The center’s bylaws should specify how to replace a board member who resigns before completing his/her term. Many boards will

ask their nominating committees and the CEO for nominations and

then hold a special vote of the full board to choose a successor to

complete the term of the resigning member.

“ABC HEALTH CENTER”

 SAMPLE BOARD COMPOSITION EALUATION TOOL

Current Ideal Req’d to

Categories Composition Composition Meet Ideal

Age

70 and over 1 1 –

60–69 2 1 (1)

50–59 – 2 2

40–49 2 2 –

30–39 2 2 –

Under 30 3 2 (1)

Sex

Female 3 6 3

Male 7 4 (3)

Race

African American

(if 20%) 2 2 –

Asian or Pacific

Islander (if < 1%) – 0–1 –

Hispanic (if 30%) 2 3 1

Native American or

Alaska Native (if 4%) 1 0–1 –

White (if 50%) 5 3–5 –

Economic Status

High 2 0–3 0

Moderate 7 4–6 (1)

Low 1 3–4 2–3

Areas of Expertise

Acctg/Finance/

Banking 3 3 –

Business 2 2 –
43 ■

Board members should always be thinking about community

residents who would make good board members. It may be a good

idea to develop a “Board Member Position Description.” This can

be a one-page summary of board member responsibilities, including estimates of time required by various committees, board meet-

 SAMPLE BOARD COMPOSITION EALUATION TOOL (CONT’D)

Current Ideal Req’d to

Categories Composition Composition Meet Ideal

Areas of Expertise (cont’d)

Community Affairs 5 5 –

Education 2 2 –

Fed./State/Local Gov’t 1 2 1

Health Administration* 2 3 1

Health Professions* 3 4–6 1-3

Human Resources 1 1 –

Insurance 3 2 (1)

Law 1 2 1

Marketing/P. R. 1 3 2

Religious Orgs. – 1 1

Union 3 3 –

Other – – –

Length of Service

Over 20 years – 0–2 –

10–20 years 1 0–2 –

5–10 years 2 2–4 –

2–5 years 5 3–8 –

less than 2 years 2 3–4 1

Clinic Users (>50%)** 4 6 or more 2

Migrant Farmworker*** 2 1 or more –

Total Board Members 10 10 –

* Federal requirements mandate that fewer than half of the non-clinic users

earn more than 10 percent of their income from the health care field.

** A majority of the board members must be individuals who are or will be

served by the health center.

*** Representation mandated by Federal requirements for migrant health

centers that receive HRSA funds.

CHOOSING NEW

BOARD MEMBERS

Every time a new member

is needed, rules regarding

board composition

continue to apply.
■ 44

ings, and other center activities. This document and the board

composition evaluation tool will be of considerable help for the

nominating committee when it comes time to fill a board vacancy.

Terms—How Long Should

Board Members Serve?

Terms refer to the length of time that board members serve. Boards

must develop their own rules about this issue. The center’s bylaws

should specify the length of a board term, and how many terms can

be served consecutively.

Many boards have found that 3 years is a reasonable term of office.

In the first year, the board member learns about the center and

becomes familiar with board operations before moving into the

next stage of active participation. During the second year, the

board member should be ready to assume a leadership position as

an officer or a committee chair. In the third year, while continuing

to actively participate in board business, the outgoing board member also helps new board members “learn the ropes.”

Except in the case of a newly established health center, it would be

impractical and potentially chaotic to have a board with all new

members at the same time. That is why most boards stagger terms

(i.e., alternate the number or percentage of board members who

may be elected each year).

It is important that the center’s bylaws deal with turnover among

board members. The rate of turnover should provide sufficient

continuity so there is familiarity with issues and effective participation (in other words, “institutional memory”)—usually by having

staggered terms. Except at startup, there should never be a board

composed of entirely new members.

One way to determine how many board members will be elected

each year is to divide the number of board members by the length

of a standard term. For example, if your center’s board has 3-year

terms, you would elect one-third of the board each year. By using

this formula, there is provision for a balance of new board members and experienced board members.

TERMS SHOULD BE

STAGGERED

Except at startup, there

should never be a board

composed of entirely new

members
45 ■

Another way that boards try to maintain balance is by limiting

the number of terms that an individual may serve. Term limits

have both positive and negative aspects. By limiting terms,

more members of the community have an opportunity to serve

on the board. Limiting terms also helps keep an individual

board member or a small group from becoming too entrenched

in doing “business as usual” or from gaining too much power.

Term limits encourage new expertise, new energy, and new and

different perspectives and ways of doing things. On the other

hand, there is a risk of losing truly dedicated members or

members with much-needed skills and talents. When deciding

whether to adopt term limits, carefully consider board needs as

well as the dynamics of the community.

Sometimes boards create special positions for ex-board members who are interested in continuing to serve in some capacity

or who have a particular area of expertise. The board may allow

for “ex-officio” members, or it may create an advisory committee of former board members. Through these special positions,

an ex-board member may continue to support the center by, for

example, serving as a “special liaison” with another community-based organization or helping raise funds. Through this

assistance, former members can apply their knowledge about

the center in dealing with ongoing, everyday issues so that

current board members can deal with more pressing issues or

crises without taking time away from strategic planning.

Boards need to encourage regular attendance at meetings and

ensure active participation by all board members. Many health

centers bylaws specify guidelines for terminating a board

member if that person misses a predetermined number of

meetings each year. Of course, there are always reasonable

exceptions, such as serious illness or injury. These situations

can be dealt with on a case-by-case basis. However, if a member consistently misses meetings, the board does not benefit

from that member’s expertise.
■ 46

Officers of the Board—Who Are They and What

Do They Do?

Board officers, especially the chairperson, must be respected by

other board members, have strong leadership skills, and be willing

to commit the time to carry out the extra duties of being a board

officer.

Selecting Board Officers

As is the case for board members, the rules for how and when

board officers are selected and term of office should be part of the

center’s bylaws. There are no set rules about selection or terms of

office, but officers are usually elected at the first or last meeting

of each year. It is important to select individuals who are leaders

and who have the skills and experience necessary to do the job

required.

Board officers play a vital role in guiding board operations, and a

position as a board officer involves a significant commitment of

time and effort as well as knowledge and leadership ability.

Although it may be flattering to be invited to be a board officer,

before accepting be sure you can devote the time and effort

necessary to doing the job.

Typically, board officers are the chairperson, the vice-chairperson,

the secretary, and the treasurer. In the next section we discuss the

responsibilities of these four positions.

Chairperson

Very early in life we learn that leaders tend to emerge in various

group settings. These individuals keep the group organized, prod

the group to move ahead, set rules for internal discipline, and try

to help the group make sound decisions. The same holds for the

center’s board. Somebody has to lead the board and maintain

order. That person is the board chairperson (sometimes referred to

as the “chair”).

ALTHOUGH IT MAY BE

FLATTERING TO BE

INVITED TO BE A BOARD

OFFICER, BEFORE

ACCEPTING BE SURE YOU

CAN DEVOTE THE TIME

AND EFFORT NECESSARY

TO DOING THE JOB.

EVERY TIME A NEW

MEMBER IS NEEDED,

RULES REGARDING

BOARD COMPOSITION

CONTINUE TO APPLY.
47 ■

The chairperson’s job is usually defined in the center’s bylaws.

Chairpersons of nonprofit boards tend to have certain roles and

responsibilities:

■ Team Builder: It is the chairperson’s job to make sure

that the board functions as more than just a group of

people. The board should work as a team, and it is the

chairperson’s responsibility to keep the team together to

reach consensus (i.e., agreement), which may involve

resolving conflicts.

■ Liaison: The chairperson is the link between the board

and the CEO. The chairperson’s job is to convey board

concerns and needs to the CEO as well as convey CEO

concerns and staff needs back to the board. The chairperson often serves as a sort of advisor or “sounding board”

for the CEO.

■ Planner: The board chairperson generally takes a lead

role in working with the health center’s CEO to plan. The

chairperson may provide input on approaches to largescale issues and relatively minor planning tasks, such as

the agenda for a board meeting.

■ Facilitator: The chairperson makes sure that all board

members have a chance to participate in discussions,

attempts to ensure that all sides of an issue are addressed

fairly, and encourages the board to take action. The chairperson makes sure that meetings begin and end on time

and that all agenda items are discussed.

■ Delegator: Depending on the bylaws, the chairperson

may be responsible for assigning tasks to the board members most appropriate to carry out these roles. Therefore,

the board chairperson is responsible for learning about

each member’s experience, skills, and interests. The

chairperson is also responsible for making sure that committees perform their jobs.

ALL BOARD MEMBERS,

INCLUDING THE CHAIRPERSON, SHOULD VIEW

THEIR ROLE AS ONE OF

FACILITATOR RATHER

THAN CONTROLLER.
■ 48

Vice-Chairperson

The board vice-chairperson is the backup for the chairperson, and

is often considered the logical successor when the chairperson’s

term expires. The vice-chairperson frequently receives certain

special assignments, such as leading a committee or taking charge

of special activities. The vice-chairperson should work closely with

the chairperson to stay abreast of all current issues and board

operations and be prepared to take over for the chairperson, if

necessary.

Secretary

The secretary is responsible for the notes (or minutes) of each

board meeting. This is an important job—minutes are legal documents; they are a record of actions, attendance, and decisions made

at the meeting.

Because all members of the board need to participate in discussing

issues and setting policy, the board secretary may not be able to

actually take the minutes of the meeting. That task may be assigned to a staff member who, in addition to taking the minutes,

safeguards them for future reference and prepares all formal board

correspondence. However, because the secretary is responsible for

the accuracy and completeness of the minutes, the secretary should

review and sign the minutes before they are forwarded to the full

board. Thus, while the secretary continues to be responsible for

maintaining the center’s historical and legal documents, other

traditional tasks may be performed by a center staff person.

Treasurer

The treasurer is responsible for making sure that adequate financial

records are kept, that accurate and timely financial reports are

delivered to the board, and that the center’s finances are audited

annually. This does not mean that the treasurer is responsible for

managing the center’s finances. That is the job of salaried staff—

the CEO, chief financial officer, business manager, or finance

director.

WHEN CONSIDERING

TERMINATING A BOARD

MEMBER, THE BOARD

MUST DO WHAT IS

BEST FOR THE

CENTER IN THE

“LONG RUN.”
49 ■

It is appropriate for the treasurer to serve as the chair of the finance

committee and help the committee review the annual and quarterly

budgets before submitting them to the full board. The treasurer

should also assist in interpreting financial reports for the board.

Now we are ready to talk about how a board actually operates—in

other words, committees and meetings.

Board Operations

When we talk about board operations, we mean how the board

does its work. Much of that work is done by committees, but

meetings with all members participating are at the heart of board

operations. Committees can conduct research and make recommendations, but a vote by the full board is needed to set policy.

Committees

A health center board deals with many complex and pressing

issues. One way to resolve these issues efficiently so that the board

can make informed decisions is to divide up the work—usually by

assigning certain issues to board committees and center staff. By

working together committees and staff study and develop recommendations to present to the full board for discussion and followup

action.

Board members should expect to serve on at least one committee—

perhaps two or three if the board has a limited number of members.

Therefore, it is important that board members understand the types

and purposes of the committees that are common to most health

centers.

Working on a committee benefits the individual board member, the

board as a whole, and the center. The member learns more about a

particular aspect of the center’s operations. The committee and the

center gain from the individual member’s expertise.

Usually, committees also present a brief review of the options

considered to the full board and explain why they were not recommended. Sometimes, the committee chair will make a brief presentation and provide more detailed information in a written report.
■ 50

This process documents that the committee has considered all facts

and options. The board is then able to reach an informed decision

faster. Committees should keep written records of their proceedings and report to the full board on a regular basis.

Committee Membership

There are no set rules about number, size, or type of committees,

although the center’s bylaws should include some guidelines about

committee structure. Well-functioning committees are often a sign

of a healthy board, but it is important to have only the number of

committees needed. When the board creates a committee, it is

advisable to have a “Committee Description”—a clear, written

charge of the committee’s responsibility, timeframe to complete the

charge (i.e., assignment), and level of authority to act on the

board’s behalf—not unlike the “Board Member Position Description” we talked about earlier.

Types of Committees

Although there could be as many committees as there are issues, it

is a good idea to keep the number of committees manageable. In

the case of boards with a limited number of members, it may be

helpful to have “committee overlap.” For example, the Executive

Committee could also serve as the Marketing Committee; or the

Finance Committee could also serve as the Planning Committee.

Committees tend to fall into three basic categories. Because these

committees probably already function within your center, it is

important that you understand their similarities and differences.

■ Standing (or Permanent) Committees: These committees function on a year-round, long-term basis. They

should be described in your center’s bylaws. They include:

executive, finance, personnel, planning, and quality assurance. Even though these committees are considered permanent, the board should conduct an annual review of each

standing committee to make sure that it continues to

perform a necessary function.

COMMITTEE ISSUES

EXAMPLE 1

The board has to make a

decision about whether to

authorize purchase of a

new furnace. The board

designates an ad hoc

committee to research

other options, such as the

feasibility and cost

implications of repairing

the furnace, and report

back to the board.

EXAMPLE 2

A certain board member’s

term will expire at the end

of the current year. The

Nominating Committee

reviews the board’s

composition requirements

and also determines gaps

in expertise. The Committee then begins to identify

community members who

might fill these gaps, and

then presents its recommendations to the board.
51 ■

■ The Executive Committee: This is a special type of

standing committee—typically it is made up of board

officers, the CEO (usually an ex-officio, non-voting member), and sometimes chairpersons of the other standing

committees. The board chairperson often chairs the executive committee.

The Executive Committee may meet to conduct critical

business that cannot wait until the next board meeting, and

it may have limited powers to act for the full board in

emergency situations. However, all Executive Committee

actions must be reviewed and approved by the full board.

Like the board chairperson, the Executive Committee often

functions as a “sounding board” for the CEO, providing

feedback and guidance as needed between meetings of the

entire board. However, the board should ensure that the

Executive Committee never takes on more responsibility

than what was originally given to it by the bylaws or by the

full board.

■ Ad Hoc (or Temporary) Committees: These committees are appointed by the board to study important issues as

they arise. Ad hoc committees have a time-limited function, and they are disbanded when they complete their

charge. Examples of ad hoc committees include audit,

CEO search, CEO evaluation, and grievance (if the latter is

not considered a responsibility of the Personnel Committee). Non-board members may be brought on to assist ad

hoc committees.

Now let’s talk about what committees can and cannot do.

Committees Report to the Board

Each committee reports to the full board. Committee reports

should summarize what the committee has learned and list recommendations for resolving specific issues.
■ 52

Although a board member may question a committee member

about an issue, the board should remember that the point of having

committees is to save time and streamline effort. If the full board

engages in lengthy and repetitious discussions of committee work,

time is wasted rather than saved. On the other hand, it is the

board’s responsibility to make policy decisions. Thus, the board

should feel free to debate committee recommendations sufficiently

to ensure that it has satisfied its obligations to the center. In short,

the board should neither re-do committee work nor “rubber stamp”

committee recommendations.

Committees Have No Power or Authority

The most important thing to keep in mind is that committees,

except perhaps the Executive Committee, in and of themselves,

have no power or authority. Their purpose is to make board operation more efficient and comprehensive. Committees are always

responsible to the full board, which sets policy based on committee

findings and recommendations.

Because committees sometimes take on work that should be

carried out by the center’s staff, board members need to understand

the boundaries of committee relationships. Just like the full board,

committee members should not interfere in the daily operation of

the health center. The committee cannot cross the line between

establishing policy and managing the center’s operations. For

example, the Personnel Committee may discuss and make recommendations concerning staff grievances, but it is the staff’s responsibility to take action. The committee (or individual board member,

for that matter) should never discuss any grievances with a staff

member outside the formal hearing process.

Now let’s talk about board meeting requirements and how to get

the most out of these meetings without wasting time.

COMMITTEES CAN:

■ Investigate/research

■ Report

■ Make recommendations

COMMITTEES CANNOT:

■ Set policy

■ Act on their own

■ Interfere with the daily

operation of the center

COMMITTEES, IN AND OF

THEMSELVES, HAVE NO

POWER OR AUTHORITY

EXCEPT WHAT IS VESTED IN

THEM BY THE BOARD.
53 ■

Board Meetings—Where the Action Is!

The meeting is the heart of board operations. It is during meetings

that the board sets policy and keeps abreast of operational issues. It

listens to reports from committee chairpersons and the CEO, CFO,

medical director, and occasionally other senior staff, who summarize problems or issues encountered since the last meeting as well

as anticipated issues or problems.

How well board meetings are conducted is a direct reflection of

how well the board is operating. Effective board meetings are more

than a gathering of members to discuss the latest topics of interest

to the health center and the community. These meetings are formal

events where decisions are made and recorded.

There are no set rules about the structure of board meetings. If

your center receives Federal funds, however, the board is required

to meet at least once a month and to maintain minutes. In some

States, nonprofit organizations are required to hold their meetings

in public. It is important that your board check with its legal

advisor about your State’s laws regarding meetings.

It is also important to point out that courts have ruled that you may

violate your responsibility as a board member by failing to attend

meetings. Even if you are not in attendance, you are liable for the

decisions made at all board meetings.

Getting Ready

The board chairperson is responsible for running the meetings and

guiding the board to make informed decisions. Each board member

is responsible not only for attending the meeting, but for being

prepared.

Board meetings require careful planning; they work best when an

agenda is prepared and distributed in advance. It is helpful if the

agenda includes time allocations for each item of business that will

be discussed. Because each item may require a different type of

action, it is also helpful if the item is labeled to indicate what

action is expected, as shown in the following sample agenda.
■ 54

Following the Rules

Board meetings are a formal process; the board should establish a

set of rules that determine how each meeting will be conducted.

Traditionally, board meetings follow Robert’s Rules of Order or

some other standard parliamentary procedures. Whether or not your

bylaws specify that meetings must be conducted according to strict

parliamentary format or in a less formal manner, those rules should

clearly set the tone for businesslike and courteous meetings that

allow for participation by all board members without letting a

discussion get out of control. No matter what rules you follow,

remember that they are there to ensure the rights of every board

member to discuss an issue and to agree and/or disagree with the

discussion.

It is a good idea for each board member to have a basic understanding of parliamentary procedures so that you can help meeting

discussions move forward. In fact, some boards provide an annual

review of parliamentary procedures.

Making Motions and Voting

A specific issue is brought before the board when a member makes a

“motion”—a formal request or proposal for the board to take action.

The member making the motion simply addresses the chairperson or

board officer presiding at the meeting and states, “I move that...”

and then states the action the member wants the board to take. For

example, “I move that we establish an ad hoc committee to study

our center’s compliance with the current guidelines regarding

Americans with Disabilities Act regulations.”

SAMPLE AGENDA

HEALTH CENTER BOARD MEETING

Time Presenter Issue Action Required

7:00 pm Treasurer Annual audit Selection of CPA firm

7:15 pm Treasurer and Chair Monthly financial Board acceptance

Finance Committee report

7:25 pm Chair, Building Building site update Pending

Committee

RULES ARE IMPORTANT

Rules ensure that every

board member has the right

to discuss an issue and to

agree/disagree with the

discussion.

MOTIONS—

THE BASIC PROCESS

■ Move (the motion)

■ Second the motion (the

support—needed to

consider the motion)

■ Restate (the

chairperson)

■ Discuss, clarify, debate

■ Vote
55 ■

Most motions require that another board member agree with the

motion by stating that they “second” the motion. Once the motion

is seconded, it is restated by the presiding officer. The board may

discuss the motion, although some motions do not require discussion. Although enough time should be allotted to discuss the

motion fully, the presiding officer and other board members should

try to keep the discussion focused and move it toward a decision—

in other words, a vote.

The basic process is:

■ Move (the motion)

■ Second the motion (the support—needed to consider the

motion)

■ Restate (the chairperson)

■ Discuss, clarify, debate

■ Vote

Once the motion has been discussed, the chairperson or another

board member will “call the question”—that is, ask that the board

vote on the motion. Board members may be asked to vote by

saying “aye” or “nay” (a voice vote), or they may vote by a show

of hands. The minutes then indicate that the motion passed,

VOTING CHOICES

■ Yes

■ No

■ Abstain (prefers

not to vote)

SOME BASIC MOTIONS

■ Amend a motion ■ Choose methods of voting

■ Withdraw a motion or second ■ Vote

■ Limit, extend, or end debate ■ Confirm a vote

■ Avoid considering an ■ Suspend the rules

improper matter temporarily

■ Raise objections ■ Reconsider or repeal a vote

■ Question facts presented ■ Reconsider a defeated vote

■ Postpone to a set time ■ Request speaker’s consent

to interrupt

■ Postpone indefinitely ■ Refer to committee

■ Table (“kill”) a motion ■ Fix an adjournment time

■ Question a quorum ■ Accept or adopt reports of

(enough members present) committees

■ Take it from the table
■ 56

whether the motion passed unanimously, or that the motion failed

to pass. Members can also vote individually—using either the “roll

call” method of calling each individual’s name and recording each

vote in the minutes or the “ballot” method of using a confidential

ballot. When the vote has been recorded, the chairperson will

announce that the motion either passed or failed and will then

move on to the next item on the agenda. If passed, the vote then

becomes policy, which involves implementation by the center staff,

or it may require some sort of followup action, either by the designated committee or the full board.

Formal rules exist to conduct meetings; but less formal use of the

above basic motions can help expedite meeting business.

If you wish to have on record how you voted on a motion, ask that

your vote (yea, nay, or abstain) be recorded in the meeting minutes.

The record of your vote may be important if someone later attempts to hold you personally liable for the board’s actions or

inactions.

In the following section, we discuss how the board operates

externally—its relationships with the “outside world.”

THE BOARD AND THE OUTSIDE WORLD

While most work will take place in meetings and committees, the

health center board also plays several important roles outside the

board room. These roles can be defined in terms of the board’s

relationships with:

■ The community

■ Health center staff

■ Funding agencies.

Understanding what is involved in each of these relationships is

critical for positive and productive board operations—in fact, the

future success and even existence of the health center may depend

on how well the board understands its role in fostering and supporting these relationships.

THE BOARD’S ROLES CAN BE

DEFINED IN TERMS OF ITS

RELATIONSHIPS WITH:

■ The community

■ Health center staff

■ Funding agencies
57 ■

THE COMMUNITY CONNECTION

This relationship is the most important relationship required by

the center’s board. When we speak of the health center “community” we really mean two things:

■ The actual “user” population of the health center

■ Other health and social service organizations and

providers within the same general geographic area or

neighboring areas.

The Community of Users

In the first part of Module 1, we pointed out that the reason for

having a board is to make sure that the health center provides

services to meet the needs of its users. To do this, the board must

actively communicate with the community and respond to the

needs of the community with health center programs.

The board has another role as well. It represents the health center

to the community. So, while the board has a responsibility to

maintain its link with the community to understand needs and

gather information, it also has a responsibility to serve as an

advocate for the health center and promote center programs and

services within the community. In other words, the board serves

as a public relations arm of the center, and each board member is

an unofficial, or sometimes official, spokesperson for the health

center. The role of spokesperson is closely tied to the duty of

loyalty discussed in Module 1.

Public Relations

Public relations does not have to be complicated, or even very

time consuming. It can mean speaking to civic groups; talking

informally with members of the community about the health

center’s programs and services; or using the media to promote the

health center through news releases, articles, and letters to the

editor. In other words, the board is using public relations to

“reaffirm” the health center’s mission to the public and to hear

back from the community if that mission is not in keeping with

current community needs.

THE ROLE OF

SPOKESPERSON IS

CLOSELY TIED TO THE

DUTY OF LOYALTY.
■ 58

Community Fundraising

Another part of the board’s relationship with the community is to

act as fundraiser for the center. Like the rest of us, most board

members find it uncomfortable to ask for money. It is important to

remember, though, that when its income begins to dwindle, the

center has two options—cut programs or raise money. It should be

clear which is the preferred option. Cutting programs can jeopardize the center. Finding funds will not only maintain the center,

these funds can help ensure its position in a changing environment.

It is also logical to expect that board members should be the

center’s fundraisers. The board is viewed as a group of volunteers

truly dedicated to the center. Some board members begin their

fundraising efforts close to home—they may be able to contribute

personal funds to the center, as well as their time. Other board

members may not be in a financial position to contribute. Regardless, board members have a responsibility to actively support the

center’s fundraising efforts such as:

■ Annual campaigns, such as direct mail, telephone calls,

and personal contacts

■ Special events, such as dinners or open houses

■ Capital campaigns for specially designated purchases or

projects, such as an addition to a clinic site

■ Planned gifts, such as bequests or endowments.

No matter what the fundraising activity, the board members may

be asked to provide lists of personal friends, corporate contacts,

professional associates, and organizations to solicit. The board also

should offer to make solicitation calls on behalf of the center. A

team effort spells successful fundraising. Coordinate fundraising

with the full board and the CEO.

The “Other Provider” Community

The center’s success in providing relevant services, especially in

an era of limited resources and complex health and social problems, depends on its success in developing and maintaining linkages with other service providers in the same catchment area.

A TEAM EFFORT SPELLS

SUCCESSFUL FUNDRAISING.

COORDINATE FUNDRAISING

WITH THE FULL BOARD AND

THE CEO.
59 ■

Since health care needs in communities served by health centers

are extensive and cannot be addressed by any one provider, it is

imperative that your health center be an active participant in your

community’s overall health system by collaborating with other

providers to identify and address health care needs. To ensure that

the health center is an integral and active part of your community’s

health care and human service delivery system, the center must

foster linkages and participate in consortia and task forces dealing

with health care issues in the current marketplace.

The board has an obligation to foster and support these linkages.

For example, before the board sets a policy that the center will

provide primary health care services to persons with HIV infection,

it must work with the CEO to find out what types of services are

being offered by other providers, such as the United Way, community religious organizations, and the area health department. Once

these other services are identified, the board can decide to help the

CEO establish contacts with those agencies. For instance, a board

member may also sit on the board of the local United Way, have a

colleague who is affiliated with the health department, or be a

member of a local religious group that provides home visits and

meals to persons with HIV infection.

These types of relationships provide a basis for collaboration and

capacity-sharing within a community. While it is the CEO’s responsibility to “formalize” these networks, the board is often the

critical link to other community service providers.

Collaboration is pivotal to the health center’s success, especially in

today’s marketplace. It is clear that in a managed care environment, the center’s users are likely to have more options available to

them as other health care entities establish themselves in areas that

have traditionally “belonged” to health centers.

THINGS TO KEEP IN MIND

■ Fully understand the

board’s position on

important issues so

that you are able to

explain and support

that position.

■ You speak only for

yourself—not for the

full board, unless you

have been authorized

to do so.

■ Make no promises.

You have no power as

an individual; therefore,

you cannot promise

that the board will take

a specific action on an

issue.

■ Know the board’s

policy about

communicating with

the media.

■ Listen to what the

community has to say

and be sure to channel

any complaints or

compliments through

the board to the

CEO—do not deal

directly with staff.
■ 60

Today’s competitive environment underscores the need for stronger, more enlightened boards. Boards must fully understand that a

health center’s success depends on its ability to develop both

“horizontal” (provide primary care services parallel to the center’s)

and “vertical” (complementary services such as inpatient, specialty, and subspecialty care) linkages.

These are challenging times; they also are exciting times for health

centers and for their boards. The board’s challenge lies in maintaining the integrity of the center’s mission. The board also has an

exciting opportunity to broaden and enhance the range of services

that the center currently provides.

Relationships with Health Center Staff

There is no doubt that an open and collegial working relationship

between the board and the CEO is key to the health center’s success. As we have stressed throughout this Handbook, it is important that the board understand and fulfill its role in

making policy while the

CEO maintains control

over the daily operation of

the center. In the first

section of this module we

discussed that this relationship is often fostered by an

even closer working

collaboration between the

Executive Committee,

especially the chairperson,

and the CEO.

The CEO also serves as the

primary communication

link between the center’s

board and staff. Through the CEO, health center staff are assured

that their input will be incorporated into business discussions about

the need for new or revised programs and services, billing and

CHARACTERISTICS OF A

HEALTHY BOARD/CEO RELATIONSHIP

■ High level of trust: The board

trusts that the CEO openly

discloses information. The board

trusts that there is balance

between the CEO and the

Executive Committee—that the

Executive Committee and the

CEO do not make decisions to

the exclusion of the full board.

■ Confidence in the CEO: Even

when working with a relatively

untrained board, the CEO

consults the board before

making any programmatic or

operational decisions.

HEALTH CENTER

LINKAGE OPPORTUNITIES

“HORIZONTAL” LINKAGES

■ Other health centers

■ Programs for special

populations

– perinatal

– homeless

– public housing

primary care

– HIV primary care

– healthy schools/

healthy communities

■ Public health

departments

■ Child welfare agencies

■ Community mental

health centers

■ Adult and child day care

centers

■ Head Start programs

■ Migrant legal services

“VERTICAL” LINKAGES

■ Hospitals

■ Private specialty

practice groups

■ Long-term care facilities

■ Teaching universities

■ HMOs

■ Other managed care

organizations, such as

PPOs or IPAs
61 ■

collections, site development, and training. As we discussed earlier,

the board should expect a report from the CEO and the medical

director at each board meeting. Occasionally, other senior staff will

report to the board as well.

Various staff members, including administrative and clinical staff,

may be asked to participate in special board meetings such as

strategic planning sessions. Their input, as well as their participation, can be the key to success.

We are now ready to discuss the third type of relationship that

involves health center boards, namely, the interaction of the board

with various funding agencies.

Relationships with Health Center Funders

To support the delivery of primary care services and its various

programs, the health center relies on support from various groups

or organizations. Some of that support may come from Federal,

State, or municipal agencies. Other funders may be national or

local private philanthropic or charitable organizations. Most health

centers receive funding from a combination of these sources.

While the board is not expected to know all the details of these

funding arrangements, the board is responsible for knowing:

■ Who those funders are

■ The basic “rules” established by various funders

■ Potential impact of changes in funding

■ How to educate and inform health center funders.

Funders and Their Rules

The Federal Government continues to be a primary source of funds

for health centers. These funds are usually in the form of grants. In

most cases, the major funding partner is the Bureau of Primary

Health Care (BPHC) within the Health Resources and Services

Administration (HRSA), U.S. Department of Health and Human

Services (DHHS). A BPHC-supported center’s primary relationship

will be with a Government Project Officer located in a regional
■ 62

office or with staff in the BPHC central office in Bethesda, Maryland. The Project Officer assigned to the grantee (i.e., health

center) assists the center in complying with requirements and

reporting procedures in order to continue to qualify for BPHCsupported program funds.

Other DHHS agencies may also fund health center programs. For

example, the Centers for Disease Control and Prevention may

provide funds to the center for immunizations for infants and

children.

It is likely that the health center supports its operations through

fee-for-service programs or capitated arrangements. For example,

a significant percentage of health center costs may be defrayed

through Medicaid reimbursements—a State-administered program

jointly funded by the State and Federal Governments. Medicaid

reimburses health care providers for services to eligible lowincome individuals. In most cases, Medicaid payments account

for approximately one-third of a health center’s yearly revenues.1

If the center serves older adults, it is also likely receiving Medicare reimbursements—a federally subsidized program administered by DHHS’s Health Care Financing Administration.

Other public, corporate, or philanthropic funders have varying

expectations and accountability requirements as part of their

grants. It is the board’s responsibility to ensure that those reporting requirements are met.

The board is also responsible for understanding how changes in

the political and social environment can impact changes in Federal and State funding policies. The board must develop strategies

to identify potential funders and establish links with other health

1

America’s Essential Providers: The Foundation of Our Nation’s Health System. Gage, L.S., et

al., 1995, National Association of Public Hospitals.

THE BOARD MUST DEVELOP

STRATEGIES TO IDENTIFY

POTENTIAL FUNDERS AND

ESTABLISH LINKS WITH OTHER

HEALTH SERVICE PROVIDERS.
63 ■

service providers. The board must also be prepared to make the

views of health center constituents known to current and potential funders. In other words, the board serves as the health

center’s advocate.

Educating/Informing Public Policymakers

All nonprofit boards, including health center boards, rely on the

support of policymakers. This requires keeping them aware of

the continued need for various grant and entitlement programs.

This can be as simple as accompanying the CEO when the CEO

visits a funding source, or more complex such as presenting the

board’s position on an issue before a legislative committee or

delegation. Educating and informing policymakers can also

involve writing letters to the editor of a local newspaper, taking a

position for or against certain proposed legislation, or organizing

other members of the community to work on behalf of the center.

Another effective strategy is to invite a legislator or policymaker

to visit your center.

■ Caution: While educating and informing policymakers is an

activity important to the center, it also presents a minefield of

potential problems. There can be a fine line between educating/

informing and lobbying. And, there are specific Federal laws

precluding lobbying with Federal funds. Before embarking on

educational/informational activities on behalf of the center,

understand the distinction between educating/informing and

lobbying and ensure your activities fall into the former category.

Check with the center’s legal counsel.

THERE CAN BE A FINE LINE

BETWEEN EDUCATING/

INFORMING AND LOBBYING.

DONT’T GUESS—CHECK

WITH THE CENTER’S LEGAL

COUNSEL.
■ 64

EXTERNAL ADVISORS

In addition to individual members of the board and the center’s

CEO, there are external advisors and resources available to

health center boards. Some Federal advisors include the BPHC

Project Officer mentioned previously. In addition, assistance is

provided through State and regional primary care associations

and national organizations that are supported by BPHC.

Other resources are available to provide information, training,

and support. Some of these organizations include State primary

care associations, the National Association of Community

Health Centers, and the National Rural Health Association,

each of which sponsors regional and national conferences with

sessions specifically designed to train and orient new board

members. Most health center boards also utilize the services of

special advisors or consultants, including attorneys, accountants, and other as-needed resources such as architects, engineers, and contractors. A listing of some national resources

follows this section.

If you are beginning to feel that being a member of a health

center board is more than you bargained for, and you are expected to know too much, don’t be discouraged. While it is true

that being a member of a health center board involves your

commitment of time and attention, it can be a very rewarding

and positive experience. Remember that you were asked to

serve on the board because other board members recognized

your skills and expertise. You are not expected to know everything—being on the board is a learning experience.

REMINDER

Utilize available resources
65 ■

APPENDIX A

RESOURCE LIST

The following organizations can be a source of information

about community board operations:

■ National Charities Information Bureau

19 Union Square West, 6th Floor

New York, NY 10003-3395

(212) 929-6300

(212) 463-7083 (fax)

www.ncib.org/

■ Philanthropic Advisory Service of the Council of Better

Business Bureaus

4200 Wilson Boulevard, Suite 800

Arlington, VA 22203

(703) 276-0100

(703) 525-8277 (fax)

www.bbb.org/

■ National Center for Nonprofit Boards

1800 L Street, NW, Suite 900

Washington, DC 20036

(202) 452-6262

(202) 452-6299 (fax)

www.ncnb.org/

■ National Assembly of National Voluntary Health and Social

Welfare Organizations

1319 F Street, NW, Suite 601

Washington, DC 20004

(202) 347-2080

(202) 393-4517 (fax)

www.nassembly.org/
■ 66

The following HRSA/BPHC-supported organizations provide

resource materials to health centers, health planners, policymakers,

researchers, information centers, and others. In some cases training

and/or technical assistance is also available through these sources.

■ Association of State and Territorial Health Officials

1275 K Street, NW, Suite 800

Washington, DC 20005-4006

(202) 371-9090

(202) 371-9797 (fax)

www.astho.org/

■ HRSA Information Center

2070 Chain Bridge Road, Suite 450

Vienna, VA 22182

(888) ASK-HRSA

(703) 821-2098 (fax)

www.ask.hrsa.gov/

■ National Association of Community Health Centers, Inc.

Suite 122

1330 New Hampshire Avenue, NW

Washington, DC 20036

(202) 659-8008

(202) 659-8519 (fax)

www.nachc.org/

■ National Association of County and City Health Officials

1100 17th Street , NW, 2nd Floor

Washington, DC 20036

(202) 783-5550

(202) 783-1583 (fax)

www.naccho.org/

■ National Center for Farmworker Health, Inc.

1770 FM 967

Buda, TX 78610

(512) 312-2700

(512) 312-2600 (fax)

www.ncfh.org/
67 ■

■ National Rural Health Association

1 West Armour Boulevard

Kansas City, MO 64111

(816) 756-3140

(816) 756-3144 (fax)

www.nrharural.org/

Your health center’s CEO and BPHC Central and Regional Office

staff can also provide information about resources available

through State/Regional Primary Care Associations, State Cooperative Agreements, State Offices of Rural Health, and national

technical assistance contracts.
■ 68
69 ■

APPENDIX B

HISTORY OF THE

HEALTH CENTER MODEL

This country’s current system of health care delivery, including

nonprofit health centers, did not evolve in a vacuum. Rather, the

roots of this system, as well as the crisis surrounding the system,

are firmly grounded in the sociology, philosophy, politics, and

economics of the latter half of the 19th and the early part of the

20th century. To successfully understand the current system of

health care delivery and the problems of access, quality, and cost

that confront this country today, it may be helpful for you, as new

members of a health center board, to look back to the roots of

those issues and problems. Therefore, together with a discussion

about the issues surrounding operating and governing a health

center in today’s complex and constantly changing business

environment, we have included this brief review of the history of

the health center model as it has evolved into its present form.

Much of the information included in this overview focuses on the

role of the Federal Government in the development of that model.

But not every health center depends on Federal funds; and most

rely on funds from sources in addition to the Federal Government,

including other third-party payers and patient fees. In fact, today

it is more common that the Federal Government serves as the

“national partner” in a multi-tiered business arrangement of

various funding agencies, all with different criteria and reporting

requirements.

Health Centers in Retrospect

The beginnings of the current model of health centers can be

traced back to the health center movement, which began in this

country between 1910 and 1920 as a reaction from public health

officials to the split or overlap of services provided to schoolchildren; mothers and infants; and patients with venereal disease,

tuberculosis, and other conditions. According to Paul Starr in The

Social Transformation of American Medicine,

1

 the concept of a
■ 70

health center enjoyed wide popularity until the 1930’s, when it

faded. It was not until the 1960’s that the health center model was

revived, and then in a much-altered form.

The Early Years: Private and State Involvement

The early health centers were established to coordinate health

department programs and the efforts of local voluntary agencies

within a particular neighborhood. Starr quotes health reformer

Michael Davis’ 1927 definition of a health center as an “organization which provides, promotes, and coordinates medical services

and related social services for a specified district.”2

As Starr points out, “health center” was a rather loose term, applied to child welfare stations, settlement houses, hospital outpatient departments, and tuberculosis and venereal diseases clinics.

In contrast to the current model, these early health centers did have

one thing in common—they were always meant to serve as an

addition to rather than a replacement for the private practitioner.3

In general, these centers were supported largely by local health

departments and private philanthropies as well as by various

church and business groups. At this time, Federal involvement was

virtually nonexistent.

At the end of the First World War, the New York State Commissioner of Health suggested organizing a network of health centers

to meet the medical needs of the State’s rural counties with a

declining availability of physicians. He envisioned health centers

consisting of a hospital, outpatient clinic, laboratory, and facilities

for public health programs. Although proposed as a way to

complement rather than replace the individual physician, this plan

drew widespread opposition from the medical community. The bill

that was finally passed authorizing State aid to counties for public

health facilities failed to provide for health centers.4

The few health centers that did develop provided only diagnostic

services and referred the patient to private physicians for treatment. According to Starr, this “artificial” separation of diagnosis

from treatment laid the groundwork for what would be later
71 ■

termed the “fragmentation” of this country’s medical care delivery

system.5 This so-called fragmentation of services would surface

again in the 1960’s—becoming a source of heated debate and

controversy among health care reformers.

Federal Involvement:

The Neighborhood Health Center

In 1965, the first neighborhood health centers (NHCs) were funded

as demonstration projects by the Office of Economic Opportunity

(OEO) as part of the War on Poverty. Although health care had not

been identified as a priority in the original War on Poverty, it soon

became apparent that poor health and lack of access to medical

care were major obstacles to the success of OEO’s communitybased educational and job training programs.6,7

It was at this time that two New England physicians submitted a

proposal to OEO for an NHC. Through their efforts and the support of OEO staff, a new model of health care delivery was established. The first two NHCs were opened—one in a Boston housing

project in 1965 and a second in rural Mississippi in 1967. In 1966,

the Economic Opportunity Act was amended and authorized $50

million to “develop ‘comprehensive health services programs’ in

rural and urban low-income communities.”

Although NHCs were initially met with skepticism and suspicion

by bureaucrats and the mainstream medical community, the basic

concepts underlying their formation spread very quickly. Based on

the belief that consumers and patients of all socioeconomic levels

have the right to exercise control over their own affairs within the

community where they live, the NHC model had four major components—(1.) comprehensiveness, (2.) training and employment of

community residents, (3.) community participation in the governance of the center, and (4.) delivery of cost-effective familyoriented primary care services.8

 Aside from the training component, these values have survived and still form the underlying

requirements driving the establishment and operation of today’s

health centers.
■ 72

According to Larry Patton in his report Community Health Centers: The Early Years of the Movement, at this point, NHCs were

still virtually unnoticed by national organizations such as the

American Medical Association and the American Hospital Association. Local physicians and hospitals did notice, and tended to

react negatively. Patton relates that it was not unusual for some

hospitals to refuse admitting privileges to NHC physicians. Some

private practitioners refused to transfer patient records and some

health departments were particularly hostile to the possible intrusion of the Federal Government into local health care delivery.9

There are still areas of the country where this is true.

This resistance from local practitioners led to the passage in 1967

of an amendment requiring NHCs to target their services to those

below the poverty level. NHC services would be provided based

on income rather than residence. There was now a clear demarcation between Government medicine for the poor and private medicine for the rest of the community10 —direct reversal of the initial

concept of the NHC serving anyone who lived within the service

area. Besides greatly adding to the administrative costs of the

NHCs, the concept of “ineligibility” was now firmly established.

By 1968, a total of 32 centers were in operation, and another 16

had been funded and were in various phases of planning. Within 5

years, 150 health centers had been established. Three of every four

centers were located in urban areas, and it was estimated that these

NHCs could provide services to 1 million individuals when fully

operational.11,12

In the late 1960’s, several types of grant programs were consolidated. Funds were no longer automatically allocated to the States,

and awards were made at the discretion of the Federal program.

The focus shifted from the State to the community level and

innovation in the delivery of health care was encouraged.
73 ■

The 1970’s: The Emergence of the

Community Health Center Model

During the early 1960’s, the Nixon administration dismantled

OEO and transferred its programs to the U.S. Department of

Health, Education and Welfare (DHEW), which was later renamed the Department of Health and Human Services (DHHS).

The policies of DHEW at that time reflected the Nixon and later

the Ford administrations’ determination to control Federal

spending by returning power for many programs to the State and

local levels. In 1972, the Bureau of Community Health Services

(BCHS), later to become the Bureau of Health Care Delivery and

Assistance (BHCDA) and then the Bureau of Primary Health

Care (BPHC) in DHHS, was created. Bureau staff were almost

immediately confronted with a real challenge. As a response to

concern in Congress about the efficiency of management and

cost effectiveness of individual health centers, some Government

policymakers wanted to phase out the entire health center program. The administration was determined at least to reduce funds

for health centers and terminate certain types of health programs.13 If the health center program were to survive, BCHS

would have to demonstrate to Congress that health centers were

not only effective, but also necessary. Bureau staff capitalized on

the situation described in the next section to gather critical

congressional support to ensure further participation of the

Federal Government in the health center program.

The Rural Health and Urban Health Initiatives

As early as 1973, it became apparent that approximately half of

this country’s medically underserved people resided in rural

areas. However, as much as 85 percent of health center grant

dollars went to cities. Through the development of the Rural

Health Initiative (RHI), resources were concentrated in areas

perceived to have the greatest need, and BCHS demonstrated the

ability to deliver more cost-effective services more efficiently.

But this program did much—it gained political support from

rural Congressmen who had previously viewed the health center

program as an “urban ghetto program”14 thus, preserving the

federally based health centers program.
■ 74

To further demonstrate that the health center program was efficient

and productive, “measures of productivity” were established to

evaluate individual health centers. However, it was not until the

late 1970’s that program monitoring, efficiency, and “capacitybuilding” became central themes with BCHS.15

In 1975 BCHS awarded 35 new grants for “urban health initiatives” (UHIs), which were to be modeled after the rural programs,

thus solidifying political support from key urban Congressmen. It

is important to point out basic differences between the UHI and

NHC models:

■ The focus of the UHI was to coordinate and maximize existing

resources and use available providers to reach previously

unserved populations, in contrast to the NHC which was

envisioned as a major new resource for job training and community development.

■ UHIs were established to deliver basic medical care rather than

the more comprehensive health services in the NHC model.

Self-sufficiency Tied to Reimbursement

From its beginnings in the 1960’s, the intent of the NHC program

was to foster self-sufficiency and negate the need for continued

grant funds. It soon became evident that to achieve that goal,

health centers would have to recover the maximum allowable from

Medicaid and Medicare as well as reimbursements from other

third-party payers. Beginning in 1973, there was a movement

among health centers to develop the more sophisticated accounting

systems needed to process Medicare reimbursement requests.

Although required by the Federal Government to reimburse for

outpatient hospital care in a hospital clinic, Medicaid reimbursement for services obtained at an ambulatory care center was not a

well-established procedure. Reimbursement for care at health

centers was considered optional under Medicaid reimbursement

guidelines.16
75 ■

The Emergence of the Primary Care Center

In an attempt to facilitate Medicaid reimbursements, in 1980 the

Carter administration recommended that reimbursement for clinic

services become mandatory under Medicaid and that “organized

primary care providers,” including community and migrant health

centers, be designated as “clinics.” However, the measure was

never enacted.17

According to a noted historian of the CHC model, the Reagan

administration, when it came into office in 1981, had a goal of

“reversing the growth of the Federal Government and turning the

administration of social programs over to the States and local

governments.” The administration used the mechanism of budget

reconciliation to force “massive cuts in spending” and reinstated

block grants to the States.18

Within this environment, the health center and family planning

programs became extremely controversial. By 1982, a total of 186

CHCs had been defunded. Defunding was based on five criteria:

■ Relative need of the service area

■ Administrative efficiency

■ Review of billing and collection procedures

■ Results of the most recent audit

■ Comments from Governors, State health departments, and

State medical societies.19

Not only do these criteria still exist today, they form the basis for

the roles and responsibilities of health center board members.

Ronald Reagan’s second term was characterized by a continued

commitment to reduce the Federal role while increasing State

involvement in providing health care to the underserved. For the

most part, President Bush followed the same agenda. However, the

Bush administration soon found itself having to deal with two

major public concerns: (1.) the growing Federal deficit and (2.) the

issues of access, quality, and control of the cost of health care.
■ 76

The Current Health Care Environment

Most Americans understand that we are dealing with a crisis in

our health care system. The delivery of health care in this country

has become big business, and we are still trying to solve the same

problem of access and quality that faced health care reformers in

the early part of this century.

There is widespread concern about the impact of increased health

expenditures on the Federal deficit. “Managed competition” has

become a catch phrase among health policymakers; and there is

support for implementing “managed competition,” possibly

within the current framework of health maintenance organizations

(HMOs). In one observer’s opinion, “...the current health policy

environment has become increasingly structured for competition.”

Health center administrators and governing boards are expected to

organize their centers to compete with, or team with, other health

service organizations in providing cost-efficient, “managed”

health care.20 It is clear that most health care reformers, including

physicians, agree that the traditional “fee-for-service” system

cannot survive in its present form. It is less clear, however, that

any significant reform will be able to successfully navigate the

turbulent political environment created by economic issues and

vested interests.

One possibility is that health centers will continue to be encouraged to contract with HMOs, Integrated Service Networks, primary care associations, or other public and private organizations

to provide outpatient services as well as to practice strategic

management and market their organizations to consumers and

clinicians while maintaining their community-based boards. The

new environment requires that the health center be strong enough

to compete for new markets of private, non-grant dollars within

the current health center model while continuing to deliver comprehensive primary care to low-income populations.

The directive for governance to health center boards promises to

be more, not less complicated. More than ever, board members
77 ■

have to understand their roles and responsibilities, and they must

adjust to a constantly changing and complex business environment.

Board members are now expected to practice creative strategic

planning to meet the challenge of how to deliver much-needed

quality services to their community.

Access to health care services—both economic and geographic—

has challenged government and community leaders for more than a

century. Health centers have evolved out of a history of maternal

and child health, rural and urban health, and epidemic prevention

programs to improve access to care, reduce needs for more costly

hospital services, and support people to maintain healthy and productive lives. Health centers have established a role—as health

providers and employers. They have become a key link in the

primary health care system, and are part of the solution to the problems of access for people in communities throughout the Nation.
■ 78

REFERENCES

1. Starr, P. The Social Transformation of American Medicine.

New York: Basic Books, Inc. 1982.

2. Ibid. pp. 194–195.

3. Ibid. p. 195.

4. Ibid. p. 195.

5. Ibid. p. 196.

6. Patton, L. T. “Community Health Centers: The Early Years

of the Movement.” Technical report. Washington, DC:

National Association of Community Health Centers, n.d.,

pp. 4–8.

7. National Clearinghouse for Primary Care Information.

Primary Care: Community Health Center Programs.

Washington, DC: Government Printing Office.

8. Fisher, R. S. and Jones, J. M. “Access to Primary Care in

Underserved Areas: Expanding Medicaid, Medicare, and

Public Health Services Through the FQHC Program.” Issue

Brief No. 613. Washington, DC: The George Washington

University Health Policy Forum, 1993, pp. 3–4.

9. Patton, op. cit. p. 26.

10. Ibid. p. 26

11. Ibid. p. 24.

12. National Association of Community Health Centers. “Community and Migrant Health Centers: A Key Component of

the U.S. Health Care System; Overview and Status Report.” Technical report. Washington, DC: National Association of Community Health Centers, n.d., p. 1.

13. Sardell, A. The U.S. Experiment in Social Medicine: The

Community Health Center Program. 1965–1986. Pittsburgh, PA; Pittsburgh University Press, p. 111.

14. Ibid. p. 115.
79 ■

15. Ibid. p. 117.

16. Ibid. p. 128–129.

17. Ibid. p. 132.

18. Ibid. p. 165.

19. Ibid. p. 182.

20. Ibid. p. 192
■ 80
81 ■

APPENDIX C

CHRONOLOGY OF THE

COMMUNITY HEALTH CENTER MOVEMENT

1910–1920’s Beginning of the health center movement; centers

were basically established to coordinate health

department programs and efforts of volunteer

neighborhood agencies; “health center” term applied loosely to child welfare stations, settlement

houses, hospital outpatient departments, and tuberculosis and venereal disease clinics.

1930’s Health center concept faded.

1965 Federal involvement began as part of the War on

Poverty and health centers were funded as demonstration projects by the Office of Economic Opportunity (OEO). There were four major components to

this health care model: (1.) comprehensiveness, (2.)

training and employment of community residents,

(3.) community participation in governance of the

center, and (4.) delivery of cost-effective familyoriented primary care services.

1966 Economic Opportunity Act amended, authorizing

$50 million to develop comprehensive health

service programs in low-income rural and urban

communities.

1967 Economic Opportunity Act amended; health centers

required to target those below the poverty level.

1968–73 150 health centers had been established; 3 of every

4 centers were in urban areas.
■ 82

Early 1970’s OEO dismantled; programs transferred to DHEW

(now DHHS); Nixon and Ford administrations

attempt to control Federal spending by returning

power for a number of programs to the State and

local levels and reduce health center funding; Congressional concern regarding level of productivity

and management of health centers. CHC model

developed.

1980 Carter administration fails in attempt to make health

center services mandatory under Medicaid.

1981 Omnibus Budget Reconciliation ACT (OBRA)

enacted as part of the Reagan administration goal of

reversing growth of Federal Government and turning

governance of social programs over to State and

local agencies.

1982 Under OBRA, 186 health centers are defunded; 5

criteria for defunding: (1.) relative need of the service area, (2.) administrative efficiency, (3.) review

of billing and collection procedures, (4.) results of

the most recent audit, and (5.) comments from

Governors, State health departments, and State

medical societies.

1995 There is widespread concern about the impact of

increased health expenditures on the Federal deficit.

The current health care structure is increasingly

competitive. Governing boards will be expected to

build linkages and provide cost-effective managed

care to compete.