Abstract
Excerpted From: Almeta E. Cooper and Michael W. Peregrine, Health Equity and Corporate Governance in Health Care Organizations: Challenges, Risks, Resources, and Strategic Responses, 16 Journal of Health & Life Sciences Law 74 (2022) (63 Footnotes) (Full Document)
Health care organizations have been overwhelmed by a confluence of national crises related to social justice, systemic racism, a global pandemic, economic volatility, and a myriad of political crises, especially during the period beginning around January 2020. The impact of the sudden onset of these multiple crises--combined with their complexity and the profound uncertainty about the projected duration of their impact--was exacerbated by the concomitant disruption of day-to-day health care business operations and the delivery of quality medical care services. In this tumultuous environment, racial and social justice issues relative to health equity were exposed among the most challenging crises directly affecting the traditional U.S. health care ecosystem consisting of hospitals, health systems, health care professionals, and payers to name a few.
Specifically, governing bodies of health care organizations have been confronted with the impact of health inequities upon their core mission of delivering quality medical care services. Oversight of health equity in the delivery of quality services or conversely, detection of the existence of material health inequities, is the primary responsibility of the governing body. Failure to provide effective oversight could in some extreme cases result in a breach of the governing body's duty of care to the organization and oversight responsibilities. Any governing body that does not understand the urgency of having meaningful processes in place to assure that health equity is included in the organization's quality mission is at potential material, legal, regulatory, and reputational risk.
While coping with constantly changing circumstances in early 2020, governing bodies relied on their chief executive officers (CEOs) and general counsel as trusted advisors to assist them in fulfilling their responsibilities to lead the organization and set organization priorities. This was reflected in the “mission critical” core value of assuring the delivery of quality care despite the turbulence and uncertainties precipitated by the unprecedented confluence of national crises. The initial lack of and/or awareness of clear and cohesive legal, industry, regulatory, or policy guidance on health equity was even more disconcerting for board members expected to discharge their traditional fiduciary and mission critical oversight responsibilities. This void overwhelmed and paralyzed some governing bodies and sent their leadership teams scrambling to identify short-term solutions initially and later, longer-term solutions.
Apart from the multiple crises and lack of guidance that arose in connection with these extraordinary and unprecedented events, health care governing bodies were also affected by the public's higher expectations of health care organizations and health care professionals to “do good” and “do no harm” to patients and their families. Concerns about reputational risk influenced the decisions of governing bodies, which have the ultimate legal and fiduciary responsibility for governing the health care organization. The reputational risk associated with the public's expectations determines how or whether health equity and other social justice principles are proactively integrated within the organization's core mission and business operations. Assuring the fulfillment of mission critical duties despite the uncertain state of the health care ecosystem is simultaneously an aspirational duty for health care governing bodies and a legal duty upheld in corporate governance cases decided by the Delaware Supreme Court. Importantly, the failure to preserve an organization's reputation because of the existence of material health inequities could be considered harmful to the health care organization's reputation, which is an asset of the organization that the governing body is obligated to protect.
The state of change in the health care ecosystem remains dynamic. Health care organizations' governing bodies are strongly urged to monitor the proliferation of relevant federal and state government developments, publications, resources, and organization strategies that were made available in the second half of calendar year 2021. Notably, President Biden strongly signaled his policy commitment to equity for all, including health equity by addressing these subjects in two of the executive orders issued early in his administration. On January 20, 2021, he signed Executive Order 13985, Advancing Racial Equity and Support for Underserved Communities Through the Federal Government. On January 21, 2021, he signed Executive Order 13995, Ensuring an Equitable Pandemic Response and Recovery. These Executive Orders declared President Biden's policy position:
It is therefore the policy of my Administration that the Federal Government should pursue a comprehensive approach to advancing equity for all, including people of color and others who have been historically underserved, marginalized, and adversely affected by persistent poverty and inequality. Affirmatively advancing equity, civil rights, racial justice, and equal opportunity is the responsibility of the whole of our Government.
On August 30, 2021, the Biden Administration reinforced its commitment to health equity when it announced the creation of the Office of Climate Change and Health Equity (OCCHE) in the U.S. Department of Health and Human Services (HHS). The OCCHE is a novel federal approach to address climate change and health equity created in response to President Biden's Executive Order 14008, Tackling the Climate Crisis at Home and Abroad. The Office's mission is to protect communities that have been economically and socially marginalized, including communities that disproportionately bear the brunt of pollution and climate-driven disasters, such as drought and wildfires, at the expense of public health.
Governing bodies should monitor OCCHE's activities and seek advice from counsel and senior management about its potential indirect and direct impacts on the health care ecosystem. An indicator of this philosophy was reflected in HHS Secretary Xavier Becerra's response to questions about the reduction of carbon emissions from health care facilities: “We will use every authority to its greatest advantage because it is time to tackle climate change now.”
This article is intended to be a resource for health care governing bodies, their CEOs, and general counsel to guide their organizations in (1) understanding the importance of language and concepts related to health equity, (2) identifying key areas of opportunity to integrate health equity in health care governing body actions pertinent to the delivery of quality care, and (3) identifying current guidance and resources. In addition, this article offers a forecast of potential future developments to monitor relative to health equity and makes recommendations about basic principles to consider when customizing the integration of health equity strategies in the core quality mission.
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The delivery of quality medical care, including the achievement of health equity, is mission critical for health care organizations. Implementing health equity-focused recommendations are part of a governing body's important journey toward fulfilling that core mission. Notably, there has been an explosion of available health equity resources and commentary in 2021 that should be monitored and used to facilitate and enhance the organization's journey. It is critical for all involved to remember the concept of the journey during this process that governing bodies must undergo to find ways that will effectively integrate health equity into their actions; the journey will be continually changing and dynamic. Most importantly, a governing body must not lose its focus on health equity as an essential component in guiding decisions and as an essential measure of quality.
ALMETA E. COOPER is a former president and Fellow of the American Health Law Association (AHLA).
MICHAEL W. PEREGRINE represents corporations, their officers, and directors on governance and fiduciary duty matters, officer-director liability issues, charitable trust law, and corporate structure as a partner at McDermott Will & Emery. Contact him via email at
