“No margin, no mission.” This quote, attributed to the late Sister Irene Kraus, says it all. That is, the mission of providing safe, high-quality care that meets community needs carries with it specific resource demands that can only be met through maintaining an appropriate margin. For board members of a healthcare provider organization, no responsibility is more important than establishing and monitoring the balance of mission and margin. Board members must understand the financial implications of mission, ensure that the organization’s financial position supports the mission, and monitor both mission and margin using key performance indicators.
This paragraph is the opening of an article entitled "A Board's Eye View of Mission and Margin" that HFMA's President and CEO Richard L. Clarke, DHA, FHFMA, recently published in an e-briefing from The Governance Institute. The article outlines a framework for thinking about how mission pertains to margin, discusses how to set a budget for community benefit, and suggests indicators related to mission (including indicators of quality and culture) and margin that a board can monitor.
The article's call to action concludes with this assertion:
Hospital leaders must recapture the trust that has been lost and must work every day to maintain that trust. For hospital boards, the most concrete actions toward that goal are establishing a clear set of mission-related goals, quantifying the financial resources necessary to meet those goals, and monitoring performance related to both mission and margin. This careful oversight will maintain the balance of mission and margin, and will make sure hospitals earn the community trust they deserve.
