On Feb. 4, the Senate and House of Delegates approved SB 1259 and HB 2161, respectively, which propose changes that would enact several recommendations from a Joint Legislative Audit and Review Commission report.
The commission recommends that the VCU president become a nonvoting member of the board, and that the president be prohibited from serving as chairman of the board. According to the Richmond Times-Dispatch, the VCU president, under current law, also serves as chairman of the VCU Health board. VCU and VCU Health are separate but overlapping state agencies, each with its own governing board.
The legislation proposes reducing the number of appointed board members from 19 to 13 and adding the VCU Health CEO as an ex officio voting member, decreasing the total board size from 21 to 16. The bill also increases the length of time that board members serve from three years to four. Additionally, it would require some members of the health system board to have demonstrated experience or expertise in finance or commercial real estate to meet the board’s qualification requirements.
Under the legislation, a new position — CEO of VCU Health — would be created. This would be a fully independent role, requiring collaboration with the university’s senior vice president for health sciences.
Michael Rao, PhD, has served as president of VCU and chair of the VCU Health board of directors since 2009. Marlon Levy, MD, serves as senior vice president of VCU Health Sciences and CEO of VCU Health.
“You still can’t tell me who was responsible because there’s so much gray area with the boards,” Sen. Lamont Bagby, who sponsored the Senate version, said, according to the Times-Dispatch. “There’s so much gray area with the president, the CEO.”
JLARC completed a review of the health system’s capital process and governance structure in June. The review followed VCU Health’s withdrawal from a hospital deal, which resulted in a $72.9 million payment to exit a 25-year lease agreement for the project.
“VCUHS improved its capital process following the Clay Street project but needs to develop a long-term strategic capital plan, strengthen several policies, and increase staffing to effectively handle capital projects that are needed to sustain and expand operations,” JLARC wrote in its June report, which was shared with Becker’s.
The review commission concluded that the health system’s leadership structure should change to reduce the potential for the VCU president position to have too much influence on health system operations and decisions and ensure that the health system CEO’s principal focus is on the health system’s strategic planning and operations.
“The JLARC report noted that its recommendation about the president’s role was about the overall organizational structure and was not reflective of any concerns about the person holding the position,” a VCU Health spokesperson told Becker’s.
The commission also concluded that the health system’s “board would benefit from longer member terms, expertise in additional topics relevant to health system governance, and a greater number of impartial board members.
“VCUHS should retain its ‘authority’ structure and remain separate from VCU,” the report said. “Both entities mutually benefit from their strong collaborative relationship and, concurrent with actions to improve VCUHS’s leadership and governance, steps should be taken to protect that collaboration.”
The bills approved by Virginia lawmakers still require the approval of Gov. Glenn Youngkin.
