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Governance involves organizing an entity in such a way that the quality of management and its supervision is ensured. In recent years, this has become an increasingly important topic in the healthcare sector. The idea is that good governance will improve the quality of care. There are several points of attention for the healthcare sector to consider, which will be discussed in the blog series on Governance in Healthcare. This blog will discuss the Healthcare Governance Code.
In 2005, the first version of the Healthcare Governance Code (then called the 'Broad Healthcare Governance Code') was published by several industry organizations in healthcare. Since then, multiple new versions have been published, with the most recent being the Healthcare Governance Code 2022.
The Healthcare Governance Code is a form of self-regulation by the healthcare sector. The code is drafted by industry organizations, and they also require their members to comply with it. Other stakeholders, such as clients and employees, were also involved in drafting the code to ensure broad support.
The code applies to every healthcare organization that is a member of one of the affiliated industry organizations (such as ActiZ, NVZ, the Dutch Mental Health Association) and the associated group and subsidiary companies that provide care. Healthcare organizations that are not members of an industry organization also encounter the code in practice. Health insurers often require compliance with the code, and regulators, IGJ and NZa, use the code to assess the quality of management and supervision. Judges will also refer to the norms and principles from the code when assessing whether the management and supervisory board have fulfilled their duties carefully. Therefore, most healthcare organizations will effectively need to adhere to the Healthcare Governance Code.
The content of the code is based on seven principles:
These seven principles are further elaborated in the code with provisions and behavioral rules regarding their concrete application.
The code is a form of self-regulation and is therefore not legally binding in a strict sense. However, the principles are authoritative in practice and are used to give substance to open norms, such as what constitutes good management and supervision.
Previously, the well-known principle of 'apply or explain' was used. This has since been abandoned. In practice, this led to 'checklist behavior,' where healthcare organizations technically met the concrete requirements but did not act in the spirit of the Governance Code or were not genuinely aware of it. Therefore, the principle of 'apply and explain' is now used, where a healthcare organization must also explain how it complies with the principles of the code. In some cases, deviation is not possible at all, and the 'apply' principle simply applies. When a healthcare organization wants to deviate from a provision, it must be done with well-motivated and verifiable justification.
It is the responsibility of the management and the supervisory board to ensure that the healthcare organization acts and is organized in accordance with the principles of the Governance Code. They are also tasked with identifying deviations from the code and acting accordingly.
If stakeholders, such as employee participation bodies, believe that a healthcare organization does not comply with the Governance Code, they can approach the Healthcare Governance Committee. The committee will assess whether the healthcare organization is applying the code correctly. If a healthcare organization does not adopt or implement the committee's ruling, the industry organization to which the healthcare organization belongs can take action. In extreme cases, this can even lead to the suspension or expulsion of the healthcare organization's membership.
If you have questions about the Healthcare Governance Code, contact Sonja Geldermans, Corporate Law Attorney.
Blog Series
This blog series will address various points of attention regarding Governance in Healthcare, such as the role of the client council and the rules (to be) applied to commercial healthcare institutions.
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