Board of Commissioners ORIENTATION

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Board of Commissioners ORIENTATION

• Presented by the Lakes Group

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Purpose

• To gain an understanding of the responsibilities,
  accountability and relationships needed by the
  board of commissioners (directors trustees) as
  a whole to effectively meet the districts
  mission and vision
• To provide access to resources that can help
  answer commissioners legal, regulatory or board
  effectiveness questions

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Sample Advertisement for a district
commissioner/board member

• WANTED creative, dynamic, intelligent, open
  minded individual with superb listening skills to
  engage in strategic planning, lively debates,
  voting and occasional dining out. Must be able to
  toe the line, rock the boat, feed the fire,
  strike a balance and take the heat. Multiple hat
  collection a plus.

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BOARD ORIENTATION IN GENERAL

• Nose In, Hands Off (NIHO)one of the hardest
  functions of a board of commissioners
• BENCHMARK GOVERNANCE Identify best practices
  and use them to fit the local need. Benchmarks
  will change over time and so will individual
  board policies, strategies and dashboard
  monitoring

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BOARD TIME SPENT ON CORE FUNCTIONS

• TYPICAL
• Finance 40
• Operations 35
• Credentials 5
• Quality Service 5
• Strategy 5
• Other 10
• Source Pugh, Ettinger McCarthy, MGMA October
  2001

• BALANCED
• Finance 20
• Operations 10
• Credentials 10
• Quality Service 25
• Strategy 30
• Other 5

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Client Board Meeting Actions Compared to
Typical and Balanced
Typical (Hospital Name) Balanced
Finance-40 20
Operations-35 10
Credentials-5 10
Qual/Svc-5 25
Strategy-5 30
Other-10 5
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BOARD REVIEW EXAMPLES

• Nearly all hospitals regularly review the
  hospital operating statistics, financial
  statements, capital planning data and patient
  survey results
• 80 of boards review adverse medical events,
  medication error rates and infection rates
• Only 50 of the boards review community health
  issuesa key component of their mission and
  social responsibility
• 42 of the hospitals use a balanced scorecard or
  dashboard system to monitor performance
• The Governance Institute-Biennial Survey of
  Hospital Boards, July 2001

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COMMANDMENT OF GOOD GOVERNANCE THE BOARD WILL

• Keep up-to-date on the organization from an
  external viewpointmaintain objectivity!
• Ask all its questions and state all its concerns
  as they arise
• Make its perspectives, experience and judgment
  available to management to improve the
  performance of the organization
• Seek to improve its own performance and keep its
  composition evergreen
• Create an atmosphere conducive to dialogue and
  discussion

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COMMANDMENTS OF GOOD GOVERNANCE MANAGEMENT WILL

• Help the Board in understanding the changing
  external environment ( industry, competition,
  global factors) from different viewpoints
• Tell the Board what management is trying to
  accomplish in the longer term
• Provide sufficient, efficient information to
  allow the Board to assess whether the goals are
  being achieved
• Put good and bad news on the table
• Create an atmosphere conducive to critical
  discussion of key business issues
• Source MGMA Presentation by F.K. Ackerman, FACHE
  October 24, 2001

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COMMUNITY REPRESENTATION AND THE EFFECTIVE BOARD

• Richard Umbdenstock, the author of So Youre
  on the Hospital Board and President/CEO of
  Providence Health Services in Spokane has
  succinctly defined governance as fulfilling the
  function of responsible ownership on behalf of
  the community and involves the responsible
  stewardship and allocation of health resources to
  produce a sustained benefit to the communities
  served.

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SUCCESSFUL BOARDS HAVE EXPECTATIONS OF THEIR
MEMBERS

• A few illustrations
• Board and committee preparation, attendance
  participation
• Education (Local Statealso consider national
  if cost effective)
• Attendance at board retreats
• Enhance a spirit of partnership and communication
• Confidentiality
• Avoid conflicts of interest
• Participation in organization events
• Source Dennis Pointer, PhD, WSHA 24th Annual
  Rural Summer Workshop

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ENHANCING BOARD EFFECTIVENESS AS A WHOLE
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REASONS FOR INEFFECTIVE GOVERNANCE

• Board members who represent the interest of
  specific constituencies, not the organization as
  a whole
• A focus on short-term issues because the Board
  lacks a clear sense of the organizations purpose
• Time spent monitoring the past instead of
  planning and creating the future
• Reviewing information that is largely irrelevant
  to the critical, strategic issues confronting the
  organization

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REASONS FOR INEFFECTIVE GOVERNANCE CONTINUED

• Non-performing or dysfunctional Board members
  that create a negative dynamic and ultimately
  diminished effectiveness
• Maintaining unwieldy, inefficient governance that
  waste the Boards and Managements time
• Confusion about roles, responsibilities and
  relationships with management, the medical staff,
  committees and other Boards
• Source Systems Thinking in Governance, Adapted
  TrusteeJanuary 1999

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ASSESSING THE NEED FOR CHANGEBOARDS SHOULD
ASSESS THE CURRENT GOVERNANCE PROCESSES AND ASK

• Is our current governance process designed to
  drive the values and goals of a health system of
  the future, or a hospital, group practice based
  system of the past?
• Is our governance structure streamlined to make
  efficient decisions? Does it use the Board member
  and managements time efficiently?
• Do we have a lot of overlapping and duplicate
  committee meeting and governance reports?
• Are we more involved in policy and big picture
  decisions or in operational detail?
• Have we been conducting routine self-evaluations?
  What have been the results?
• Source Orlikoff/Totten Trustee Magazine
  November-December 1998

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A SUCCESSFUL BOARD ENSURES ITS ACTIONS PROTECT
AND ADVANCE THE INTERESTS OF THE STAKEHOLDERS

• Have you identified your stakeholders?
• Are you familiar with what your stakeholders
  expect of, and want from the organization? What
  was your method of identification and time frame
  utilized?
• Does the Board decide and act on the
  stakeholders behalf?

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Sample Table of Contents Frontier Hospital
Community Survey
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DASHBOARD OVERSIGHT

• Using an automobile analogy, what dashboard
  gauges are needed to monitor the organization
  from a governance perspective? There are five
  recommended areas to monitor
• Ends the extent to which the vision is being
  fulfilled and key goals are being accomplished
• Management the extent to which the CEOs
  performance is in line with Board expectations
• Finances the extent to which financial
  performance is in line with board specified
  objectives and expectations
• Quality Does the quality of care meet Boards
  standards?
• Self the extent to which the Board is fulfilling
  its responsibilities and executing its roles

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Board Oversight as Steering the Ship

• In a more basic definition of dashboard
  indicators, you can separate into two categories
  lagging indicators results of past
  performance and leading indicators drivers of
  future performance.
• As to the Boards role of steering, not rowing
  the ship Keep a balanced view of the
  organizations performance and keep management
  focused on adhering to the navigational plan,
  e.g. chart the course (high level plan) ensure
  the deck is clean (details) check the wake of
  the ship (lagging indicators) and keep an eye on
  the horizon ahead (leading indicators).

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DASHBOARD OVERSIGHT CONTINUED

• For Dashboard Oversight to be effective, a
  standard needs to be attached to each indicator,
  e.g. the board specifies it expects net operating
  margins from inpatient operations to exceed
  3--the indicator is net operating margin and the
  standard is 3. Indicators must be quantitative,
  or quantifiable.
• Data presented across time (preferably in graphic
  format), juxtaposed against a standard internal
  or external benchmark trends and patterns are
  more easily identified, interpreted and addressed
• Source Board Work Dennis Pointer/James Orlikoff

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Narrative Executive Summary Report

• Narrative summary reports by the C Team (CEO,
  CFO, CNE, Chief of Staff) that highlight, in a
  one page executive summary the areas of concern
  and actions in place or being developed to
  address the areas in question are extremely
  valuable to board members. It is important that
  the dashboard indicators and the executive
  summary are provided to the Board in advance of
  the Board meeting. Timing of financial and other
  statistical data is frequently in conflict with
  historically established board meeting dates.
• Of course areas of significant improvement or
  accomplishment should also be included in this
  Executive Summary Report

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CONSENT AGENDA

• The consent agenda consists of items that can
  be approved without expressive action by the full
  board. These items are combined into a single
  section and included with the full agenda packet
  for members to review prior to the meeting. If
  there are no questions or concerns, the entire
  block of issues can be approved with one board
  vote and no discussion. Any member can ask that
  an item be removed from the consent agenda for
  full discussion
• Board Room Press, The Governance Institute, La
  Jolla, CA June 20012

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Comments on Client Board Minutes (dates reviewed)
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Sample Board Agenda to Consider

• Call to Order
• Reports and Presentations (establish time
  parameters for reports)
• A. CEO Report
• B. Finance Report (with predetermined dashboard
  indicators)
• C. Medical Staff Report (General
  issues/Quality/Credentials)
• D. Patient Services Report (Quality/Training/Staf
  fing etc)
• E. Performance Improvement Activities
• F. Other
• 3. Consent Agenda
• A. Vouchers Warrants
• B. Write-offs
• C. Other

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Sample Board Agenda to ConsiderContinued

• 4. Old Business
• A. Strategic Goal X Status/Actions in
  progress
• B. Other List item and action requested at the
  board meeting
• 5. New Business
• A. List item and action requested at the board
  meeting
• B. Other
• 6. Adjourn

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GENERAL EFFECTIVENESS CONSIDERATIONS

• ANNUAL MEETING SOCIAL FUNCTION OR STRATEGIC
  IMPERATIVE? Annual meetings/retreats to review
  accomplishment of previously established goals,
  mission and vision statements and establish
  direction for the future are one of the keys to
  successful governance
• BOARD ORIENTATION Is your orientation a process
  or an event? Orientation should assist board
  members over time to learn, to do and to lead.
• JOB DESCRIPTIONS Does your board have job
  descriptions for individual commissioners and the
  Chairperson? Are they reviewed periodically?

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GENERAL EFFECTIVENESS CONTINUED

• BOARD SPEAKS WITH ONE VOICE Board members need
  to support decisions or actions taken by the
  Board as a whole, even if they have voted against
  the action or disagree with the action taken. It
  is imperative that the Board be perceived as
  together, not at odds over a decision that has
  been approved by the majority. For those tempted
  to discuss board actions with others outside of
  the district, remember what our Mothers told
  usIf you cant say something nice, dont say
  anything

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EFFECTIVE MEETING TIPS 1

• BOEINGS CODE OF COOPERATION FOR EFFECTIVE
  MEETINGS
• Attend all team (board) meetings and be on time
• Listen to and show respect for the views of other
  (board) members
• Criticize ideas, not people
• The only stupid question is the one not asked
• Pay attentionavoid disruptive behavior
• Carry out assignments on schedule
• Avoid disruptive side conversations
• Always strive for win-win (I prefer gain-gain)
  situations/solutions
• Every (board) member is responsible for the
  teams (boards) progress/success

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EFFECTIVE MEETING TIPS 2

• IS IT A GROUP OR A TEAM?
• Are discussions fully open?
• Are core values, e.g. respect tolerance upheld?
• Is debate based on honest differences rather than
  turf battles?
• Does the team (board) make decisions through
  consensus?or is majority adequate?
• Are there full contributions from everyone?
• Do team (board) members hold each other
  accountable?

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CONFIDENTIALITY

• CONFIDENTIALITY Confidentiality of board working
  discussions by board members is a key factor in
  board effectiveness and credibility with the
  board as a whole, executive management and
  organization staff. If there is a question about
  the confidentiality of specific information, err
  on the prudent side and ask the Board Chair or
  CEO
• Confidentiality, particularly involving patient
  information is a very serious issue in all health
  care organizations, with penalties up to
  termination of employment for discussion of such
  information outside of authorized channels

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COMMUNICATIONS

• Quote from a supervisor, Fortune 100 company
  We know communication is a problem, but the
  company is not going to discuss it with the
  employees.
• Although we hear communication is the key,
  it may not be the problem, and more communication
  may not be the solution. With so many options in
  communication methods, we tend to pay more
  attention to how we are going to communicate,
  rather than what we are going to communicate,
  i.e. communication is an activity rather than an
  outcome.

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Communications, Continued

• Another reason for communications failure or
  static in transmission is that we have
  forgotten communication is a two-way process.
• To build understanding, support and acceptance,
  we need to make a shift and think of
  communication as an outcome.
• To do that we must look at the communication from
  the receivers perspective. We should ask the
  question, What is my desired outcome with this
  communication. What do I want my employees,
  board members, medical staff and/or service area
  community residents to think, feel and do after
  receiving my message?

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COMMUNICATIONS Administrator, Board Medical
Staff Leadership

• Can the Board be wired for flow of information?
• Identify Board and Medical Staffs preferred
  means of communication for routine information,
  heads up and educational bulletins, e.g. memo
  in the chair
• Does the Administrator have regularly scheduled
  meetings with the Board President prior to
  scheduled board meetings?
• Is there some sort of Joint Conference
  Committee to discuss clinical and medical staff
  issues/concerns between the Board, CEO, CNE/DNS
  before action is requested by the full Board?

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BOARD/ADMINISTRATORRELATIONSHIPS

• Washington law is quite clear in requiring the
  elected board of commissioners to oversee the
  hospital districts general policies and
  organization. To fulfill this obligation, the
  boards role is to adopt the necessary general
  policies to achieve these ends and delegate the
  day-to-day responsibilities of these policies to
  the appointed district administrator.
• Source AWPHD Public Hospital District
  Commissioners Guide

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BOARD/ADMINISTRATORRELATIONSHIPS

• It is the boards responsibility to communicate
  effectively, frequently and candidly with the
  administrator/CEO---the administrator/CEOs
  responsibility in turn is to take action and make
  changes.
• Ensuring that a performance appraisal process is
  fair and covers all the bases is a responsibility
  of both the board and the administrator
• SOURCE PRACTICAL GOVERNANCE, Tyler Biggs

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BOARD/ADMINISTRATORRELATIONSHIPS

• A study done by the authors of Practical
  Governance several years ago revealed that 1 in
  10 administrators had never received a
  performance appraisalone of the key factors
  hindering completion of the performance appraisal
  was the lack of clarity or agreement over the
  organizations vision, goals priorities linked
  with a failure to define administrator roles
  responsibilities.
• SOURCE PRACTICAL GOVERNANCE, Tyler Biggs

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BOARD/ADMINISTRATORRELATIONSHIPS

• Performance appraisal should be based on a
  number of quantifiable factors, e.g. financial
  performance against budget operating indicators,
  e.g. clinic visits, ancillary service
  utilization physician employee satisfaction
  based on survey scores and other key goals deemed
  important by the board. In summary
• THE BOARD SHOULD SET CLEAR EXPECTATIONS AS TO
  WHAT THE BOARD WOULD SEE AS A GREAT JOB
  PERFORMANCE BY THE ADMINISTRATOR
• REMEMBER THE GOLDEN RULE

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CEO PERFORMANCE EVALUATION

• 85 of hospitals responding to the 2000 survey
  reported that they formally evaluated CEO
  performance on predetermined objectives and
  criteria (the high response does not indicate
  whether these evaluations are done well)
• We know that the quality of performance
  evaluation is tied to CEO turnoverif there is an
  unplanned departure, it is often related to an
  ineffective CEO evaluation processBarry Bader,
  President, Bader Assoc.
• Governance experts recommend that hospitals link
  CEO incentive compensation plans to the outcome
  of the formal evaluation processThe Governance
  Institute

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BOARD/ADMINISTRATOR RELATIONSHIPS

• THE OBJECTIVE OF A PERFORMANCE APPRAISAL IS
  TO SUPPORT OR CHANGE BEHAVIOR
• There are no misunderstandings there are only
  failures to communicate. Senegalese proverb

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Some Recommended Informational Sites

• www.wsha.org
• www.awphd.org
• www.whf.org
• www.healthleaders.com (excellent daily/weekly
  summary of health care events in numerous
  categories-free)
• Thank you. Philsandifer_at_verizon.net

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Miracle Slide
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Why Strategic Planning?

• With all the uncertainties in our present
  healthcare environment, how can we plan for the
  future?

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WHY HAVE A MISSION A STRATEGIC PLAN?

• It is critical to not only establish an
  organizational mission and strategic plan to make
  a business successful, but also to connect that
  strategy with the hearts and minds of its
  employees. You can never underestimate the
  necessity of understanding the core competencies
  of a business and how they link up with the
  beliefs and values of the staff. HOWEVER, the
  strategies adopted need to move employees out of
  their comfort zone and toward a different
  future. Cheryl Scott, CEO Group Health
  Cooperative
• Puget Sound Business Journal, February 27-March
  4, 2004

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The hospital is not the Business

• Past discussions by hospital CEOs and their
  boards have focused on making the hospital more
  businesslike, while there has been little
  fundamental change in the structure
  organization of hospitals for the last 30 years.
  In fact, it has been said that the current
  organizational format of most hospitals would be
  similar to Dell Computer Corporation organizing
  around production facilities rather than its
  product.

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Hospital is not the Business Continued

• The potential benefits of a real redesign of
  delivery systems begins with the understanding
  the needs of patient populations and designing
  simple systems to move them through the delivery
  process (access follow-up which goes beyond
  just clinical systems)
• The 80-20 rule also applies to hospitals, i.e.
  there will be a small number of hospital/district
  services that account for 80 of the income of
  the organizationthese businesses need to become
  the basis for the organizational structure. Dont
  rely on instinct-- use data to identify and
  confirm the20!
• We need to change the historical business focus
  on the hospital infrastructure, e.g. staffing,
  ancillary services, IT, etc. to focus on the
  development of delivery systems focused on
  meeting the needs of the patient groups and
  stakeholders. Systems should be designed from
  the end-user backward through the organization.
• IS THIS BOARD AND ADMINISTRATION UP TO THE
  CHALLENGE?

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THE FIVE TASKS OF STRATEGIC MANAGEMENT

• Developing a concept of the business organization
  (hospital district) and forming a vision of where
  the district needs to be headed providing the
  organization with a sense of purpose, providing
  long-term direction and establishing a mission.
• Converting the mission into specific performance
  objectives
• Crafting a strategy to achieve the targeted
  performance
• Implementing and executing the chosen strategy
  efficiently and effectively
• Evaluating performance, reviewing the situation,
  and initiating corrective adjustments
• The completed strategic plan will illustrate the
  organizations vision, mission strategy
  intended to achieve specific performance
  objectives outlined in the plan

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SAMPLE STRATEGIC BUSINESS PLAN STATEMENT

• This ___ (year) Business Plan projects the
  performance of organization for the years of
  2004, ?, ?. The following work plan represents
  the strategy-making and strategy-implementing
  process selected by management to meet the
  priority goals established by the Board of
  Commissioners on date.