ACHE Congress 2015 - Effective Governance During Transformational Healthcare Change - Griffin

Effective Governance During

Transformational Healthcare

ChangeZach Griffin, MBA/MHA

General Manager, The Governance Institute

March 18, 2015

Learning Objectives

• Identify the specific governance challenges

prompted by systemic industry changes

• Explore how governing boards are successfully

responding to systemic industry changes

2

Why is this Topic Relevant?

3

Agenda

• Baseline

– History & Factoids

– Board Stats

– Perspective of the Trustee

• Scan

– Trends

– Challenges

– Three Examples of Boards Adapting/Evolving

• Conclude

– Key Takeaways

– Q&A

4

How Did the “Board” Get Its Name?

5

17th-18th century

England

“Board” of wood

used to eat on “Board Room”

“Board Chair”Benches and a

chair at the end“Room & Board”

Impolite to put

arms under table“Above Board” “Board Game”

Bryson, Bill. ”At Home: A Short History of Private Life.” New York: Doubleday, 2010. Print.

Average Board StatisticsAttribute Average Moving?

Board size

# of physicians

# of females

# of ethnic minorities

Board member age

Board member age limit

# of committees

Meeting frequency

Meeting duration

Have a consent agenda

Have executive sessions

62013, The Governance Institute, Biennial Survey of

Hospitals and Healthcare Systems

Moving?

Average

13.5 people

2.5

3.7

1.3

57.3 years

72.3 years

5

10-12 times/year

2-4 hours

71%

56%

Board Chair Background

7

2013, The Governance Institute, Biennial Survey of Hospitals and Healthcare Systems

Number of Board Committees

8


Most Prevalent Board Committees

• Governance/Nominating (92% of Systems have one)

• Finance (86%)

• Quality and/or Safety (85%)

• Executive Compensation (85%)

• Executive (75%)

• Investment (70%)

• Audit/Compliance (67%)

• Strategic Planning (46%)

9


Average Number of Board Members

10


Number of Board Meetings Per Year

11


Average Board Meeting Time Devoted

to Reports, Strategy, and Education

12


36.8% 16.8%

Changes in Board Structure to Prepare

for Population Health

13


Changes in Board Structure to Prepare

for Value-Based Payments

14


System Governance by Size (# of Beds)

15


Overall Board Performance

16


The Perspective of the Trustee

• Accountable for all outcomes – quality, financial,

clinical, patient satisfaction, charitable contributions

• Three main jobs – policy making, decision making,

oversight

• Strategy not operations – not always natural or easy

• Learn healthcare and then keep up

• CEO hiring and evaluation

17

The Trustee Reality

• Healthcare is complicated

• Most board members are non-clinical and do/did not

have careers in healthcare

• It is hard running a multi-million/billion dollar

company with volunteers (12% of boards

compensated, 75% < $10k/yr)

• Right now is the slowest pace of change in

healthcare we will all experience

18

Shifting Trends

• Physician Relations

–Referring vs. employed

• Healthcare Reform

–New regulations, new rules, new models, new

patients

• Consolidation

–Systems, board hierarchy, portfolio mentality

19

Physician Relations

• More physicians on the board

• More physicians on the payroll

• New models needing clinical knowledge at the

board table

– Clinically Integrated Networks (CIN)

– Accountable Care Organizations (ACO)

20

Healthcare Reform

• Payment reform - volume to value, risk contracts

• Care models - CIN, ACO

• Transparency - quality outcomes, community

benefit

• Triple Aim aspirations

21

Consolidation

• “Systemness” - a different way of thinking

– Portfolio management mentality

– Scale resources and leverage size

• Merge, Partner, Acquire pick one

• Board hierarchy

– System, regional, hospital, other

– New roles, powers, alignments, and expectations

22

Trends Shaping Healthcare Priorities

1. Physician Engagement: Partners with Aligned Incentives

2. Revenues, Operating Costs, and Financial Sustainability

3. Care Model Redesign and Clinical Integration

4. Employer Exchanges and Health Plans

5. Competitive Positioning: Consolidations, Affiliations, and Partnerships

6. Information Technology: Supporting New Care Models

7. Transparency and Accountability

8. Workforce/Culture of Accountability

9. Population Health Management: Easier Said Than Done

10. Governance

23

Masters, Guy M; Valentine, Steven T. “Ten Trends That Will Shape Healthcare Strategic Prioities in 2015.” E-Briefings. Jan 2015.

Governance Trends

1. Ensuring business judgment rule protection

2. Risk oversight

3. Director time commitment

4. Strategic planning

5. Board composition

6. Committee effectiveness

7. Talent development

8. Cybersecurity and governance

9. Tenure refreshment

10. General Council and Chief Compliance Officer coordination

24

Peregrine, Michael W. “2015 Governance Trends for Non-Profit Hospital and Health Systems.” Governance Notes. The Governance Institute, Feb. 2015.

Agenda & Time Check

Baseline

History & Factoids

Board stats

Perspective of the Trustee

Scan

Trends

Challenges

– Three Examples of Boards Adapting/Evolving

• Conclude

– Key Takeaways

– Q&A

25

Three Examples of Boards Adapting

26

Schummers, Dan F. “Governance across the Continuum: Leadership Accountability for Creating Healthy Communities.” Signature Publication.

The Governance Institute, June 2014.

• Hospital and Health System accountability expands beyond

quality and safety of care delivered to overall health of

community

• Reimbursement models shifting from fee for service to risk

assumption for defined populations

• Gravitational pull moving center of healthcare experience to

non-hospital based care

• Organizations are achieving success, however, no ‘one

size fits all’ approach generating success

Why Focus on Community Health?

27

Common Focus and Success Measures

• Role of Healthcare Board

– Prioritize mapping of Community Health Needs and

Community Health Assets

– Identify linkages between Community Assets and design

new methods of collaboration

– Unite disparate elements within a community towards

common goal of health

28

Health Partners

• Largest consumer governed not-for-profit healthcare

organization in US

• 1.5 million members

• CareGroup of 1,700 providers (750 PCPs)

• 6 hospitals owned

• 1 hospital joint venture

• Serving Minnesota and Western Wisconsin

“We seek to improve health and well-being in partnership with

our members, patients, and community.”

29

Health Partners Perspective

• Crossing the Quality Chasm & Triple Aim created “seismic

shift” & provided “framework going forward”

• Personalized healthcare experience of CEO Mary Brainerd

compels drive to patient centered system

• Culture of continuous quality improvement

• Decision to transform both operations and culture to

achieve goals

30

Transforming Governance to Attain Ends

• Health Transformation Committee

– Estimate goals for care and health transformation

– Develop appropriate measures of success

– Collaborate in learning with senior leadership

– Embed goal of system transformation into culture of organization

“To hold a whole organization accountable for results, the board

really needs to know—and have a role in determining—how we

are making the changes.”

Mary Brainerd, CEO, HealthPartners

31

Role of Local Boards in Expanding System

• Importance of aligning around a common mission and

vision

• Expansion is a way of bringing vision into communities in

which it exists

• Local experience and wisdom from community trumps fear

of change resistance / conservative nature

• Local board’s role essential for health of their community

• Elevate local trustees to assume greater responsibility,

aggressive goals & track metrics

32

Partnership, Listening & Learning

• Expansion is a means to executing the Triple Aim and

fulfilling mission

• Formal partnerships “inflection points along continuum of

collaboration and partnership”

• Local board’s role to “speak up” and advocate for

community

• Structure must follow strategy

33

Genesys Health System

“Genesys will be recognized as the premier, values-based healthcare system in the region by focusing on the needs of people in their pursuit of health and well being.”

• GRMC ‘Anchor’ Hospital

• Home Health, Hospice

• Ambulatory Care Centers

• Athletic Center

• Physician Hospital Organization

• Serving Central Michigan

34

Genesys Health System Perspective

• Community healthcare services matched pace with General Motors

• 1990s “Severe life altering change” – From 80,000 employees to < 8,000

– Consolidation of 4 hospitals into 1 new build

– Formation of Genesys Health

– Joining with Ascension Health

• Decade to absorb impact of traumatic change and “let the dust settle”

• Change resilience: Commitment to move out of silos and become true health system

35

• Building a common vision

– Representatives from community, physicians & smallnumber of hospital executives

– Executives are ‘stewards’ of new asset

– Collaborate to create 25 year vision for hospital, system and community

• Role of board and leadership

– Disseminate new vision across system

– “Chipping away at it every quarter”

– Understanding and alignment spread organically

Creation of a True Community Asset

36

• Board’s view of its fiduciary responsibility must expand– “Move beyond myopia of the hospital as central to the health

system”

• Increasing provider engagement and representation on the board to enrich deliberation

• Ensuring community board members don’t “abdicate” responsibility to new provider trustees

• Community Health Needs Assessment and Advocacy Committee – Members drawn from leaders of free clinic, FQHC, fitness center,

locals schools, colleges, etc.

– Partners in understanding unique needs of community

Vision & Governance Outside of the Hospital

37

• Leverage data driven understanding of community health needs to participate or lead multi-sector health alliances

– Effect change

– Insight to larger community view of health needs and assets

– Share knowledge with participants

– Build relationships

• Greater Flint Health Coalition

– Tackling community health issues e.g. smoking bans, caesarean rates, diabetes, etc.

– Deploying best practices e.g. Respecting Choices®

– Managing cost: FQHC and PCMH to manage ED volume

Leadership in Community Alliances

38

“Nobody here ever thought that GM could go bankrupt

and yet that happened. So it sets this mindset of

‘don’t resist change, lead it,’ because it can be

devastating if you aren’t paying attention to what’s

going on and aren’t continuing to reinvent yourself.”Betsy Aderholdt, CEO, Genesys

39

Bellin Health

“The people in our region will be the healthiest in the nation.”

• 167 bed hospital

• BMG 90 PCPs

• In and Outpatient psychiatric services

• Fitness, sports medicine & rehabilitation

• Home Health

• Bellin School of Radiologic Technology

• Bellin Health FastCare

• Serving Green Bay and surrounding areas

40

Bellin Health Perspective

• 2000 increased competition in market triggers cuts to services and positions

• 2002 forecasted 30% increase in employee health coverage cost

• No clear understanding of what was driving cost and where opportunities for improvement lay

“We realized we needed to get better information about the way we were spending the dollars, and we also realized that people using the health benefit needed to be more invested in the benefit, be more invested in their own health.”

George Kerwin, CEO, Bellin Health

41

• Health Risk Assessment for every employee

• Senior leadership conducts frequent conversations to explain ‘why’ & ‘importance’ for employees and system

• Created system for premium discounts tied to HRA scores

• Discounts provided to employees and spouses for tests and screening

• Push to get all employees engaged in primary care and preventive services

• Outcome: 33% reduction in health costs in 2 years– Improvement in HRA scores

– $13 MM savings in first 8 years

Providing Direction Through Data

42

• Model addressed health needs of community & needs of

local business owners to manage health cost

• “Business Health Solutions”

– Consumer driven health plan, onsite services, HRA, employee

incentive structure, etc.

– 2,500 companies partner with Bellin

– Employer costs 20% lower than national average

Spreading Success Into the Community

43

• ‘Bellin Corporation’– 60 members, cross section of community & providers, includes

past trustees

– Talent bench for board recruitment

• Longevity valued in board and senior leadership

• Avoid stagnation through continued education

• “Common Past” facilitates risk taking by shifting focus to long term gains– Approach to M&A

– Expansion of primary care network

Building Board Strength Through

Experience & Consistency

44

• Most important change to Board composition was increase in patient and family members– Contextualize what a healthy community could be

– Share strategies, imagine and design ways to link health assets to community needs

• Family physician members trained in terms of managing people and keeping them healthy

• Business community members have unique understanding of health impact on economics and needs of community to improve health of workers

Evolving Composition of Board

45

• Integration of community health into the Mission and Vision to guide your future decisions

• Assessing broad community health needs and assets to prioritize your initiatives

• Healthcare and governance remain local, even in era of consolidation, leverage those with roots in community (patients, providers and business owners)

• Objective measures of community health impact must be selected, measured and shared with local health partners for Board to hold leadership accountable

• Know how and when to use your brand; when to lead from the front v. facilitate and participate with community health stakeholders for the betterment of those you serve

• Board fosters a culture accepting change, promoting courage in uncertain times and ensuring alignment to Mission and Vision.

Lessons From Our Three Examples

46

Key Takeaways

• Board Rooms as important as Operating Rooms

• “Board”, “Board Room”, “Board Chair” origins

• Average Healthcare Board stats

• Trustee perspective & reality

• Healthcare and governance trends

• Boards aligning to community health

– HealthPartners, Genesys, Bellin

• Adapt, Evolve, Stretch

47

Agenda & Time Check

Baseline

History & Factoids

Board stats

Perspective of the Trustee

Scan

Trends

Challenges

Three Examples of Boards Adapting/Evolving

Conclude

Key Takeaways

– Q&A

48

Contact Information

Zach Griffin, MBA, MHA

General Manager, The Governance Institute

(a service of National Research Corporation)

Phone: 1-877-712-8778

Email: [email protected]

www.governanceinstitute.com

www.nationalresearch.com

49

mailto:[email protected]

http://www.governanceinstitute.com/

http://www.nationalresearch.com/

Bio: Zach Griffin, MBA, MHA

Zach is General Manager of The Governance Institute, a service of National Research

Corporation.

The Governance Institute provides trusted, independent information and resources to

board members, healthcare executives, and physician leaders in support of their efforts

to lead and govern their organizations. Zach began his career as a Management

Consultant at Ernst & Young, and has worked for industrial conglomerate 3M and

information technology focused Thomson Reuters in a variety of strategy, marketing,

and product development roles.

Zach received a Bachelor of Science degree from the University of Iowa in Mechanical

Engineering and later earned a Masters degree in Business Administration (MBA) at

Indiana University and a Masters degree in Healthcare Administration (MHA) at the

University of Washington. Zach and his wife Dana live in Seattle with their two sons

and dog.

50

Bibliography

• Bryson, Bill. ”At Home: A Short History of Private Life.” New York: Doubleday, 2010. Print.

• Frakt, Austin. "In Hospitals, Board Rooms Are as Important as Operating Rooms." The New

York Times. The New York Times, 16 Feb. 2015. Web. 19 Feb. 2015.

• The Governance Institute. “Governing the Value Journey: A Profile of Structure, Culture, and

Practices of Boards in Transition - 2013 Biennial Survey of Hospitals and Healthcare

Systems” Signature Publication. Fall 2013.

• Masters, Guy M; Valentine, Steven T. “Ten Trends That Will Shape Healthcare Strategic

Prioities in 2015.” E-Briefings. Jan 2015.

• Peregrine, Michael W. “2015 Governance Trends for Non-Profit Hospital and Health

Systems.” Governance Notes. The Governance Institute, Feb. 2015.

• Schummers, Dan F. “Governance across the Continuum: Leadership Accountability for

Creating Healthy Communities.” Signature Publication. The Governance Institute, June

2014.

51

ACHE Congress 2015 - Effective Governance During Transformational Healthcare Change - Griffin

Documents

Transcript of ACHE Congress 2015 - Effective Governance During Transformational Healthcare Change - Griffin