Board Development and Leadership: The Road to Performance Management
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Transcript of Board Development and Leadership: The Road to Performance Management
Board Development and Leadership:The Road to Performance ManagementTerry Hill, Executive DirectorRural Health Resource Center
Duluth, Minnesota
Technical Assistance & Services Center (TASC)
• Federally designated resource center
• Funded by HRSA’s ORHP
• Supports Flex Program/CAH implementation in 45 states
• Located in Duluth, Minnesota
Current Federal Contracts
• Technical Assistance & Services Center (TASC)
• Small Hospital Improvement Program (SHIP)
• Delta Rural Hospital Performance Improvement (RHPI)
• Rural HIT Project
• Rural Hospital Education
Developing PerformanceImprovement Projects
• Medicare Flex Program emphasis on Quality & Performance Improvement
• Performance improvement/BSC initiatives underway in most states
• Supported by state offices, QIOs and hospital associations
State CAH Performance Improvement Projects
Mississippi Delta Rural Hospital Performance Improvement Project
• 120 hospitals in 8 state region
• Components
- Comprehensive performance assessment
- Targeted performance and strategic planning initiatives
- Balanced Scorecard initiatives
State CAH Performance Improvement Projects
Nebraska P.I. Initiative
• 32 hospitals in BSC initiative
• CAH Executive Leadership initiative
State Balanced Scorecard Initiatives- Alaska - Hawaii- Pennsylvania - Oklahoma- North Dakota - Arkansas- Montana - Illinois- Missouri - Kansas
What We’ve Learned
• Hospitals often operate in a crisis management mode and don’t think strategically
• Strategic planning is done but strategy execution is not maximized
• Most rural hospitals lack ongoing board leadership and management education
• CAHs are already collecting much information
CAH Data CollectionStrategic Purpose
Data Collection
Data Reporting
Data Analysis
Typical Effort
Desired Effort
• Hospitals make significant investments in collecting data for regulatory or accreditation purposes, which limits the value.
• The goals are to push the Effort Curve to the right.
Action Steps
Data -------------Information
“Even small health care institutions are complex, barely manageable places…large health care organizations may be the most complex organizations in human history.”
~ Peter Drucker
In the years ahead…
• Rural health organizations will undergo profound change:
– To meet new consumer and payer demands
– To implement HIT
– To be successful in P4P and new insurance models
• This profound change and increasing complexity will require performance management systems
Performance Management Definition
“A set of processes that help organizations optimize their overall performance. It is a framework for organizing, automating and analyzing methodologies metrics, processes and systems that drive business performance…
Performance management is seen as the next generation of business intelligence, and helps businesses make efficient use of their financial, human, material and other resources.”
- Wikipedia.org
Performance Management Definition
“A framework for getting people, processes and resources aligned and moving in the same direction to achieve strategies that benefit the customer and the bottom line and result in organizational excellence.”
- RHRC
Performance Management Systems
Performance Management Systems have 3 distinct dimensions:1. Strategies- Make strategy the central
organizational agenda
2. Focus and Alignment- Have resources and activities aligned with strategies
3. Organization- Provide the logic and architecture to link all departments and employees behind strategies.
Kaplan and NortonHarvard Business School
The Journey to Performance Management
• Quality Assurance
• Quality Improvement
• Performance Improvement
• Performance Management
Performance Management Framework
a) Studor Pillars
b) Balanced Scorecard
“It is rare to find companies without some form of balanced Scorecard. The difference is that more organizations now understand that the balanced Scorecard is a strategic management system, not just measurement. Strategy maps are the catalyst for that shift.”
--James Creelman, Senior Research advisor, the Hackett Group
System for Managing Performance and Change in Rural Hospitals
Understanding the Balanced Scorecard
“A successful Balanced Scorecard program starts with a recognition that it is
not a metrics project…IT’S A CHANGE PROCESS”
Robert KaplanBalanced Scorecard Collaborative’s
Government Summit. Sept. 2004
RWHC Eye On Health
"OK. I understand a lot is going to change. But how do I stay the same?"
RWHC Eye On Health
"OK. I understand a lot is going to change. But how do I stay the same?"
RWHC Eye On Health
"OK. I understand a lot is going to change. But how do I stay the same?"
The Power of the Balanced Scorecard
Understanding the Balanced Scorecard
• It’s more than most people realize- Not just a measurement system
- Not primarily about the four “quadrants”
- Not primarily a benchmarking tool
• Proven Best Practice for achieving strategies and breakthrough results
• Successfully adapted for Rural Hospitals
“The Balanced Scorecard is a framework that helps organizations put
strategy at the center of the organization by translating strategy into
operational objectives that drive both behavior and performance”
The Balanced Scorecard Collaborative, 2004
Definition of the Balanced Scorecard
Top 5 Reasons to Implement the BSC
1. Provides Focus
2. Creates alignment of resources and strategy
3. Makes strategy “real”
4. Facilitates organization-wide communication
5. Tells an organizational story
Brief History of the BSC
Strategic Management
HarvardBusinessReviewArticles
BSC Perspective
Financial
Customer
Internal Business Processes
Learning & Growth
PerspectivePerspective Key QuestionKey Question
As financial stakeholders, how do we intend to meet the goals & objectives in our hospital mission statement?
As customers of our hospital’s services, what do we want, need or expect?
As members of the hospital staff, what do we need to do to meet the needs of our various customers?
What type of culture, skills, training and technology are we going to improve in order to support our key processes?
HIT Valley of Despair
Choices, Planning, Execution
Determines extent of Slide
Leadership and Management
Determines how long you’re in the valley of despair.
Good Choices and
management determines
level of productivity and
satisfaction
Little or No HIT
Implement EHR
Implemented and Supported
Pref
erre
d Fu
ture
Possible Future
Time
Pro
duct
ivity
HIT Theme Strategy Map
Increased cost efficiency
Increased market share
Finance
Increased revenue
As financial stakeholders, how do we intend to meet the goals and objectives in the hospital’s Mission
Statement?
Patient safety outcomes
Physician satisfaction Patient satisfaction
Increased margin to fund mission
Community health outcomes
Customers & Community
Internal Processes
Learning & Growth
As customers of the hospital’s services, what
do we want, need or expect?
As members of the hospital staff, what do we need to do to meet
the needs of the patients and healthcare
community?
As an organization, what type of culture, skills, training and
technology are we going to develop to support
our processes?
Clinical processes
Acquire HIT expertise
Ensure a skilled workforce
Business processesOperational processes
Establish an empowering work culture
LeadershipInstill change management
Acquire needed HIT systems
Ongoing education
System for Sustaining Performance and Change
2. Empowering Culturea. Change orientedb. Customer Centeredc. Collaboratived. Designed for retention
3. Ongoing Educationa. On siteb. Online
Systems for Sustaining Performance and Change
4. Skilled Workforcea. Nurses and techniciansb. Medical Staffc. IT expertise
5. Ongoing Process Improvementa. Clinicalb. Businessc. Operations
6. Leadership Developmenta. Boardb. Executivesc. Middle Managementd. Physicians
7. Technologya. HITb. Medicalc. Management and Systems
8. Partnershipsa. With physicians/cliniciansb. With other hospitals and health providersc. With the Communityd. With educational institutions
9. Access to Capitala. For improvements to plantb. For investment to infrastructure
10. Outside Technical Expertise
Systems for Sustaining Performance and Change
On-Track to Performance Improvement
The Board’s Role in Performance Management
-Often overlooked
-Crucial to long range success
-Will require investments of time and resources
Seven Deadly Sins of Ineffective Governance
1. Lack of mission, vision, strategies and focus
2. Resisting change and failure to make strategic investments
3. Making do with irrelevant, useless information
4. Lack of hospital board and management alignment
5. Hiring unqualified or ineffective leaders
6. Failure to spend meeting time on strategic priorities
7. Inability to understand or relate to physicians
Start with a plan• Recruit motivated people with needed skills
• Nominating search committee
• Develop selection criteria
• Consider conflict of interest
Board Member Selection
Effective Use of Consent Agenda
Consent Agenda:– The process of grouping routine items
into one agenda item for a single vote, aimed at saving valuable time for critical issues.
Pros:- Frees time for focus on what is important
strategically and operationally
- Much more rewarding experience for members
Effective Use of Consent Agenda
Cons:- Places responsibility (and risk) on members
doing their homework before meetings
- Non-board members can perceive “railroad”
- Requires more work upfront
- Can be counterproductive if members are reading advanced materials during the meeting
Acceptable Consent Agenda Items
1. Committee minutes and reports
2. Board minutes
3. Financial statements
4. Operating statistics
5. Quality reports
6. Medical staff reports and minutes
7. Medical staff credentialing and appointments
8. Management/CEO reports
9. Resolutions (background information in advance)
Source: Jim Stokes
Source: Jim Stokes
Source: Jim Stokes
Source: Jim Stokes
Source: Jim Stokes
“Even if you’re on the right track,you’ll get run over if you just sit there.”
- Will Rogers
Terry J. Hill, MPAExecutive Director,
Rural Health Resource Center
600 E. Superior St., Suite 404
Duluth, MN 55802
218-727-9390, ext. 232