The Challenge

Today’s healthcare leaders are confronted with a plethora of complex, time-sensitive demands for decisions in new and unfamiliar areas, and in a policy environment that is uncertain at best. The imperative for meaningful change is countered by resistance from powerful forces, both internal and external, and growing demands for capital expenditures at a time when financial margins are narrowing.

Investments in new data systems are confounded by resistance from physicians, resentful that time with patients is limited by increasing demands for data entry and handoffs to new and unfamiliar team members. Building a more comprehensive picture of patient populations through application of analytic methods and data sharing across organizations is impeded by proprietary concerns, as well as design inconsistencies driven by the profit motives of data technology firms. The focus on quality of care in clinical settings is complicated by the growing recognition that most of what drives the health of our patients is in the external world and outside our control. Our hospitals are increasingly expected to assume financial risk for reducing the demand for acute care medical services for specific populations, when the bulk of financial rewards are for filling beds and conducting procedures. These challenges are particularly acute for safety net hospitals with high percentages of low-income populations who reside in socially and economically disadvantaged communities.

While a growing number of hospital and health system leaders recognize the need for bold decisions, they report to a board of directors whose competencies and orientation are still driven primarily by the legacy focus on fiduciary stability. Gaining their support for actions that move beyond legacy concerns requires both education and a deeper form of engagement; one in which their input informs strategic decisions as healthcare organizations become involved in improving health and well- being in communities.

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The Imperative for Change
Hospital and health system leaders are faced with perhaps the most significant set of challenges in the history of modern medicine. The sheer scale and scope of change demanded by the shift in financial incentives is daunting. At present, fee-for-service is still the primary form of payment in most markets, and reduced impatient stays and procedures represent lost revenue for hospitals. While the pace varies in different states and regions across the country, there is inexorable movement towards a financial incentive to keep people healthy and out of inpatient facilities. Resources from multiple sources, within and external to the healthcare sector, will need to be shifted to preventing, rather than just treating diseases.

It is no longer sufficient to focus simply on the delivery of the best-quality acute-care medical services. Administrative and clinical leadership must now broaden their scope of analysis and engagement to diverse stakeholders in the communities and regions in which they function. Efforts to strengthen care coordination will have to be expanded to address social determinants such as housing quality, access to affordable healthy foods, and broader environmental conditions. Efforts to manage chronic diseases such as diabetes will have to be expanded to broader community level and policy strategies to reduce its incidence. In general, leaders will need to take bold steps, building internal skills and capacity, establishing new working relationships across sectors, and developing and advocating for policies that contribute to improved health and well-being.

Setting the stage for transformation of the healthcare sector will require changes in the way we do business, and senior leaders will also need boards with the competencies and the depth of engagement necessary to inform and monitor progress. For many organizations, this will require adjustments in both membership and roles. As a starting point in the review of relevant options and their implications for the field, this article will draw from a series of white papers published by the Governance Institute (TGI) over the last five years, as well as a 2006 publication from a TGI series entitled “Elements of Governance”, which serves as a primer on board-senior leadership roles, dynamics, and history. Read the full article here.