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Improving Healthcare Governance in Radical Uncertainty


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Actionable Insight

"Many healthcare organizations continue to pursue a legacy model of Board membership and structure that may be hindering true transformation."

The level of Chief Executive turnover registered in 2016 is among the highest rates calculated over the past two decades, according to the American College of Healthcare Executives. The trend held true in 2017. Given the radical nature of uncertainty and disruptive change facing healthcare organizations, it is critical that executive leaders build resilience and adaptability in governance.

A high functioning, successful healthcare organization will have a governance group that is well informed, diverse, and proactive in a rapidly changing industry landscape. However, many healthcare organizations continue to pursue a legacy model of Board membership and structure that may be hindering true transformation. If we are to ensure sustainable healthcare organizations for our future, healthcare governance must be improved.

Lest one think this is an overstatement, in the November 9, 2017 issue of Becker's Hospital CFO Report, 43 states received an "F" for healthcare price transparency, with Maine, New Hampshire, Maryland, Oregon, Colorado, Vermont, and Virginia the only states with “passing” scores. Healthcare organizations are not changing fast enough to meet customer and societal expectations.

The capability to engage a diverse set of professionals who are genuinely independent, informed, and influential in their unique sphere of expertise (and highly networked beyond geography) has become a crucial governance competency. A capable board of a 21st-century system requires an impatience with, and willingness to let go of, the inefficiencies of the governance models and mentalities of the past. It is good to have influential donors, local leaders, and internal physician stakeholders on a hospital or health system board. However, it is no longer sufficient.

Finding a positive perspective to improve the future remains a critical work. Though not without challenge or potential conflict, here are a few proposed beginning actions (and Board discussion topics) to move toward a governance glass that is half full. In the words of one of my favorite authors, Seth Godin: “If the work is easy, you should worry.”

1. Develop a deep understanding among board members of how a board creates or diminishes value in today's (and tomorrow's) healthcare industry.

Board Discussion: Under our watch, we are either creating value or diminishing value in our organization: how do we know and what data confirms or dispels our opinion? How will we as a board need to change in the next one to three years?

2. Debate the pros and cons of seeking outside board members with specific expertise and competencies.

Board Discussion: Who on the board is fluent and connected in the Internet of Things (IoT), Digital Transformation, Artificial Intelligence/Machine Learning, Augmented Reality, and healthcare Consumer Experience (CX/UX) Design? If no one, how can we become fluent and connected?

3. Debate the pros and cons of compensating board members.

Board Discussion: How do we move away from the deeply embedded tradition of the volunteer board member of the not-for-profit-health system? How might we attract the most competent and connected board members?

4. Seek a higher level of board independence and self-awareness.

Board Discussion: Are we inappropriately influenced by individual interests, opinions of stakeholders with personal agendas, or perhaps limited by closed social networks? What data tells us we are getting it right (or possibly wrong)?

5. Pursue a diverse board composition (age, gender, ethnicity, geography, and industry background).

Board Discussion: Who is responsible for board composition and ensuring diversity? Who on our board sees through the eyes of a Millennial? Who is connected with, and fluent in, evolving healthcare start-up and innovation landscapes both nationally and internationally?

6. Foster a passionate commitment to constructive conflict, self-assessment, and ongoing governance development.

Board Discussion: Are we improving our ability to add value to the organization? Is our evaluation of board members, board structures, and board functions meaningful and actionable? What data supports our answer?


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