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					Board of Commissioners
   ORIENTATION

 Presented by the Lakes Group




                                1
                    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 district’s mission
  and vision
• To provide access to resources that can help
  answer commissioners’ legal, regulatory or board
  effectiveness questions

                  The Lakes Group, Kirkland WA         2
    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.
                 The Lakes Group, Kirkland WA       3
   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
                The Lakes Group, Kirkland WA   4
  BOARD TIME SPENT ON CORE FUNCTIONS

        TYPICAL                                    BALANCED
Finance: 40%                                  Finance: 20%
Operations: 35%                               Operations: 10%
Credentials: 5%                               Credentials: 10%
Quality & Service: 5%
                                              Quality & Service: 25%
Strategy: 5%
                                              Strategy: 30%
Other: 10%
                                              Other: 5%
Source: Pugh, Ettinger & McCarthy,
   MGMA October 2001

                              The Lakes Group, Kirkland WA             5
 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%
                 The Lakes Group, Kirkland WA         6
            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 issues—
  a 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


                             The Lakes Group, Kirkland WA                7
      COMMANDMENT OF GOOD
      GOVERNANCE: THE BOARD
             WILL…
• Keep up-to-date on the organization from an external
  viewpoint…maintain 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
                      The Lakes Group, Kirkland WA                 8
    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


                                The Lakes Group, Kirkland WA         9
COMMUNITY REPRESENTATION AND
    THE EFFECTIVE BOARD
Richard Umbdenstock, the author of So You’re 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”.
               The Lakes Group, Kirkland WA    10
SUCCESSFUL BOARDS HAVE EXPECTATIONS
         OF THEIR MEMBERS:

A few illustrations:
• Board and committee preparation, attendance &
  participation
• Education (Local & State—also 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
                                 The Lakes Group, Kirkland WA         11
ENHANCING BOARD
EFFECTIVENESS AS A
     WHOLE



     The Lakes Group, Kirkland WA   12
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 organization’s 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



                     The Lakes Group, Kirkland WA           13
            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 Board’s and Management’s time
• Confusion about roles, responsibilities and relationships
  with management, the medical staff, committees and other
  Boards

Source: Systems Thinking in Governance, Adapted “Trustee”January 1999



                             The Lakes Group, Kirkland WA               14
          ASSESSING THE NEED FOR
        CHANGE:BOARDS 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 management’s 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


                                 The Lakes Group, Kirkland WA         15
    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?




                     The Lakes Group, Kirkland WA         16
Sample Table of Contents: Frontier Hospital
           Community Survey




             The Lakes Group, Kirkland WA     17
             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 CEO’s 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 Board’s standards?
 Self: the extent to which the Board is fulfilling its responsibilities and
   executing its roles

                           The Lakes Group, Kirkland WA                    18
        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 Board’s role of steering, not rowing the ship:
  Keep a balanced view of the organization’s 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).

                      The Lakes Group, Kirkland WA              19
 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

                             The Lakes Group, Kirkland WA   20
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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



                         The Lakes Group, Kirkland WA                  26
                   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 2001:2




                                         The Lakes Group, Kirkland WA   27
Comments on Client Board Minutes (dates
             reviewed)




            The Lakes Group, Kirkland WA   28
               Sample Board Agenda to Consider


1.   Call to Order
2.   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/Staffing etc)
     E. Performance Improvement Activities
     F. Other
3. Consent Agenda:
     A. Vouchers & Warrants
     B. Write-offs
     C. Other

                          The Lakes Group, Kirkland WA                    29
               Sample Board Agenda to Consider
                         Continued


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




                         The Lakes Group, Kirkland WA              30
            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?

                    The Lakes Group, Kirkland WA          31
          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 us—”If you can’t say
  something nice, don’t say anything”



                      The Lakes Group, Kirkland WA            32
            EFFECTIVE MEETING TIPS #1

BOEING’S 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 attention—avoid 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 team’s (board’s)
  progress/success

                        The Lakes Group, Kirkland WA               33
        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?

                    The Lakes Group, Kirkland WA           34
                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

                      The Lakes Group, Kirkland WA            35
                  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.

                    The Lakes Group, Kirkland WA           36
               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
  receiver’s 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?”

                    The Lakes Group, Kirkland WA         37
                COMMUNICATIONS:
 Administrator, Board & Medical Staff Leadership

• Can the Board be “wired” for flow of information?
• Identify Board and Medical Staff’s 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?

                     The Lakes Group, Kirkland WA          38
             BOARD/ADMINISTRATOR
                RELATIONSHIPS

Washington law is quite clear in requiring the elected board
 of commissioners to oversee the hospital district’s general
 policies and organization. To fulfill this obligation, the
 board’s 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 Commissioner’s
       Guide

                     The Lakes Group, Kirkland WA           39
The Lakes Group, Kirkland WA   40
           BOARD/ADMINISTRATOR
              RELATIONSHIPS
• It is the board’s responsibility to communicate
  effectively, frequently and candidly with the
  administrator/CEO---the administrator/CEO’s
  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


                     The Lakes Group, Kirkland WA        41
           BOARD/ADMINISTRATOR
              RELATIONSHIPS
   A study done by the authors of “Practical
   Governance” several years ago revealed that 1 in
   10 administrators had never received a
   performance appraisal—one of the key factors
   hindering completion of the performance appraisal
   was “the lack of clarity or agreement over the
   organization’s vision, goals & priorities linked
   with a failure to define administrator roles &
   responsibilities.”
SOURCE: PRACTICAL GOVERNANCE, Tyler & Biggs


                        The Lakes Group, Kirkland WA   42
         BOARD/ADMINISTRATOR
            RELATIONSHIPS
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”


                    The Lakes Group, Kirkland WA              43
   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 turnover—if there is an unplanned departure,
  it is often related to an ineffective CEO evaluation
  process”—Barry Bader, President, Bader & Assoc.
• Governance experts recommend that hospitals link CEO
  incentive compensation plans to the outcome of the formal
  evaluation process—The Governance Institute

                     The Lakes Group, Kirkland WA          44
         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

                 The Lakes Group, Kirkland WA     45
          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@verizon.net

                    The Lakes Group, Kirkland WA   46
Miracle Slide




 The Lakes Group, Kirkland WA   47
Why Strategic Planning?

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

          The Lakes Group, Kirkland WA   48
 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


                       The Lakes Group, Kirkland WA                    49
       The “hospital” is not the
              Business
Past discussions by hospital CEO’s 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.
                   The Lakes Group, Kirkland WA       50
              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
   organization—these businesses need to become the basis for the organizational
   structure. Don’t rely on instinct-- use data to identify and confirm the+20%!
• 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?

                            The Lakes Group, Kirkland WA                        51
         THE FIVE TASKS OF STRATEGIC MANAGEMENT


1.   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.
2.   Converting the mission into specific performance objectives
3.   Crafting a strategy to achieve the targeted performance
4.   Implementing and executing the chosen strategy efficiently and
     effectively
5.   Evaluating performance, reviewing the situation, and initiating
     corrective adjustments
The completed strategic plan will illustrate the organization’s vision,
     mission & strategy intended to achieve specific performance
     objectives outlined in the plan

                          The Lakes Group, Kirkland WA                  52
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.

                The Lakes Group, Kirkland WA    53

				
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