Five questions board leaders should be asking themselves in 2016

With the New Year upon us, leaders worldwide are taking stock of the changes necessary to position themselves and their organizations to succeed in 2016 and beyond.

Boards of directors, executives and physicians at healthcare organizations nationwide must address the following five key issues in 2016, and ask potentially difficult questions of themselves:

1. How can we master population health? If the board is not using a population health framework in its decision-making, there will be cognitive dissonance (or worse) between management's recommendations and the board's priorities. Savvy leaders are shifting boardroom discussions by talking about what population health means in their markets and how financial incentives are changing what their organizations must deliver to receive payment.

Clarifying questions boards should ask of themselves:
• Do we understand our community's health status and needs?
• Definitions abound and vary greatly. What does "population health" mean to our organization?
• Are we focused too singularly on inpatient quality performance metrics when a large portion of our business is outpatient?
• How much of our revenue is risk-based or outcomes-dependent rather than traditional fee-for-service?

2. Are we driving down costs and increasing efficiency fast enough? While many hospitals continue to have positive margins, experts predict a steep dive in hospitals' profitability as soon as 2016. Payment models going into effect in 2016, 2017 and beyond simply will not support most hospitals' traditional cost structures. Organizations that haven't done the painstaking work of reducing their costs in advance of the revenue inflection point run the risk of permanently falling behind. Forward-thinking board members are supporting their management teams by addressing cost structures before bottom lines turn red and options become limited. As the saying goes, "no margin, no mission."

Clarifying questions boards should ask of themselves:
• Does the board understand the strategic importance of cost-cutting efforts?
• Are board members standing strong with management as they do the unenviable work of reengineering?
• Is the board prepared for the pushback that may come from physicians, unions, employees and the public as efficiency efforts become widely known?
• Is the board prepared with talking points (if appropriate) on why costs must be reduced today (while we are still profitable) to ensure the hospital keeps its doors open tomorrow?

3. Do we have the right leaders at the table? With the healthcare industry's dramatic transformation underway, now hardly seems the right time to revamp board fundamentals like recruitment, retention and orientation. Boards positioning themselves for a vibrant, strong role in the future of their organizations, however, are doing exactly that. The skills, competencies and characteristics a hospital or system board needs to drive future success are dramatically different than in the past. Given the slow pace at which the typical not-for-profit board renews itself – one or two new members a year – it's going to take a long runway to smoothly transfer leadership to the new generation of trustees.

Clarifying questions boards should ask of themselves:
• How should our recruitment criteria for new board members be different than they were five years ago?
• Is it time to take another look at our list of desired board competencies?
• Do we need to become more structured in our approach to finding the right people to join the board?
• Are we truly doing all we can to build a diverse board that represents the community we serve?

4. Are board members knowledgeable about the issues that matter? Given the key strategic issues boards must address in the next few years, this is no time to leave board education to chance. Effective boards create education plans and check in with board members to ensure they're accessing available resources. There is no magic bullet or single solution to keeping your board abreast of changes in the industry, but having a planned approach is essential.

Clarifying questions boards should ask of themselves:
• What are our board education plans in 2016?
• Are the board education modalities we offer (e.g., conference tuition, magazine subscriptions, in-house speakers on specific issues) effective for our current slate of trustees?
• Are we addressing the topics our board members are seeking to learn about?
• Have we discussed whether continuing governance education requirements and reporting would be a good fit for our board?

5. Has the board embraced physician partnerships as critical to our success? Getting the board engaged with physician alignment activities historically has been a tricky proposition. Lately, however, savvy leaders are realizing that having a board under-involved in these arrangements is fraught with danger as well. Far too many boards are not sufficiently overseeing physician contracting activities, leaving their organizations exposed to Office of the Inspector General investigations, potential Stark violations and other nasty legal and regulatory challenges. Fines for these missteps are easily in the millions of dollars. Boards can be invaluable in steering the organization around the rocky waters of physician alignment if they're educated on the issues, kept informed, and work closely with executive leadership.

Clarifying questions boards should ask of themselves:
• Are board members regularly interacting with physician leaders in meetings and social settings?
• Do board members understand physician perspectives and executive leadership plans for physician alignment?
• Is the board or a delegated committee of independent board members carefully reviewing all physician contracts and medical staff appointments?
• Have our board practices for overseeing physician contracting been updated in the last two years to incorporate new guidance from CMS, the OIG and legal counsel on ensuring the arrangements meet all the safe harbor provisions and legal requirements?

Circumstances vary, of course, so these may not all apply to you. However, as the wise sage (and martial arts movie star), Bruce Lee once said, "A wise man can learn more from a foolish question than a fool can learn from a wise answer."

About Karma Bass:

Karma Bass, co-founder and principal of Via Healthcare Consulting, is a sought-after speaker, facilitator and consultant in the areas of healthcare board governance, strategic planning, philanthropy, health care policy, and board effectiveness. Ms. Bass advises leadership teams of hospitals and healthcare organizations nationwide, facilitating board retreats and guiding difficult conversations among boards, executive management teams and physician leaders.

The views, opinions and positions expressed within these guest posts are those of the author alone and do not represent those of Becker's Hospital Review/Becker's Healthcare. The accuracy, completeness and validity of any statements made within this article are not guaranteed. We accept no liability for any errors, omissions or representations. The copyright of this content belongs to the author and any liability with regards to infringement of intellectual property rights remains with them.

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