Enhancing the Board’s Role in Quality
By Karen Sandrick
Research Examines How Boards Oversee Quality and How They Can Improve
Although most boards believe that the quality of care in their institutions is good, there is a disconnect between what they know to be true from national health care data and what they believe to be true about the quality in their own hospitals, says James Reinertsen, M.D., a senior fellow at the Institute for Healthcare Improvement, Cambridge, Mass. “Boards as a general rule think quality is a lot better in their hospitals than their CEO thinks it is, and certainly a lot better than their nursing staff and inside management staff do,” he observes.
A case in point was the 1994 death of Boston Globe reporter Betsy Lehman within 48 hours of receiving a massive overdose of chemotherapy at Boston’s Dana-Farber Cancer Institute. While the case and the national publicity it generated constituted a wake-up call for Dana-Farber and its board, who vowed nothing like that would ever happen again, it was not considered to be a “canary in the mineshaft” by other hospitals. Reinertsen recalls a colleague telling him about a visit to a well-known institution whose board chair acknowledged that the Lehman case was a tragedy, but asserted that such errors could not happen in his hospital. At this point, the hospital CEO said, “Oh, but they do.” Shocked, the trustee protested, “But you never told us.” The CEO replied, “Yes, I have.” The telling response from the board chair: “But you never told us in a way we could understand.”
Historically, boards of directors have been uncomfortable delving into the quality of care delivered in their hospitals. Trustees can easily wrap their minds around their hospital’s finances because they face the same issues in their own businesses. But they have difficulty coming to grips with health care quality because they aren’t sure what it is.
To lay hospital board members, quality of care is nebulous. If physicians can’t agree on what quality means, how can trustees understand it? The concept of quality is also arcane and couched in mind-numbing statistics, such as the infection rate per thousand line hours (i.e, hours during which central lines have been placed in patients). But public accountability is forcing quality onto the hospital board agenda.
“Boards are keenly attentive to know how their hospital or system is doing on CMS [Centers for Medicare & Medicaid Services] core indicators before they read it in the paper,” says Bryan Weiner, Ph.D., associate professor in the Department of Health Policy and Administration at the University of North Carolina in Chapel Hill. For this reason, CMS and other quality organizations are providing at least some definitions of quality for hospital boards. “While these [definitions] may not be all there is to quality, they certainly are quality indicators the board needs to attend to because the public is attending to them,” Weiner says.
Hospital boards have other types of guidance as well, such as the “Call to Responsibility” (see Trustee’s “Back to Basics,” March 2005) issued by the National Quality Forum, Washington, D.C., in 2004, which sets out principles of quality improvement to which hospital boards should be expected to adhere.
However, Weiner says, “Boards of trustees are still struggling at the individual hospital and the system level to figure out how to bring the same level of discipline and rigor to the quality oversight function that they do to the financial oversight function.”
That is why four hospital systems—Spectrum Health, Grand Rapids, Mich.; Trinity Health, Novi, Mich.; Sutter Health, Sacramento, Calif.; and Sharp Healthcare, San Diego—are participating in a project that seeks to develop practical knowledge about how boards may enhance their role in monitoring quality. The 18-month research project is being funded by the Center for Health Management Research, in partnership with the Health Research & Educational Trust, Chicago.
Headed by Weiner, the project is examining, through in-depth interviews with hospital executives and their staffs, the ways hospitals and their boards monitor quality and leadership. He notes that boards are eager to make quality a high priority once they understand their legal accountability for quality of care. And, preliminary findings have shown that hospital boards can play an effective role in quality oversight and leadership when they have the knowledge, skills and abilities to evaluate the strategic direction of their institution and to monitor performance. But to do that successfully, they must first receive the right information at the right time. Boards can exercise their oversight role when they have enough time to do so, when they can ensure that quality is not crowded out by other issues, and when they have a committee structure that facilitates their work.
Unfortunately, the project also found that board members often do not have enough education to contribute fully to decisions regarding quality. Since the roles of the system and individual hospital boards are still evolving, there is considerable duplication of effort and ambiguity about which board is responsible for what.
While the project—due to release its findings this June—is identifying specific ways hospital boards can enhance their role in quality, it is also illuminating a pair of key underlying issues: how boards hold their CEOs and medical staff leaders accountable for quality; and how they keep an eye on the big picture without sacrificing attention to performance in specific core measures of quality.
Every hospital system in the project ties the CEO’s, medical director’s and even department-level manager’s performance evaluations to quality and quality performance indicators, Weiner says. “It’s not [just] 5 percent of the bonus; it can easily be 20 to 30 percent, which is thought to be big enough to drive this [performance quality dependence],” he explains. The study has not yet identified a best practice for handling variable compensation, however. Weiner believes many hospital system boards are trying to determine how much weight to give to quality in terms of the variable compensation at risk, relative to other executive objectives.
Measuring Quality
System boards are also trying to figure out how many metrics or indicators should be used to calculate the quality component of variable compensation. Some boards are realizing they have too many indicators, Weiner says. A system may be basing 30 percent of variable compensation on quality, but tying quality performance to 17 different metrics. “It is difficult for CEOs to improve 17 things simultaneously, and it is very hard for [them] to decide which ones to focus on,” Weiner points out.
In almost all cases, system boards are using report cards or their own scorecards for performance evaluations, typically attaching colors to different levels of performance. For example, green is used for results in the top decile, yellow for those in the second or third decile, and red for those below that level. At a minimum, most report cards include CMS core indicators because they provide national benchmarks for data. Report cards may also include targets from the Leapfrog Group, clinical professional associations and other groups, which greatly expands the number of indicators to review.
One problem, Weiner says, is that these quality indicators are highly technical and clinically operational—for example, calling for the administration of aspirin within 30 minutes of arrival to a patient with suspected acute myocardial infarction. Indicators also are somewhat limited. For example, CMS core indicator sets concentrate on cardiac conditions and pneumonia, which may constitute only 30 percent to 40 percent of the type of care a hospital provides. Therefore, boards cannot easily get an overall sense of the quality of care provided by their institutions.
“There is no global omnibus measure of quality performance like there is in the financial area,” Weiner says. “So instead of being able to say this is our EBIDTA [earnings before interest, depreciation, taxes and amortization] or ROI [return on investment] and then drill that down to decide how things are going, boards have to look at 20, 30 or 40 indicators at a time, and try to get a sense of how they’re doing from the number of greens and yellows and reds they see on a chart.” This takes a lot of board time, even when presented as a dashboard. “We’re seeing that … most board members feel they aren’t getting enough time to think about future-oriented kinds of activities,” Weiner adds.
This is not to say that board members never get a chance to think strategically about quality. For many boards, quality is just not a topic regularly scheduled for board meeting discussions. Instead, it may come up randomly or be addressed only at an annual retreat. “Board members or executives in a particular hospital or system have expressed some concern that, although the board is very active on [day-to-day] quality oversight and is performing its fiduciary duty in that respect, it’s not getting a chance to engage with executive management about where [the hospital] should be five years from now. Instead, they are looking at how they can get quality performance up in the next six months or the next quarter,” Weiner says.
Division of Responsibilities
The advantage of having lay board members who don’t have health care backgrounds is that their different business and professional experiences inform their discussions with CEOs and the executive team on long-term quality strategies. For that to happen, Weiner believes responsibilities for quality oversight should be clearly divided (and not duplicated) between the system board and hospital boards. For example, the hospital board will usually review CMS quality metrics. But in many institutions, the system board will review them again. That process may be theoretically acceptable because the system board needs to look at quality performance across all of its hospitals. Weiner asks, what is the added value of having the system board review the same material the hospital board is already examining?
System boards should maintain an over-arching perspective on quality, he believes. “[System boards] can see that some hospitals are very active and engaged with their management teams in overseeing and leading in the quality area, and other boards are less so, doing very little, or not doing what they do very effectively,” he says. “A very valuable role for the system board, therefore, is to look at the quality oversight and leadership activities that are happening at the hospital board level and decide what they can do to support them.”
Weiner adds, “One of the distinctive things a system board can do is to help strengthen or enhance the hospital board’s role across the system by identifying and helping to transfer best practices from one board to another. The system board also can help by … instructing management to work with particular hospital boards to reduce the variability in hospital board oversight.”
Boards should serve as the driving force behind all quality efforts in their organizations. “The one thing I’ve heard repeatedly from executives as well as chief medical officers and vice presidents for medical affairs is that they greatly appreciate the role the board can play in creating accountability,” Weiner says. “It allows them to say to physicians on the medical staff or to employees in the hospital, ‘Look, the board wants to see this done. The board wants to see this problem fixed.’ It makes a big difference in their eyes if the board wants to see performance improve. It lends legitimacy to their efforts because they can say, ‘[Trustees] are watching what were doing, so we have to improve.’”
Karen Sandrick is a Chicago-based writer who specializes in health care.
This article 1st appeared in the December 2099 issue of Trustee Magazine.
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