Trustees are accountable for ensuring that continuous quality improvement processes are in place throughout their health care organization. But, as the board sets direction during this period of dramatic change and payer, government and media scrutiny, it must first implement and develop its own continuous quality improvement system. Trustees must be able to determine when and where the board is underperforming in relation to the challenges it faces, and hold themselves to the same level of accountability for quality and improvement to which they hold the entire organization.
A governance performance assessment is an organized, quantitative and qualitative evaluation of the board’s satisfaction with all aspects of performing its governance responsibilities. It calls for an introspective examination of the governance environment, processes, focus and performance, and trustee ideas and recommendations for change to improve the board’s leadership performance. The combination of an assessment and the resulting improvement plans help the board to identify critical governance gaps and resolve them to achieve and maintain leadership excellence.
Identifying Key Areas
As health care evolves, the board’s performance assessment also must evolve. Boards should make assessing their governance strengths in the following areas a high priority.
Health care reform. Knowledge of the Affordable Care Act — its objectives and the forces and trends it has set in motion — is essential. Trustees need a thorough understanding of new payment methodologies, such as value-based payment, readmission penalties, accountable care organizations and other risk-based arrangements, as well as the implications for their own organization.
Clinical knowledge and understanding. As the field advances to improve care coordination, delivery of services, quality and safety, and cost reduction, many boards ensure that non-employed physicians, nurses and other clinicians contribute to organizational success by serving as trustees as long as there are no conflicts of interest. And while community board members don’t need to be clinical experts, they must be willing to develop a working understanding of clinical care issues, which will ensure well-informed inquiry, discussion and oversight.
Leadership of complex organizations. Payment methods, regulations, competition, consolidation and other factors require thoughtful, innovative thinking from trustees to assist hospital administrators and medical staff leaders. Members of high-performing boards must be able to discuss complex issues and consider multiple scenarios and their potential impact on the organization.
Systems thinking. As mergers, acquisitions, partnerships and joint ventures continue to proliferate, achieving the new organization’s mission and vision depends on the new board’s competencies and expertise. However, trusteeship should not be representational, with board members remaining loyal to their legacy organization’s interests. Board thinking must move from siloed thinking to coordinated or integrated thinking, to thinking in a unified or cohesive manner.
Community needs. Understanding and responding to community health needs always has been a priority for hospitals and health systems, and the ACA has further elevated its importance. Trustees must understand the requirements for conducting community needs assessments and developing collaborative plans with community partners to address their community’s most pressing health care needs.
Cultural competency. As a part of their fiduciary accountability for mission, vision, values and strategic focus, trustees must ensure that the organization’s leaders, workforce and the board itself reflect the diversity of the community. They should promulgate organizational policies and practices that demonstrate leadership in and support for cultural competency and make cultural competency an active component of the organization’s operations.
Visionary and strategic planning. The board is responsible for developing meaningful, actionable strategic vision and direction and for allocating the resources required by management to carry out the approved direction. Members of high-performing boards understand (and are willing to challenge, when necessary) the assumptions underlying the strategic direction, and provide leadership for change when market realities emerge.
Using Results as a Catalyst
Conducting a self-assessment is only the first step toward improving governance performance. How the board responds to the results determines its success. Assessment results should be a catalyst for a wide-ranging, outcomes-focused discussion of findings that highlight performance gaps and areas in which trustees may lack consensus about the board’s performance in critical areas.
While the majority of boards use an assessment to create an action plan to improve board, trustee and committee performance, the American Hospital Association’s 2014 National Health Care Governance Survey Report revealed that one-fourth of boards either did not use the results for improvement or did not know how they used the results. In addition, the survey found that most hospitals did not use their assessment results to determine whether trustees should be reappointed for additional terms.
Boards that do not maximize their self-assessment process neglect a significant opportunity to strengthen governance leadership at a time when it is needed the most.
Making the Most of the Assessment
The assessment process should be anonymous, measurable and reportable, and it should identify critical board-building challenges. The most important step is using the results to drive a focused leadership improvement plan.
• Focus on crucial areas. To ensure that the board is prepared for its most critical responsibilities, identify the leadership areas that are most relevant and important to success and focus assessment criteria in those areas.
• Make the process easy. Conduct the assessment in a manner that will result in 100 percent participation from the board. For most organizations, administering the assessment via an online survey is the best method. For others, personal interviews, focus groups or a real-time assessment conducted during a special board meeting may be the best solution. Using measurable criteria will help to guide the board toward performance improvement areas.
• Develop an action plan. A definitive governance improvement plan with specific initiatives, responsibilities, time frames and projected outcomes should be developed and implemented.
• Don’t make it a one-time event. The assessment should be a central part of a continuous improvement process. Performance benchmarks should be established using the results of the initial assessment, and improvement should be measured annually.
Whatever is done well at the board level cascades throughout the organization. Assessments, when done right, will help to ensure successful governance to steward the organization toward greater success in spite of environmental change and uncertainty. — N.M. and C.F.