Academic journal article Frontiers of Health Services Management

Board Governance: Reform-Driven Transformation and Reexamination of Fundamentals

Academic journal article Frontiers of Health Services Management

Board Governance: Reform-Driven Transformation and Reexamination of Fundamentals

Article excerpt

HEALTHCARE HAS NEVER been a slow-moving industry, yet it is currently experiencing a transformation unlike any we have ever seen. No doubt we will one day look back on this time as profoundly historic. Healthcare systems, hospitals, and other providers are dismantling current models and redesigning care delivery to manage the health of populations, while also improving quality and safety and controlling costs, even as reimbursements are shrinking.

These are daunting challenges that require not only transformational governance involving new approaches and ways of thinking, but also réévaluation of governance fundamentals and principles to determine whether they still fit.

Texas Health Resources, like Chilton Medical Center in New Jersey and Presbyterian Healthcare Services in New Mexico, has chosen to embrace these challenges, not only in terms of its strategies for healthcare delivery but also in its approach to governance.

In their feature articles, Deborah Zastocki, FACHE, and James Hinton present compelling descriptions of the rapidly changing healthcare environment. Hospitals and health systems are being pushed by reform-driven imperatives to redesign healthcare delivery to provide population health, clinical integration, and accountable care across the continuum of the life span. Consumers and employers are emerging as the purchasers of healthcare services. They assume that quality, patient safety, and value are the price of entry and view competitively lower healthcare costs as their primary driver for healthcare decision making.

The challenge is that health system and hospital competencies are predominantly in acute care delivery in an emerging world that also requires expertise in wellness, chronic disease management, post-acute care, palliative care, and end-of-life care. As providers endeavor to build, buy, or partner for the rest of the continuum, new competitors are emerging in commercial payers, employers, physicians, and venture capitalists. As disruptive innovation becomes a driving force, the reimbursement system has not yet evolved to pay for care delivery redesign or innovation, and the transition from volume-based care to value-based care continues to take place.

Most leading healthcare systems and hospitals across the country see the need to transform to meet these challenges. So why is there not a corollary healthcare governance transformation occurring as well? As Deborah Zastocki states, "The challenge is that our toolbox does not contain what is needed to build the future healthcare delivery systems required in the post-reform world." Having built an effective governance structure and infrastructure that have worked well in the past is not enough. Even the best program requires periodic review and change. Organizations that have not invested the time, resources, and energy in competency-based governance, comprehensive board member orientation and education programs, and carefully structured board discussions that are generative, strategic, and prospective face a major challenge in attempting to catch up.

Why is there such a "governance lag" in healthcare organizations? It seldom is because they do not care or do not want to have good governance. One reason is that, although numerous conferences, articles, books, and forums exist where one can learn about the transformations occurring in healthcare, as well as the components needed for a governance program, few resources are available for evidence-based methodologies that prescribe the steps necessary to actually build a comprehensive and effective governance program.

Governance transformation requires a multifaceted, multiyear approach that is carefully constructed and executed, as well as continually evolving and advancing with cycles of learning. The approach to governance transformation requires "new skills, expertise, and ways of thinking," as Zastocki states, but it also requires a return to the fundamentals and reinventing them as necessary. …

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