After reading your materials and the additional handout from Chapter 3, discuss the purpose of continuous improvement and why we use it in health care.?
After reading your materials and the additional handout from Chapter 3, discuss the purpose of continuous improvement and why we use it in health care. Identify an area in health care that could benefit from continuous improvement and explain. (Reminder: sources need to be noted for in-text citations and in your reference list in APA format).
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Book that screenshots is from:: The Well-Managed Healthcare Organization 9th Edition
Author(s)John R. Griffith; Kenneth R. White 2016
The Well-Managed Health Care Organization
Strategic Leadership: Governance
Chapter Four
Chapter Emphasis
Establishing a culture of respect and service
Using realistic forecasts to create a plan for mission achievement
Working with physicians and other caregivers to improve quality and efficiency of care
Monitor the overall performance of the HCO
Keeping the board as an effective forum for meeting stakeholder needs
Purpose of the Governing Board
The purpose of the governing board of a well managed HCO is to create and maintain a foundation for relationships among the stakeholders that identifies and implements their wishes and effectively as possible.
Board Purpose
Managerial perspective
Resource distribution
political
Resource contribution
Funds or services the board members may donate
Directors
Members of the governing board of the for-profit HCOs who are dominant stakeholders; who are compensated for their efforts and their success is the measured by profitability
Trustees
Members of the governing board of the non-for-profit HCOs who volunteer their time to the organization; their only compensation is the satisfaction they achieve from their work. The title reflects their acceptance of the assets in trust for the community; also may be called directors.
Functions of the Governing Board
Maintaining management capability
Establishing the mission, vision, and values
Approving the corporate strategy and annual implementation
Ensuring quality of clinical care
Monitoring performance against plans and budgets
Improving board performance
EXHIBIT 4.1 Functions of the Governing Board
© 2016 Foundation of the American College of Healthcare Executives
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EXHIBIT 4.1 Functions of the Governing Board (continued)
© 2016 Foundation of the American College of Healthcare Executives
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EXHIBIT 4.1 Functions of the Governing Board (continued)
© 2016 Foundation of the American College of Healthcare Executives
CEO Selection
CEO selection is the most important decision a board will make
Exceptionally difficult
Process includes
Job description
National search with help of search firm
Equal opportunity
Interviews by board and diverse teams
CEO Ongoing Review
Develop a mutual understanding of the employment contract
Agree on short-term (annual) personal goals
Establish the base compensation
Establish incentives for goal achievement
Management Development and Succession
The board is responsible for a management succession plan and to develop managers
Developed by CEO and SLT
Identifies specific internal candidates to replace key executives
Review of management compensation and incentives
Attention to diversity
Establishing Mission, Vision, and Values
Board establishes the mission, vision, and values with stakeholder involvement
Boards role is to monitor the reality and effectiveness of the mission in light of evolving stakeholder needs
Annual environment assessment
Goal setting activities
Revisiting the mission and vision with visioning exercises
Corporate Strategy and Implementation
Board makes final decisions in shaping both short-and-long term performance
Resource allocation decision separate from the mission and vision
Management provides proposals
Board reviews proposals for consistency with stakeholder needs, mission, and prior actions
Board approves management proposal
Corporate Strategy
The initiative for strategic opportunities comes from the environment assessment
New business opportunities are generated
Scenarios are developed (alternate approaches to improving the profile of opportunities reflected in the environmental assessment)
Corporate Strategy (cont)
Strategic opportunities are evaluated
opportunities that, when narrowed for use in the business plan, involve the quantum shifts in service capabilities or market share, usually by interaction with competitors, large-scale capital investments, and revisions to several line activities
Business plan developed and ultimately approved by the board
A model of specific strategy or function that guides the design, operations and goal setting
EXHIBIT 4.2 Strategic Scenario Questions for Healthcare Organizations
© 2016 Foundation of the American College of Healthcare Executives
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EXHIBIT 4.2 Strategic Scenario Questions for Healthcare Organizations (continued)
© 2016 Foundation of the American College of Healthcare Executives
Long-Term Planning
Multi-year plan with specific implications for annual plans
Growth opportunities
Facilities
Personnel
Marketing
Monitors implementation
Long-Range Financial Plans
An ongoing projection of financial position showing earnings, debt, and capitalization for at least the next seven years
Annual Goals
Built on multi-dimensional strategic performance measures
5 pillars
People
Service
Finance
Quality
Growth
Reference for Goal Setting
Board participation in goal setting at 3 critical points
Establishing the dimension
Setting budget guidelines
Approving the final budget
4 conceptual referents are used to evaluate current performance and opportunity
Trends
Competitive and industry comparison
Benchmarks
Values
Approval of Annual Goals
Goal setting is a detailed and complex process
Takes several months to complete
Looks like a book with overall goals and expectations for each group/service line
Final approval by the board, by this time there should be no surprises
Ensuring Quality Care
The board is responsible for exercising the duty of care on behalf of the patients and the community and behalf of the physicians who desire to participate, and the organization as a whole is liable for damages should they fail
Joint Commission has specified many of the structures by which the board and the hospital medical staff discharge this duty
Core measures
CMS – Specification Manual for National Hospital Inpatient Quality Measures – pay for outcomes
Five Board Obligations
Approve the medical staff bylaws
Appoint medical executives at all levels
Approve the plan for medical staff recruitment and development, a part of the long term plans
Approve appointments and reappointments after a review and according to the bylaws
Approve contracts with physicians and physician organizations
Clinical Staff Bylaws
A formal document of the governance procedures for physicians and others who provide care in the organization; approved by the governing body normally called the Medical Staff Bylaws
Clinical staff includes the clinical associates who are legally and contractually permitted to make a medical diagnosis including physicians, NP’s and LIPs
Peer Review
Any review of professional performance by members of the same profession
Clinical Staff Organization
The organization of an HCO’s staff members that provides a structure to carry out policies, expectations for quality of clinical care, and communication from physicians to the governing board
Monitoring Performance
High performing HCOs are future oriented
Exceed legal and ethical standards
Board performs monitoring functions that promote excellence and compliance
Routine surveillance monthly or quarterly
Levels of performance leading to benchmarks
90 day plans if recovery is necessary
Reports form Auditors/Accreditors
External auditors
Reports directly to the board through an audit committee
Insulated from threats and conflicts of interest
Greater protection from fraud
Greater accuracy in reporting
Management letter
Comments of external auditors to the governing board that accompany their audited financial report
Compliance
Compliance programs are designed to meet statutory and regulatory requirements; may be based on legislation or voluntary efforts such as accreditation
Joint Commission – deemed status
National Committee for Quality Assurance
Health insurance plans
Physician organization
Other compliance programs (HIPAA, Medicare, Civil Rights)
Major Contracts
The board routinely approves real estate transactions, acquisitions, mergers, joint ventures, and contracts involving large sums of money.
Includes review of quality
Includes review of legal requirements
Effect on stakeholders
Board Performance
Essential question in assessing the board’s performance is whether stakeholder wants have been satisfied as well as realistic alternatives would permit.
Balanced scorecard compared to competitors
Checklists of recommended practices
EXHIBIT 4.4 Ten Measures of Board Effectiveness
© 2016 Foundation of the American College of Healthcare Executives
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EXHIBIT 4.4 Ten Measures of Board Effectiveness (continued)
© 2016 Foundation of the American College of Healthcare Executives
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EXHIBIT 4.4 Ten Measures of Board Effectiveness (continued)
© 2016 Foundation of the American College of Healthcare Executives
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EXHIBIT 4.4 Ten Measures of Board Effectiveness (continued)
© 2016 Foundation of the American College of Healthcare Executives
Executive Sessions
The purpose of an executive session is to allow outside members complete freedom to discuss the performance of the CEO or other issues in the early stages when they can most effectively be address
Open session usually a designated time during a board meeting
Board Membership
Board members should possess two minimum criteria
Careful, thoughtful and judicial in decision making
Hold a position of trust
Excellent boards seek members who are committed to the criteria of prudence and trust
Membership Qualifications
Familiarity with the community
Familiarity with business decisions
Available time
A record of success
Reputation
Representation Criteria
A good board should have representation from women, the poor, ethnic groups, labor and so forth
The concept of representation can include employees, physicians, nurses, religious bodies involved in ownership, and other groups
Stakeholder constituencies that represent the community the organization serves
Board Representation
Board members are appointed as individuals, not as representatives
Board members act on behalf of the community as a whole
Board Selection
Appointment to membership and office
Role of the nominating committee
Size and eligibility, and length of terms
Compensation
CEO membership
Physician membership
Board Organization
Standing committees – permanent units of the board
Executive
Quality
Finance
Compensation
Audit
Nominating
Ad hoc committees
Specific purpose for a specific length of time
EXHIBIT 4.5 Typical Standing Committees of the Governing Board
© 2016 Foundation of the American College of Healthcare Executives
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EXHIBIT 4.5 Typical Standing Committees of the Governing Board (continued)
© 2016 Foundation of the American College of Healthcare Executives
Governance Bylaws
A corporate document that specifies quorum rules of order, duties of standing committees and officers, and other procedures for the conduct of business
Multi-corporate Governance Structures
The nature of hierarchical organizations is such that one can affiliate several corporate units and establish governance functions for affiliates, setting up boards that report to boards
Subsidiary Board Contributions
Subsidiary boards make 4 contributions that have made them popular in large organizations
They expand representation
They allow board representation
They permit joint ventures with other corporations and partnerships with medical staff
They allow identification of taxable endeavors and protect the exemptions of activities that qualify under IRS Codes
Subsidiary Boards
Subsidiary boards operate under the concept of reserved powers
Reserved powers are decisions permanently vested in the central corporation of a multi-corporate system
Joint Venture Boards
Jointly owned corporate subsidiaries
Collaboration of an HCO and physicians
Services lines and other initiatives
Orthopedic hospitals, cancer centers, surgery centers
Usually have a board that represents the participants
Can be for-profit or non-for-profit
Flexible and convenient to allow physician ownership and shared financial rewards
Board Education
Educated board members achieve greater financial success
New board members need orientation
All board members need ongoing education
Informal and some just in time training
Mentoring also by senior board members when serving as chairs of committees
EXHIBIT 4.7 Board Member Orientation Subjects
© 2016 Foundation of the American College of Healthcare Executives
Effective Board Meetings
Preparation is essential to ensure effective board meetings
Focused agenda
Consent agenda is a group of agenda items passed without discussion unless a member requests a review; used to focus attention on priority matters
Use of committees and subcommittees
Stakeholder involvement
Negotiation
Consensus
Legal and Ethical Issues
3 areas of legal and ethical concerns known to create governance difficulties
Conflict or duality of interest
When a board member has a personal financial gain or risk
Inurement
Board member improperly receives financial gain
Conversion
Where the assets of a not-for-profit corporation are transferred to a for-profit corporation at less than their true value
Thank you
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