Kevin Reed, an Austin healthcare attorney who has been general counsel for the Texas Organization of Rural and Community Hospitals for more than 20 years, listed “10 Things Really Successful Boards Do” at the Texas Healthcare Trustees conference in Fort Worth last week.
1. They understand the money. “Hospitals are paid in the most convoluted, weird, and squirrely ways possible. [Board members] have to understand that. You have to know when and how you make money, and what to do with it when you get it.”
2. They understand the money isn’t everything. “You need to make a lot of money to raise the capital you need. Otherwise, you’ll be falling behind. However, not all decisions are money-oriented. You have to consider your hospital’s patients as if they are a member of the family.”
3. They understand perspective. “Some boards get tied up in incredibly minute things. They talk about $2,000 items when they are overseeing a $50-$100 million organization. Someone needs to step up and ask: ‘What are you doing? What difference does it make? Why are we taking up board time with this?’ It would be helpful if you put up a sign on the wall that reads ‘We’re a $100 million organization’ as a reminder.”
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4. They manage relationships. “This means the board’s relationship with the CEO, and with each other. Otherwise, you are less of a team. You need to acknowledge the work of the CEO. I was in a board meeting when an auditor said, ‘This organization has exceeded its peers in every category.’ Not one board member made a comment. If I was the CEO, I would be downtrodden. The whole board should have given the CEO a standing friggin’ ovation. To not say a word is astounding.”
5. They commit to quality. “Good boards walk the talk. They actively pursue quality. They push it, they talk about it, they encourage it, and motivate others to strive for it. When the board is engaged, there is a noticeable difference in quality improvement.”
6. They understand their job. “Too many board members do their jobs without passion. They find the meetings long and boring. A board meeting is what you make it. Taking care of people in your communities can be a passion. That passion can be infectious. It can infect staff and management. Make the most of your time. It’s a wonderful opportunity.”
7. They understand compliance. “There was a record $4 billion in fraud recovery in 2012. The return on investment was almost $8 to $1. It is a fantastic business for the government to be in. It is not going away. The government used to use the pay-and-chase method of recovery. Now it is using predictive analytics.”
8. They understand the importance of keeping current. “McDonald’s spends $1 billion a year tearing down its restaurants and rebuilding in the same location. Why? Because sales and customer loyalty increase when it reopens. It’s the same thing in healthcare. When you [upgrade], patient visits and volume increase. People like to go to a modern, more efficient facility. It makes a difference.”
9. They adhere to a code of ethics. “Reputation matters. Reputation turns into increased patient volume, although that’s not why they do it. They do it because it is the right thing to do. But it does work.”
10. They understand time efficiency. “You have 30 t0 40 hours of governance a year. Make the best of it. They focus on high-value discussions, not focusing on the $2,000 item. They also don’t let rambling discussions go on.”
Reed added that effective boards ask the following questions when discussing agenda items:
– How does this proposal promote our mission?
– How much will it cost?
– How will we pay for it?
– What could go wrong?
– What is the best-case scenario?
– Why are we discussing this?
– What is management’s recommendation? (Ask this in the first two minutes, not after an hour of discussion.)
And one statement:
– You did not answer my question.
Date: July 31, 2013