Governance in Today’s Healthcare Climate MD Monthly January 12, 2017 Men's, Women's By Matthew J. Kelly MHA, President Board of Directors, CommuniCare Health Centers The healthcare system in America is in the early stages of changes that will, in all probability, be the most significant since the advent of employer-funded health insurance. It will be funding methodologies that will drive the changes, but no aspect of the healthcare market will be exempt. The fallout remains unknown. Will it result in a single-payer system, a modification of today’s employer-driven system or some other model? The shifting sands pose a significant challenge for leaders in healthcare organizations that must simultaneously prepare their organization for future changes while continuing to provide high-quality care today. The governing body of any organization, be it called the Board of Directors, Trustees, Regents or some other title, is legally responsible for all of the activities of the organization. The board does so in four ways. First, it hires and supervises the CEO of the organization. Second, it establishes the organization’s mission, vision and values. Third, it approves all organization policies and strategic plans. Finally, it provides oversight of the organization’s direction and ensures that the implementation of the approved policies is in accordance with its mission. There is an additional aspect of oversight that has recently become more critical to the organization: compliance with externally mandated requirements whether governmental, payer or other third-party imposed. Most of the policy development and oversight activities are accomplished by the committees of the board, each focusing on specific critical activities, such as finance, quality and IT. The one thing that the board should never do is to become involved in day-to-day operational decisions and operations. This is why the board employs a CEO as he/she is there every day, while the average board will only meet for about 40 hours per year. Instead, the governance of healthcare organizations should be focusing on three fundamental aspects of service delivery: financial viability, stakeholder relations and quality of care Financial Viability The organization must be financially viable to survive. It is incumbent upon the board to ensure that the basic accounting principles and practices are in place and external audits are performed at least annually with the full results reported to the board. The financial status of the organization must be an integral part of every board meeting. The board should be informed of the mix of third-party payers for the institution as well as any problem payers. For those larger institutions with multiple sites of care, detailing how each site is contributing to the overall financial health of the organization is critical for strategic planning. Stakeholder Relations There are two to three groups that will determine the success of the organization. They are patients, employees and, depending upon the organization’s mission, referral partners. The satisfaction of all three parties with the institution are critical. If patients are dissatisfied with the services they receive, they won’t return and will tell others not to come. Their concerns focus on ease of access to facilities, waiting times, and most importantly, how they perceived they are treated. Employees are a most critical component. They are the face of the organization. They are the primary driver of patient satisfaction. The third group, referral partners, is critical for large academic medical centers or other tertiary care facilities, as they are dependent on these partners for a significant proportion of their patients What barriers do referring physicians or clinics perceive in sending a patient to the institution? Why do they choose you? Why do they choose someone else? There are a myriad of survey instruments and services for measuring the satisfaction of all three parties. The board must require that they be used and the results and conclusions be reported back by the leadership team. Quality of Care This area measures the technical quality produced by the organization.Did the patient get better? Is the staff following industry standard practices in identifying and treating those diseases most prevalent in the population being served by the healthcare organization? There are a number of different quality of care measurement instruments available to measure outcomes and practices. The instrument chosen may well be determined by either an external regulator, i.e. State Health Department or accrediting agency, such as the Joint Committee on Healthcare Organization (JCAHO). No matter which instrument is chosen, the actual areas of monitoring must look at the highest volume diagnoses and procedures for the specific organization. The results of the monitors must be closely examined by the Quality Management Committee of the Board. They then will report any significant trends and outcomes to the full board. It is immediately evident that all three of these areas are not only critical to the survival of the organization, but they are interdependent upon each other. The financial health of a healthcare organization will be impacted by the number of individuals using its services. They will only choose to use its services if they see the organization as providing readily accessible, high-quality care. Yet establishing those well-equipped and staffed physical locations in close proximity to the population to be treated requires good financial health. Although industry challenges abound and changes lie ahead, a governing body can work with the leadership team to make a real difference in the development of an organization. CommuniCare Health Centers is a private, non-profit healthcare organization headquartered in San Antonio. It provides adult medicine, senior care, pediatrics, OB-GYN, behavioral health, and dental services to all residents, whether they are insured, underinsured, or uninsured and have done so for more than 50 years. Historically, CommuniCare, like most non-profit organizations, had been reliant upon federal and charitable foundation grants for a majority of their annual income. The Board of Directors and the CommuniCare Leadership Team realized that with the passage of the Affordable Care Act, this was no longer going to be a tenable funding methodology. In 2010, CommuniCare had five sites of care and provided care to 34,231 individuals, who generated 127,400 outpatient visits. CommuniCare’s net revenue in 2010 was approximately $22,550,000. The immediate challenge was that significant numbers of patients who had utilized CommuniCare as their only source of healthcare would soon have choices of care under the provisions of the act. The first and most important decision of the board was that the ultimate mission of serving the most vulnerable populations would remain paramount. It was clear that CommuniCare needed to raise the revenues from the provision of care and lessen the reliance on grant funding. The leadership team was tasked with looking for opportunities for CommuniCare to expand into areas that not only had an uninsured population but also had underserved insured populations. They were also tasked with establishing mutually beneficial relationships with the large healthcare systems in the community. Through these efforts CommuniCare not only expanded services within San Antonio but also expanded services into Hays and Kendall Counties with clinics in San Marcos, Kyle, Wimberley and Boerne. One fear was that with the rapid growth the quality of care would suffer. To address that concern, two new clinically trained board members, a physician and a nurse, revamped the board’s Quality Assurance Committee to closely monitor quality and quality measurement systems. By improving access to care, and not just maintaining but improving quality, Communicare grew to 13 sites of care, a +160 percent increase, treating 51,174 patients, a +49.6 percent, and ultimately generated 180,336 outpatient visits, a +41.6 percent increase, by 2015. However, the most telling statistic was the revenue increase of 180 percent to approximately $63,150,000. That rise is fully due to the fact that by 2015 more than 65 percent of all revenues were workload derived. It should also be noted that during that five-year period, not a single individual in need of care was turned away from CommuniCare due to lack of funding. The board was fully involved every step of the way, approving every new site of care, ensuring quality of care, and closely monitoring the financial impact of every decision made. If a governing body employs the right CEO and maintains focus on financial viability, stakeholder relations and quality of care, it will ensure the organization not only survives but thrives in today’s challenging healthcare market. For as the Greek philosopher Heraclitus said 2,500 years ago, “Nothing endures but change.” For more information visit www.communicaresa.org.