Find out more about health care governance on the Great Boards and Center for Healthcare Governance websites.
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Find out more about health care governance on the Great Boards and Center for Healthcare Governance websites.
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Hospitals and Care Systems of the Future, a report developed by the AHA’s Committee on Performance Improvement, asserts that hospitals and health systems in the U.S. will face “unparalleled pressures to change in the future.” Multiple, intersecting environmental forces will drive the transformation of health care delivery and financing from volume-based to value-based payments over the next decade, the report says. These forces include everything from the aging population to the unsustainable rise in health care spending as a percentage of the overall economy.
The report cites economic futurist Ian Morrison who believes that as the payment incentives shift, health care providers will modify their core models for business and service delivery. He refers to the historic, volume-based payment environment as the “first curve” and the future, value-based market dynamic as the second curve.
Many hospitals already are broadening their traditional focus on fee-for-service and acute care and evolving into “care systems” that integrate a continuum of patient-focused services and can take accountability for managing quality, health improvement and costs across providers. But – and here’s the rub — will the payment system change fast enough to reward providers who join together to deliver value?
As the report states: “Progressing from the first curve to the second curve will be a vital (but challenging) transition for hospitals, analogous to having one foot on the dock and one foot on the boat—at the right point, the management of that shift is essential to future success.”
Using the Report
The winter issue of the Great Boards newsletter provides report highlights (“Leading Through Change: Cultivating the Curves”) and then suggests how boards can use the report as a provocative framework for strategic thinking, organizational assessment and decision-making. In his commentary “Asking the Edgy Questions about the Future” Barry Bader discusses how boards can use the report to:
He also suggests questions boards and leaders should avoid in using the report to engage in generative governance, a more visionary and creative mode of board work that moves beyond more traditional fiduciary and strategic approaches to governing.
Read and download the issue now at www.greatboards.org where you also can download several sample tools to apply ideas discussed in the report and newsletter.
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The fall issue of Great Boards, our first since Great Boards joined the American Hospital Association family – is now available on the Great Boards website. The issue features these stories:
National Call to Curb Health Disparities – Health care access and outcomes should not be dependent on an individual’s race or ethnicity, but disparities in care remain, says the lead story. “There’s ample evidence that indicates that differences persist in the way healthcare is delivered, that certain health needs of racial and ethnic minorities and other subgroups remain unmet, and that the health status of these populations varies from that of other subgroups. Data show higher rates of infant mortality, hypertension, death from heart disease and stroke, and preventable hospitalizations among blacks compared with other populations. When hospitals look at their patient diagnoses data by race and ethnicity they also can uncover less obvious health needs.”
In July, these findings drove a group of leading health organizations, including the American Hospital Association, American College of Healthcare Executives, the Catholic Health Association of the United States, the National Association of Public Hospitals and Health Systems and the American Association of Medical Colleges, to issue a national “Call to Action” urging hospital and health system leaders to take three steps to help eliminate disparities and improve quality of care for all. These steps include:
This article by Great Boards managing editor Mary Totten describes action steps boards can take to provide leadership on reducing health disparities.
Avoiding Bad Big Decisions – Boards and senior management teams often make three mistakes in decision making that lead to flawed, suboptimal decisions. This commentary by Barry Bader says boards need to pay attention to their process for decision making, and it offers practical ideas for making decisions effectively.
Also look for several sample resources, including a charter for a board Cultural Diversity Committee, a Racial and Ethnic Disparities Dashboard and a Policy on Strategic Planning, on the Great Boards site home page under Related Resources.
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Bader & Associates founded the Great Boards website and newsletter in 2001 with the singular goal of promoting excellence in the governance of hospitals and health systems. Since then, more than 40 issues of the newsletter have covered the gamut of board best practices, and the website has grown into a rich resource of model documents, tools and templates for boards in the healthcare field, all provided at no cost to subscribers.
Earlier this year, Bader & Associates and the American Hospital Association joined together to announce that the Great Boards newsletter, website and blog now will be published by the AHA through its Center for Healthcare Governance, in conjunction with Bader & Associates. This collaboration will enable Great Boards to significantly expand its outreach to new readers and to develop new content based on the combined capabilities of Bader & Associates and the AHA.
What will this mean for subscribers? Beginning this fall, the tangible benefits you’ll see will include:
Some things will not change, including Great Boards’ mission of providing valuable and extensive resources without cost to the healthcare community. Barry Bader will serve as an editor and contributor, and will bring his 35 years of experience in governance to AHA as a Senior Consultant to the Center for Healthcare Governance and as a member of the Center’s National Board of Advisors. Mary K. Totten, Director of Content Development for the Center, will be the managing editor of Great Boards.
The first issue of the Great Boards newsletter to be produced jointly will be released shortly and address two important subjects: how boards can take action to reduce health disparities among racial and ethnic minorities, and how to implement effective decision making processes at theboard level.
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The shift from today’s volume-based payment system to tomorrow’s value-based methodologies took a major step forward yesterday. The Centers for Medicare & Medicaid Services (CMS) released proposed rules for the new Accountable Care Organization (ACO) program. Although the proposed regulations will be the subject of extensive comment and will undoubtedly be changed before final adoption, the coming transformation in Medicare reimbursement is so profound that the rules command the attention of governing boards and other healthcare leaders now.
Rather than read the entire 429 pages, board members would be wise to read an article in March 31 issue of the New England Journal of Medicine by CMS Director Donald M. Berwick, MD, MPP. It lays out the rationale and essential principles for ACOs. Key points include:
The article summarizes the proposed rule’s provisions regarding who can form and lead ACOs, including: physician groups; physician practice networks; hospitals that employ physicians; and partnerships among these entities. It describes how ACO should be governed –by providers, but with the voices of patients and community involved too. CMS is proposing to offer two models for ACOs to share financial rewards and risks with Medicare, one low risk, the other higher risk but also high potential return. The article also articulates 65 quality performance measures for judging ACO performance.
The shared savings program is not the end point for ACOs, Berwick stresses, but rather, it is designed to first of many “delivery-reform efforts such as expanded use of medical homes, bundled payments, value-based purchasing, adoption of information technology, and payment reforms are under way or under consideration.”
Thus, an ACO is really a structure for carrying out a cultural transformation in healthcare delivery from incentivizing volume to rewarding peformance in in improving individual and population health and controlling costs. Boards should be asking how ready their organization is to work in collaboration with physicians to measure and manage both the costs and quality of patient care — to individual patients and to targeted populations groups such as those with diabetes, heart disease, hypertension, and the frail elderly.
Berwick concludes: “Whatever form ACOs eventually take, one thing is certain: the era of fragmented care delivery should draw to a close. Too many Medicare beneficiaries — like many other patients — have suffered at the hands of wasteful, ineffective, and poorly coordinated systems of care, with consequent costs that are proving unsustainable. CMS believes that with enhanced cooperation among beneficiaries, hospitals, physicians, and other health care providers, ACOs will be an important new tool for giving Medicare beneficiaries the affordable, high-quality care they want, need, and deserve.”
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As hospitals, health systems and physicians gear up for the implementation of the Affordable Care Act (ACA), the board’s radar screen has to track the growing judicial and legislative challenges that could alter or even nullify the new law.
This week featured major developments in Congress and the courts, as well as from CMS.
On Monday, in a case brought by 26 state attorneys general, U.S. District Court judge Roger Vinson ruled the entire law unconstitutional. An editorial in the Wall Street Journal details Vinson’s rationale that law exceeds the federal government’s Constitutional powers, by requiring people to buy something, i.e., health insurance, and penalizing them if they don’t. Because the bill’s backers excluded the usual “severability clause” (arguing that the law’s elements reforming the healthcare system are irrevocably intertwined), Vinson said he had no choice but to label the entire law unconstitutional. A Virginia judge previously ruled only part of the bill unconstitutional.
But the battle isn’t over. Experts expect these cases and others will work their way through the appellate courts to the Supreme Court, with a decision not expected before the end of 2011 and most likely 2012. There, the law’s defenders will mount an impassioned legal defense of the law. To read one thoughtful analysis, look at attorney Timothy Jost’s response to the Vinson opinion, published by Health Affairs.
In Congress, the Senate as expected rejected a House-passed bill to repeal the ACA, but Republicans promised to dull the law’s impact through other means, such as not funding agencies and programs created by the new law. A story by Congressional Quarterly HealthBeat Editor John Reichard, published by The Commonwealth Fund, predicts that “worries over deficit spending are going to frame Washington’s big policy debates in the coming year. One proposal will be to change Medicare from a defined benefit to a defined contribution plan and give seniors a voucher to buy their own plans on an open market.
Meanwhile, the Centers for Medicare and Medicaid Services keep forging ahead.On Jan. 25 CMS issued a final rule implementing the ACA’s provisions to reduce fraud, waste and abuse. Rules implementing the Accountable Care Organizations payment program are expected any time. The Fierce Healthcare newsletter reports today that in a talk, CMS interim Administrator Don Berwick signalled the rules will address such topics as:
What are health systems to do amid the uncertainty? At a governance level, it’s important to separate strategic from operational decisions, and keep the board focused on strategy and risk. Strategically, there’s a compelling case that healthcare payment is truly shifting from piecework to value-based, and therefore, providers must be able to take accountability for cost and quality. An article in the current issue of Trustee magazine from Kaufman, Hall & Associates, Inc. argues that hospitals will need eight core competencies, including physician integration, cost management, and scale/market essentiality.
A column in Bloomberg Businessweek by Susan Devore of Premier articulates the rationale for accountable care organizations and explains why 25 health systems in the Premier alliance are testing a variety of approaches for new forms of care delivery and payment. Generally, the public doesn’t understand the revolution underway in healthcare delivery and the benefits it could offer — but this case needs to be made and Devore does a good job stating it.
The next several months promise a continuing saga in the ACA legislation.
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The new issue of Great Boards — available now at http://www.greatboards.org/— takes on the thorny matter of physician membership on hospital boards. This special, expanded issue begins by declaring that changing times demand new approaches:
“As hospitals develop more closely aligned economic relationships with some or all members of the staff, the fiduciary duties of the governing board and the traditional,representational approach to selecting physician board members are coming into irreconcilable conflict. It is time to revisit the underlying principles and mechanisms for physician membership on hospital and health system boards.”
The article describes describes common limitations of traditional “medical staff representation” on the board. Underscoring that changing how physicians are selected for the board is a sensitive topic, the article suggests a collaborative process for engaging physician leaders in the development of new approach that follows one of two alternative models, an “Enhanced Traditional Model” and the “Integrated, Accountable Care Model.”
To read and download the full issue now, go to the Great Boards website at http://greatboards,org/
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A former health system board chair from New York wrote this to me on his holiday card: “Best wishes for 2011: Looks like this will be the year of governance.”
He may be right.
The past year has brought the most sweeping change in the healthcare payment system since the enactment of Medicare and Medicaid, including the long sought goal of near-universal insurance coverage. Yet, instead of a precise road map to the future, healthcare leaders will need a GPS to chart their future amidst the uncertainties ahead, including the fate of health care reform in the courts and in Congress; what happens when the Medicare physician payment fix expires; how hospital-physician integration arrangements pan out; and whether the economy recovers.
Here are ten New Year’s resolutions to make 2011 a successful one for governance:
Perhaps a few of these resolutions will be applicable to recharge your board for the New Year. If not, create some resolutions of your own to make 2011 “the year of governance.”
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Healthcare reform is expected to drive a new round of mergers, acquisitions, and strategic alliances among hospitals and other providers.
As a white paper last summer from The Governance Institute noted, “Since the recent passage of healthcare reform, nonprofits have demonstrated much more interest in achieving scale. Also, a number of free-standing hospitals and small hospital systems are questioning whether they can thrive post-healthcare reform, without becoming part of a large system.”
A consolidation strategy goes to the core of a governing body’s fiduciary duty to preserve the organization’s long-term viability to sustain its mission. Directors should ask whether consolidation will strengthen the organization’s finances, operations, market position, growth potential, and core values, and thus support its mission. Or conversely, will consolidation dilute resources and damage stakeholder relationships?
The new issue of Great Boards is designed to orient directors to the key governance issues involved with mergers and strategic alliances. It includes the steps boards should take to prepare for a consolidation strategy; the seven key questions at the heart of almost every deal; and the right timing for engaging a small task force and the full board. Read and download it now at http://greatboards.org/.
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If health care reform fails, it won’t be for lack of trying by many of the nation’s leading health systems and their physician partners. Although many hospitals are still trying to determine what the Patient Protection and Affordable Care Act means for them, those on the leading edge are forging ahead.
One example: Fairview Health System in Minnesota. Writing on the Action for Better Healthcare blog, Mike Stephens, former CEO at Hoag Memorial Presbyterian in Los Angeles, calls attention to Fairview’s efforts in six areas:
Fairview has posted a summary of its efforts including a video on its public website.
Fairview is one of several systems profiled November 28 by the Wall Street Journal in an article entitled “Embracing Incentives for Efficient Health Care.” Among the others, Tucson Medical Center is forming a company that the hospital will own jointly with local physicians’ practices to act as an Accountable Care Organization (ACO). The Billings Clinic in Montana, an integrated physician and hospital organization, is also preparing to take steps to become an ACO. The clinic hopes to build on lessons from an earlier Medicare pilot program in which the the clinic says it reduced hospital admissions for around 500 heart-failure patients by 35% to 43%, saving Medicare more than $3 million over three years. The efforts focused on close monitoring of patients who called in daily to provide measures like their weight.
We’ve written in the past about innovations at Advocate Physician Partners in Chicago. Advocate Physician Partners’ Clinical Integration Program unites over 3,600 independent and employed physicians and the eight Advocate hospitals in a nationally recognized program with improved clinical outcomes and reduced health care costs. Now, Advocate has announced a new educational symposium on February 24th that explains how its Clinical Integration Program works. This is a pragmatic, practitioner-led symposium that can help others move forward to take accountability for value and outcomes.
Other sources of information include the Commonwealth Fund, American Hospital Association, and Great Boards.
The early adopters aren’t waiting for certainty from Washington. They are moving forward with integrated, accountable care, and many are sharing what they’re learning along the way. Other hospitals and health systems would be well-advised to take advantage.
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by Elaine Zablocki, Editor, Great Boards newsletter
Increased Republican power in Congress will mean continuing debate over healthcare reform, but hospitals shouldn’t abandon delivery system reforms, according to Kristin Welsh, Vice President of Federal Affairs for the American Hospital Association. She made her remarks during a webinar on “Post Election Analysis on Health Reform — from Inside the Beltway,” presented last Friday by the QHR Learning Institute.
Welsh predicted that early in the year there’ll be many votes on repealing or replacing healthcare reform, but in the end, Congress doesn’t have the votes to override a Presidential veto. As a New York Times story on Nov. 6 by Robert Pear explained, Republican legislators are likely to withhold appropriations for some of the estimated 100 sections of the law that require funding as well as trying to repeal or scale back provisions that conservatives despise most, such as the individual mandate to buy insurance or the new IRS form 1099 requirements.
“House Republicans could easily pass … provisos stating that no federal money could be used to carry out specific sections of the new health care law,” Pear wrote. “By attaching the restrictions to appropriations bills, House Republicans can force negotiations with the Senate. The Hyde amendment, restricting the use of federal money to pay for abortion, began as such a rider more than 30 years ago.”
“The individual mandate is being addressed at the state level, through the courts, and it remains to be seen how that plays out,” Welsh said. “Obviously it’s very important for us (AHA) that it stays in. That was the crux of our involvement in the reform package at the very beginning.”
Welsh also noted potential opportunities for hospitals as they work as with the newly empowered Republicans in the House. Labor won’t have the votes to pass card check “so we have a reprieve on that issue,” she said. “Liability reform is an issue that clearly resonates with Republicans. The House could probably pass a liability reform bill now but the Senate probably cannot.”
Republicans generally support regulatory relief, and that poses an interesting situation for hospitals, Welsh said. “If regulations are seen as advancing healthcare reform, the Republicans are going to be very skeptical of providing help to those regulations. They don’t want to see reform advance; they want to rein it in. Unfortunately, clinical integration is seen as part of health care reform, so we’ll need to explain this issue in a way that puts it outside the scope of reform.”
Republicans also face particular challenges as they plan their strategy, Welsh said. Since the reform has been counted as money-saving legislation, any attempts to repeal provisions of the bill will require off-setting savings. “It’s a complicated bill, all very intertwined,” Welsh said. “To pull one thread could unravel things you might not want to unravel. I think right now Republican staff must be struggling to figure out how to dismantle this in a thoughtful way.”
Back at the start of the debate on health care, provisions on insurance reforms, delivery system reforms and transparency had widespread support on both sides of the aisle, Welsh said. “That’s important,” Welsh said. She urged hospitals to continue preparations for delivery system reforms, because “issues such as ACOs, bundling and gain sharing are not going away. These issues will stay with us, because they are the crux of moving the way care is delivered and paid for.”
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