Care Systems of the Future, Implications for Governance: Winter 2011-12 Issue of Great Boards

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:

  • Clarify the organization’s vision and test progress;
  • Reveal untapped or underexploited strategic choices;
  • Frame strategic choices from the community’s perspective;
  • Explore aims not tactics;
  • Test the mission fit of strategies and vision from a stakeholder’s point-of-view;
  • Challenge the organization’s capacity for change;
  • Explore the implications of living between the first and second curves;
  • Challenge key governance and leadership assumptions;
  • Spur innovation; and
  • Challenge the board’s capacity to lead transformative change.

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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