By Daniel J. Marino,President/CEO, Health Directions
“A board’s most valuable resource is its time.” That single sentence, from a renowned expert on board and governance matters, serves as the wellspring for some important guiding principles for governance of your accountable care organization (ACO) or clinical integration program.
Following are some best practices your organization can adopt to ensure optimal effectiveness of governance functions and your organization’s overall success in achieving its strategic objectives.
1. Screening Tool for Prospective Governance Members
Most population health management-type organizations are comprised of multiple stakeholder groups, some of whom have little history of working together or knowledge of the capabilities and potential conflicts of leadership. In some cases, these stakeholders have historically thought of themselves as competitors to one another. An important exercise for any board is to work through a process for objectively and consistently screening potential board members to ensure suitability. Such a screening process probably should involve some sort of screening for conflicts of interest, but at its simplest level should at least make sure the prospective governance member is available to attend governance meetings at scheduled times.
2. Position Descriptions for Board and Committee Chairpersons and Rank and File Members
Position descriptions are not just for management. A succinct statement of the purpose and expectations of both Board/Committee chairpersons as well as “rank-and-file” Board and Committee members can be remarkably helpful, particularly in underscoring the importance of leaving members’ legacy “stakeholder” organizational interests at the door and acting in the best interests of the enterprise. This is an important first step in building a common culture and preparing for the future, rather than preserving the past.
3. Cycled Performance Review of Board and Committee Chairs and Rank and File Members
Once formal position descriptions for Board/Committee chairpersons and rank-and-file members are developed and approved by the Board, it is easy to use these tools – specifically the duties – as the basis for formal performance evaluation and feedback. It is recommended that Board and Committee chairs be formally reviewed once a year, and that a cycled approach be used for rank-and-file Board/Committee members such that these members are reviewed at least once every two or three years. Performance feedback should be sought from fellow Board/Committee members. An objective third party might be engaged to consolidate (and de-identify) peer feedback, and then review results with the reviewee.
4. Formal Orientation for New Governance Members
It is important to have a steady rotation of new Board and Committee members to ensure all stakeholder represented in Board and committee decision-making, and in building a “bench” of physician leaders knowledgeable of and committed to the organization’s strategies. One effective means of doing this is to have formal orientation governance sessions with the incoming class of governance members. Depending upon the size of your governance, these orientation sessions might be conducted once or twice a year. They should be scheduled at times that are convenient for incoming governance members to attend (e.g. early morning or dinner meeting times). Attendance at an orientation could be a requirement before a candidate is officially seated on the Board or a Committee.
5. Governance Compensation
Some organizations routinely compensate physicians for their attendance and participation in committee work. Other organizations fiercely resist the practice. Regardless of whether you chose to compensate or not, the Board may wish to proactively evaluate the merits of, and formally adopt a policy related to, governance compensation, rather than just respond reactively when asked.
6. Charters & Annual Work Plans
It is typical for a Board, as one of its first orders of business, to develop a governance organization structure that creates a select few committees to do a “deeper dive” into policy matters and oversight activities. While each committee typically reports to the Board, there is often significant interaction among the committees as well. For these reasons, it behooves the Board to clearly articulate the role and expectations of its committees. This can take two forms: first, a “charter” outlining the general roles and responsibilities of each committee, and second, an annual “work plan” outlining what specific activities the committee is to undertake in a particular year. To illustrate, it would be typical for the “charter” of a quality committee to specify that committee as the governance entity in which program measures are to be developed. The “annual work plan” might include a directive from the Board that, this year, it expects the quality committee to develop measures related to cardiology, oncology and orthopedics. Committee charters should be reviewed and changes approved by the Board on annual basis, presumably at the same time that annual Committee work plan assignments are approved.
7. Board and Committee Self Review Process
Boards and committees are collections of individual members, but are also entities unto themselves. Just as individuals’ performance should be reviewed on a periodic basis, it is recommended that Boards and Committees do a collective self-review once a year, perhaps as part of an annual retreat process or in a special executive session.
8. Planning vs. Monitoring
As noted above, a board or committee’s most valuable resource is its time. The role of governance is to set strategy and the role of management is to implement strategy. It would be a revealing exercise to review the agendas of your board over the past year, identifying the proportion of meeting time and content spent on monitoring and looking over the shoulders of management vs. developing strategy and setting policy. How much time was spent looking forward vs. looking backwards at operations? Ideally, at least 70 percent of Board time should be spent setting strategy, formulating goals and crafting policy. To expedite monitoring functions, it is suggested that the Board develop high-level dashboard reports on critical indicators and other management-by-exception practices.
9. Pro Forma Agenda and Annual Master Calendar of Agenda Items
To help ensure the Board spends adequate time on strategy while still attending to its duties to monitor operations, it can be instructive to develop an annual calendar of agenda items as a planning guide for board activities. This will help ensure that nothing “falls through the cracks” while balancing activities throughout the year.
10. Mix of Routine and Extended Meetings
At least once a year, the board should hold a meeting of extended length to review past year accomplishments conduct a self-review of governance effectiveness and update strategy to chart the way forward for the next year or planning cycle. This type of extended meeting, typically a board retreat, can be followed by a similar extended meeting of key committees – perhaps a month or two following the board retreat – at which committees can assimilate the strategy updates of the board and assess the impacts on committee activities.
As President/CEO of Health Directions, Daniel J. Marino shapes strategic initiatives for healthcare organizations and senior health care leaders in key areas such as population health management, clinical integration, physician alignment, and Health IT. With a broad background in all aspects of practice management and hospital/ physician alignment, Dan is nationally recognized as a strategic leader in Accountable Care Organizations and clinical integration development. He frequently speaks at national conferences and regularly authors articles for the nation’s top healthcare industry publications related to current transformations in healthcare delivery. Dan may be reached via email at firstname.lastname@example.org or by phone at 312-396-5400.