Board on the Floor

Carrie Vaughan, for HealthLeaders Magazine , December 13, 2007
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Hospital boards have always been concerned with quality and safety--at least in theory. In practice, however, board members historically have spent most of their time overseeing their organization's strategic and financial goals. Quality and safety? Let the medical staff worry about those issues.

That governance model is beginning to vanish. Today's hospital boards may not need to know how to reduce blood-stream infections or ventilator-acquired pneumonia, but they certainly need to pay close attention to their hospital's quality performance, says Lee A. Carter, chairman of the board for Cincinnati Children's Hospital Medical Center. And beyond merely monitoring data on a select few measures, a growing number of strategic and economic factors are forcing many board members to help shape their hospital's entire quality agenda. Publicly reported quality performance data, consumer-directed healthcare, pressure from public and private payers to connect pay to performance, and volumes of research linking high-quality care to cost-effective care have made quality a growing responsibility for trustees.

With the U.S. Department of Justice taking a closer look at quality fraud in hospitals, the governance shift has legal implications, as well, says James L. Reinertsen, MD, president of the Reinertsen Group and a senior fellow with the Institute for Healthcare Improvement. For example, if a hospital and its board are aware of potential quality problems, haven't taken steps to correct them, and continue to bill patients based on high-quality service, that is considered fraud, says Reinertsen. "It is a very recent development and is causing a lot of consternation among board members who are saying, 'Wait a minute--we can't just delegate this to doctors.'"

Board members can no longer afford to set a quality target that simply says, "Our hospital's goal is to provide the best quality to the community." Rather, the board's oversight of quality must mirror its governance of financial performance. In other words, boards must set concrete goals for quality improvement, then hold management accountable for achieving those objectives. But what kind of governance model allows that to really happen?

The fundamentals of quality

For board members, making informed decisions about setting their organization's quality agenda and determining which quality metrics to watch requires a crucial, fundamental tool: information. Hospitals already provide board members with orientation resources, such as a list of common acronyms and access to conferences and educational sessions for the various subparts of the organization. But those steps merely begin the process of learning so that board members have a base vocabulary to understand what the organization is doing, says Jim Anderson, Cincinnati Children's president and chief executive officer. "Boards need to translate what they want to know about quality into their own terms and get educated about the quality dimensions of a healthcare institution," he says.

Senior executives should provide their board with an overview of the quality arena, including the major players and which ones the board should worry about the most, says Susanna Krentz, a senior principal and national practice director of strategy with Noblis Inc., a nonprofit technology, science and strategy firm. Board members need to understand how quality trends impact their healthcare organization directly. But many boards couldn't tell you what their hospital's largest payers are doing in quality, says Krentz. "To change one's quality position, it doesn't just happen. You have to intentionally do something."

One of the biggest challenges for board members is realizing that their organization's quality is not always the best in every aspect of care, says Carter, who still remembers the moment he learned Cincinnati Children's quality performance was not perfect. During a strategic planning meeting in 2000, "a physician stood up and said, 'We don't get the outcomes that we should.' I remember looking at our CEO and saying, 'What is this about?' All of a sudden the levee broke, and all of this information came flowing out," Carter says.

That kind of open sharing of information requires trust between the board and senior leadership. One of the best ways for board members to build such trust, Carter adds, is deceptively simple: Ask hospital executives where the board should be focusing its efforts, instead of the other way around. "If the board starts to tell the administration what to do, the administration says, 'Wait a minute. You're a layman. Who are you to tell us what to do?'"

Experts wanted

Which raises another question: Should board members seek out clinical expertise--just as they might recruit accountants or bankers to the board for their financial acumen--to better fulfill the board's responsibility in the quality realm?

Ideally, a board should represent diverse skill sets, and having trustees with expertise in multiple areas is helpful, says Anderson. But if the social dynamics of meetings result in community board members sitting quietly and merely listening to physicians talk, that is not a good sign. To help engage community board members in the discussion when clinicians are brought on board, senior leaders should provide a reporting framework that discloses relevant facts and "makes it a lot easier for outside individuals to get their teeth into what is really going on," Anderson says.

Melissa Coleman, a board member at 128-staffed-bed Delnor-Community Health System in Geneva, IL, agrees that clinicians can bring a unique perspective to the board. While community board members can read about unplanned readmission rates or inpatient risk-adjusted bed turns, she says, the medical staff can offer actionable suggestions for improvement. Clinicians can also relay the board's message back to the medical staff, adds Todd S. Hewell, III, MD, a board member at Delnor and chairman of the quality committee.

For his part, Tom Van Dawark prefers to seek out trustees with a quality background in other industries like manufacturing. As the board chairman at Virginia Mason Medical Center in Seattle, he says that having the outside expertise and third set of eyes is the most important element. With a background in maritime transportation, Van Dawark is no stranger to quality oversight. As CEO of one of Seattle's largest shipyards, one of his main responsibilities was ensuring that no oil spilled into the water--a significant environmental and liability concern. "We have very capable medical-experienced individuals as part of our team, but we have found that people who come from other businesses and look at quality from their perspective can merge their thoughts with that of management to come up with the best results," Van Dawark says.

Regardless of whether hospitals have clinical expertise on the board, community board members need to be vocal. "It has been a nice learning experience for me," says Hewell. "There are people from so many different industries that we are really able to share different quality statements and leadership ideas."

You get what you measure

To ensure that the hospital is headed in the right direction, board members should establish a set of metrics and review them on a regular basis. "Moving the quality needle is hard work," says Carter. "It is not instant mashed potatoes. It takes time and patience and a lot of fortitude to stick with it."

The board at 418-licensed-bed Cincinnati Children's monitors 11 quality indicators, including serious safety events, ventilator-acquired pneumonia, codes outside the ICU and staff satisfaction. The board receives quarterly reports on these measures and sets new quality targets each year. The measurements should be specific, says Carter. "We have set the goal to reduce serious safety events by 50 percent by June 30, 2008. Then another 50 percent by June 30, 2009, until we are hopefully at zero."

Virginia Mason's board has set an ambitious goal for the 285-staffed-bed facility. "We determined that our vision was to become the quality leader with no boundaries--nationally, worldwide or locally," Van Dawark says. To achieve that vision, the board's quality committee--of which Van Dawark is a member--meets every month and reviews the hospital's progress on specific quality metrics, including surgical-site infections, avoidable falls, medication errors and avoidable cardiac arrest in the hospital.

"For us it is seeking zero defects, not just reducing errors," says Gary Kaplan, MD, Virginia Mason's chairman and CEO.

But lofty goals don't necessarily require complicated measurement tools. The board utilizes a very simple dashboard--red, yellow, green--that illustrates which quality goals are on target and which areas need further investigation, says Van Dawark. "The dashboards need to be at a very high level, because it is really the management's responsibility in the detail. It is the board's responsibility to set the strategy and hold ourselves and management accountable," he says.

Establishing accountability

Opinions vary on exactly how often board members should review data showing the hospital's progress on its quality goals. Some organizations review such information quarterly, while others might see it monthly. The consensus, however, is that quality data should be as close to real-time as possible. If the board sets a goal to increase profit margin by 5 percent, for example, trustees don't disappear for a year and come back to see if it was accomplished, says Reinertsen. "They monitor the performance month to month, carefully, and if it is not going in the right direction, they start asking some tough questions of the management. Exactly the same thing has to happen for quality," he says.

Tying executive bonus compensation to quality goals is another way boards can demonstrate they are serious about improving quality. At Cincinnati Children's, 70 percent of senior management's compensation is tied to quality measurements, says Carter, adding that 40 percent of that figure is tied to organizational goals that are shared by the entire senior leadership suite. "They all have common goals, and it focuses the group's attention," he says.

Similarly, about 150 of Virginia Mason's managers are on a variable compensation program that aligns incentives with improvements in quality, says Kaplan. "We have a very clear alignment of executive compensation for all of our executives for our quality and safety goals that are approved by the board on an annual basis."

Culture of quality

While senior-level accountability is critical, quality should not be a priority at only the management level. "It needs to filter down to all the people in the organization," Coleman says--including everyone from physicians and nurses to housekeeping staff. To that end, the board should define what quality means for the organization as a whole, communicate that message, and hold the entire staff responsible.

That means standing firm in some potentially delicate situations. If a clinician or another staff member consistently violates a safety rule--a physician who consistently ignores mandatory timeouts prior to surgery, for example--boards cannot ignore the behavior, says Reinertsen. "Boards and management teams historically have flinched when they have had this test because the physician is a prominent doctor or an important source of revenue. But the board can no longer flinch."

Additionally, board members must maintain consistent oversight of one more group: themselves. Trustees who actively demonstrate their commitment to quality help embed it into the culture of the organization. "The board chairman should embrace quality as a strategy and lead or support the CEO into this field on a much more public basis," says Anderson at Cincinnati Children's.

For instance, boards should build adequate resources into the budget to support quality and make sure to celebrate quality and safety milestones. Some board members are even doing rounding activities with physicians or executives, says James A Rice, Ph.D., vice chairman of The Governance Institute. "Being visible and showing that they care enough to get out and govern by walking around. Those are the kinds of things that really help set the tone from the board level," Rice says.

Strategic opportunities

Using quality as a strategic differentiator in today's healthcare environment is not easy. Not only are hospitals nationwide trying to improve quality, but the concept of quality is also a moving target--no one is certain which quality metrics various government entities will decide to emphasize in the future. But by establishing what quality means for their organization and building it into the culture, processes, and every decision the hospital makes, trustees can position their facility to be a quality leader despite an uncertain future.

Hospital boards and senior leaders can easily get caught up in the current set of measures, says Krentz. "But if you truly have good quality and are not just playing to the measures, whatever set of measures comes out four years from now, you will do well on."

Ultimately, board members also need to understand that effective governance doesn't mean addressing everything at once. "We need to have urgency, but we also need to have focus as we look at the numerous public reporting metrics and other quality objectives that the plans and payers are putting forward," says Virginia Mason's Kaplan. "At the end of the day, we have to keep first and foremost in our mind the patient. What is going to have the biggest impact on improving the health and well-being of the patients that we serve?"

Carrie Vaughan is assistant managing editor with HealthLeaders magazine and editor of HealthLeaders Community and Rural Hospital Weekly. She may be reached at

Patient Perspective

Delnor-Community Health System begins each of its quality committee board meetings with a story highlighting a patient experience that didn't go quite as planned at the hospital. For example, the patient may have acquired an infection, had to be readmitted or experienced a delay in service, says John Hubbe, vice president for medical and legal services and the executive support for the quality committee.

The stories have been told by the patients themselves, members of the medical staff and executives, including Hubbe. "Having the patient actually come in and talk to the board can be uncomfortable, but a fair amount of discomfort isn't bad," says board member Melissa Coleman. "It makes things happen. It compels people to push initiatives along and really make a commitment."

In some instances, the stories--which have been part of the quality committee's meetings since January 2006--are relayed to the whole board, as well, says Hubbe. The quality committee meets every other month for roughly two hours, and the committee spends a minimum of 25 to 30 minutes on these stories. "A good 25 percent of our time is focused just on the patient experience," Coleman says.

This type of transparency is an important component of the healthcare industry's re-emphasis on quality, says Todd S. Hewell, III, MD, chairman of the quality committee and a board member. "Issues that long ago were kept concealed are opening up not only for the quality committee, but the board and entire hospital." Delnor's board, which started devoting more time to its quality improvement agenda about four years ago, concentrates its effort on four major indicators--unadjusted mortality rate, unplanned readmission rate, patient flow (bed turns) and patient harm, such as medication errors, pressure ulcers and healthcare-associated infections. The board uses clinical dashboards to keep track of the hospital's progress, and the patient stories not only help set up the agenda for the quality committee's meeting, but they also "bring the data to life," says Hubbe. Rather than seeing abstract data on infection rates, for instance, the stories put a face to that figure. "It makes it real," Coleman adds. "Otherwise, you are looking at movement in the numbers and what is our goal. This really brings it home and makes it come alive."

-Carrie Vaughan

By the Numbers

Virginia Mason Medical Center

  • Nearly 5,000 staff members
  • More than 16,000 inpatient visits
  • 12 public board members
  • Focus on quality began in 2001
  • Reduced inpatient falls from 3.42 falls per 1,000 patient days in 2006 to 2.64 falls per 1,000 patient days in 2007 as of October
  • Reduced central line infections in the critical-care unit from 22 in 2005 to 11 in 2006 to 3 in 2007 as of October
Cincinnati Children's Hospital Medical Center
  • 9,760 total employees
  • 26,804 inpatient admissions
  • 35 board members
  • Focus on quality began in 2001
  • Reduced incidents of ventilator-assisted pneumonia from 80 in fiscal year 2005 to 9 in FY 2007
  • Reduced surgical site infections from 95 in FY 2005 to 42 in FY 2007
Delnor-Community Health System
  • 1,619 total employees
  • 9,550 inpatient admissions
  • 19 board members
  • Focus on quality began in 2003
  • Decreased its unadjusted mortality rate by 25 percent between FY 2005 and FY 2006, and by 18 percent between FY 2006 and FY 2007
  • Improved its pneumococcal vaccination rate from around 20 percent in 2004 to 99 percent currently

Review, Then Correct

Any time staff members at Virginia Mason Medical Center believe a process or procedure is incorrect, they are expected to stop the procedure, call for a "patient safety alert" and discuss the issue at hand (see If It Ain't Broke, Fix It). There are various categories for these timeouts--with the most significant being "red PSAs."

As part of the board's oversight of the hospital's quality and safety, it is the quality committee's responsibility to review every red PSA that occurs each month. The board also requires the committee to approve and sign off on the corrective action before it can be implemented, says Board Chairman Tom Van Dawark.

The team charged with reviewing the red PSA presents its recommended corrective action to the board members and explains why it thinks the action would be successful in ensuring there is not a repeat of the occasion, he says. Even though none of the public board members on the committee have medical training or experience, "it is a very robust discussion," he adds.

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