Governance in Healthcare: Leadership for Successful Improvement

Governance in Healthcare:
Leadership for Successful Improvement
̶̶ Dan LeSueur,

© 2016 Health Catalyst
Proprietary. Feel free to share but we would appreciate a Health Catalyst citation.
Governance in Healthcare
What separates healthcare organizations
who excel at consistent and continuous
outcomes improvement from those
who do not?
It’s a thought-provoking question; one
that has been asked of me many times;
and one that has caused me great
reflection on this journey I’ve been on
for the past ten years to fundamentally
transform healthcare.
Dan LeSueur
Technical Operations, VP

What’s the biggest contributing factor to success
when it comes to outcomes improvement?
Superior technology?
Really smart people?
Dumb luck?
While these all play a role, none strikes
me as the most important.
The one thing that stands out to me as
the single greatest predictor of success is
effective governance.

By “governance,” I rely on the definition
from Weill and Ross in their book,
IT Governance:
… the framework of decision rights and
accountability that encourages desirable
behavior and utilization of scarce resources
in the achievement of a shared objective.”
This entails organizational structures and
the processes of decision making,
communication, and information flow,
appropriately allocating scarce resources
to their highest and best use, within well-
understood objectives.

Given the right parameters and the
empowerment to make decisions within
those parameters, individuals generally
make good decisions that optimize
resource utilization.
The primary function of governance is to
establish these parameters and create
the structure and space for individuals to
appropriately allocate scarce resources.
Make it easy for people to make
prioritization decisions.

If the rubric for making these decisions is
unclear, then teams will unintentionally
inject waste into the outcomes
improvement efforts.
That is, instead of spending time
improving things, team members will
spend time wondering or debating about
what to improve.
They will constantly feel a tug of war
between shifting priorities—satisfying
many but not excelling at any.

Sound familiar? If team members are feeling
this, it may be time for some introspection
and adjusting.
These four principles provide a framework
for evaluating the current situation:
• Engage the right stakeholders.
• Establish a shared understanding of objectives.
• Align incentives and rules of engagement.
• Practice disciplined prioritization.

The Four Principles of Effective Governance
Whether an organization has recognized room
for improvement in its executive governance
approach or the need for a more comprehensive
overhaul, these four guiding principles, and the
steps behind them, will lay the foundation to
transform healthcare at that organization.

Principle 1: Engage the Right Stakeholders
Step #1—Make the Call to Action
The call to action initiates an outcomes
improvement strategy within the
organization.
It establishes the point on the horizon to
become the destination for all team
members.
This destination is generally established
by the recognized leader, a CEO, or a
visionary within the institution
accountable for its strategic vision.

Step #1—Make the Call to Action
Often, this communication is prompted by
some sentinel event, sparking a desire for
excellence: a patient harmed, a legal action,
a miss on company targets or national
benchmarks, etc.
This call to action, or statement of vision,
should be established in writing and
communicated via one-on-one meetings,
leadership huddles, mass communication,
posted announcements, and must flow
outward, from boardroom to cubicle.

Step #2—Form the Leadership Team
Recruit the right mix of people to serve on the
Leadership Team. Effective executive governance
depends on a balance of executive roles.
By including a variety of stakeholders, leaders
ensure that everyone responsible for aligning with
and executing on the vision has a voice.
Include stakeholders benefiting from the initiative
in addition to those feeling the expense burden.
Include owners of scarce resources too, whose
buy-in is critical to success.

In addition to multidisciplinary representation,
consider the core competencies of the individuals
who will lead—the innovators, first followers, and
early adopters. Do they have what it takes?
The innovator needs to stand alone and take risks
to present a new idea. If it’s a breakthrough
concept or major shift, they need take this first
step without concern for what others might think.
They also must keep early processes easy to
follow, so first followers can jump in effortlessly.

The first follower also needs to be comfortable
taking risk and so confident in the movement that
they invite more people (early adopters) to join.
Soon, most of the organization is following the
innovator’s lead. The new idea is no longer an
anomaly or risk, but a standard part of operations.
This team of innovators and early adopters is the
linchpin of executive governance. The innovators
are the torchbearers of key initiatives—disrupters
willing to confront skeptics head on and stand
behind the vision.

Look for the “Paul Reveres” (those with the
courage to take initiative and think creatively) and
then put them in the places that enable them to be
most effective.
Early adopters bravely follow the innovators,
working to sustain and grow their work.
They realize the role of innovators and early
adopters in generating momentum and build
strength—to create a snowball effect for the
organization’s strategic and operational vision.

Principle 2: Establish a Shared Understanding of Objectives
Step #1—Identify High-Level Opportunities
Identify the organization’s high-level opportunities
for outcomes improvement. Then prioritize those in
a data-driven, strategic way to target areas for early
and meaningful change where the highest value
proposition exists.
A key process analysis (KPA) tool (such as the
Health Catalyst Key Process Analysis tool) can help
generate insights into improvement opportunities by
combining clinical and financial data to determine
need, impact, and cost savings potential.

Step #2—Assess Organizational Capabilities and Readiness
The organization might be ready and able to
take on some areas of change, but need
more preparation in others.
Determine capabilities and readiness early
so that the work isn’t stalled once in progress.
Perform a self-assessment or structured inter-
views with a third-party improvement expert
to carefully examine these areas: processes,
methodologies, infrastructure, skills, and
cultural factors.

Step #2—Assess Organizational Capabilities and Readiness
At the end of the day, governance is all about
the allocation of scarce (valuable) resources.
As an organization, the capability and readi-
ness will be largely defined by the scarce
resource on which they’re relying for data-
driven quality improvement.
Typically, this will include analytical resources
—data analysts and architects—as well as
business subject matter experts (whether
clinical, financial, operational, or other).

Principle 3: Align Incentives and Rules of Engagement
Step #1—Adopt a Consistent Improvement Methodology
The improvement methodology is the framework
by which leaders organize teams, assign
accountability, and empower individuals
in improvement work.
The methodology will include responsibilities
from reconciling conflicts of interest among
stakeholders to making sure everyone is
aligned with and supportive of the organ-
ization’s top priorities.

Step #1—Adopt a Consistent Improvement Methodology
Think of the methodology as the improvement
training plan.
The process of establishing and adopting a
common methodology throughout the
organization does require formal training for
the Leadership Team.
The goal of this training is to build confidence
in the improvement methods and develop
the skills and practices to implement it.

Step #2—Align Incentives
Effective executive governance aligns everyone within
the organization around the same vision, goals, and
accountabilities. Make outcomes improvement goals
part of the compensation framework.
Look for and eliminate scenarios where individuals
feel conflicted when engaging in outcomes improve-
ment because their opportunity costs are too high.
In other words, “put your money where your mouth is.”

Step #2—Align Incentives
An established compensation or incentive structure
encourages clinicians, data experts, and business
leaders to participate in improvement while keeping
balance with their other responsibilities.
In the case of clinicians, this means making it
possible, and appealing, for clinicians to participate
in improvement while not compromising patient care.
This can be done by making improvement work and
goals part of job descriptions at all levels, rather
than work that may appear additional or optional.

Step #3—Keep Polarities in Balance
In the context of healthcare governance, polarity
refers to a pair of values that we tend to see in
adversarial terms—this VERSUS that—but are,
in fact, interdependent and mutually valuable.
For example, in improvement work, strive for
quality AND low cost. These do not need to be
competing priorities.
Keep polarities in the organization balanced
by identifying the ones that could impede
improvement and then developing a plan to
foster their coexistence.

Principle 4: Practice Disciplined Prioritization
Step #1—Analyze Opportunities and Determine Priorities
In a previous step, they have already identified the
high-level opportunities of focus for the organization.
Now that these are selected and leadership is
mobilized around those areas, it is time to opera-
tionalize the vision by prioritizing desired, measurable
outcomes within those strategic areas.
This will require some deeper analysis to identify
specific areas of opportunity. This becomes a fantastic
leverage point for engaging front-line stakeholders in
shaping and understanding the shared objective.

Step #2—Allocate Resources
The owners of resources throughout the institution
need a consistent rubric for making resource
allocation decisions.
To help make the investment successful, leaders
need to manage investment allocation across
properties. If there’s one thing that maximizes ROI,
it’s effective governance.
Identify the key resources the health system needs
for improvement work, particularly those high-value
assets for which supply doesn’t meet demand.

Step #2—Allocate Resources
For example, if the organization is committed to
data-driven quality improvement, then it might be
short on analytics resources.
If I am a director in one of these areas, then I need
to know how to process and prioritize requests for
my scarce resources.
Effective governance can and should do the favor
of establishing the decision-making rubric to
protect these often-overburdened resources.

Step #3—Establish Prioritized Teams
Improvement teams comprise the innovators and
early adopters who drive improvement and inspire
others to follow.
These team members play critical roles in
permeating the vision and protecting priorities.
They build strength and create a snowball effect for
the organization’s strategic and operational vision.
The Leadership Team starts with the guidance
team and sub-teams responsible for aligning
improvement goals and incentives across the
organization.

Step #3—Establish Prioritized Teams
Separate teams take responsibility for specific areas,
including oversight, coordination, and direction.
Members of the guidance teams are the influencers,
champions, and true leaders from each level of
governance structure.
They support participation in improvement at all
levels of the organization and keep the work in
check by communicating with the Leadership Team
and within their own team with regular meetings
and updates.

Step #4—Extend and Sustain Improvement
Outcomes improvement needs to become a way of
life, rather than an isolated project.
To ensure that improvement work becomes and stays
an integral part of the health system, they’ll need to
put practices and processes in place to operationalize
and grow ongoing improvement work.
They’ll do this by establishing standardized ways of
reporting among improvement teams, setting times
and methods for communicating to the whole
organization, and planning regular re-assessment to
monitor ongoing value and accountabilities.

Step #4—Extend and Sustain Improvement
Consider eliminating the term “project” from their
vocabulary when talking about improvement efforts.
Projects connote a start and an end, whereas these
efforts should be ongoing, with dedicated focus and
consistent team membership.
Many “lean” efforts fail to be sustained because they
lead up to some big improvement event that achieves
a major goal, but then everyone goes back to their day
jobs and the improvements are not sustained.

Why Every Health System Must Prioritize
Executive Governance
Effective executive governance lays a strong
foundation for decision making, resource
allocation, and prioritization that can weather
the storm and withstand the unexpected.
Just as it’s unwise to invest in high-end finishes
on a home with too weak a foundation to
protect them, healthcare leaders shouldn’t
organize around priorities without the structure
to ensure they are successfully implemented
and sustained.

Why Every Health System Must Prioritize
Executive Governance
The governance structure won’t happen on its own.
With the right leadership, however, systemwide
understanding of objectives, appropriate rewards for
work towards improvement, and strategically driven
priorities, organizations can form the structure
needed to succeed in outcomes improvement work.

For more information:
“This book is a fantastic piece of work”
– Robert Lindeman MD, FAAP, Chief Physician Quality Officer

More about this topic
Link to original article for a more in-depth discussion.
Governance in Healthcare: Leadership for Successful Improvement
The Best Organizational Structure for Healthcare Analytics
John Wadsworth, Technical Operations, VP
The Top Five Essentials for Outcomes Improvement
Leslie Hough Falk, Customer Engagement, VP; Ann Tinker, Engagement Executive, VP
Leading Adaptive Change to Create Value in Healthcare
Dr. Val Ulstad Dr. Val Ulstad, MD, MPA, MPH
Outcomes Improvement Governance: The Quest to Achieve More with Less
Tom Burton, Co-founder and Executive VP & David Grauer
The 4 Clinical Teams Needed to Drive Sustainable Improvement
Susan Easton, Engagement Executive, VP
Tracy Vayo, VP of Knowledge Services
Kirstin Scott, Senior Medical Writer
Kathleen Merkley, DNP, APRN, Sr. VP Clinical Improvement Line

Dan LeSueur has been developing and implementing the core products and services of
Health Catalyst since February of 2011. He started as a data architect, moved into a
technical director role and is now a Vice President of Client and Technical Operations.
Prior to joining Health Catalyst, Dan owned and operated a management consultancy
for five years that assisted ambulatory practices in the implementation of electronic
health records and data-driven management methodologies.
In this venture he served as data architect, business-intelligence developer, and strategic advisor to
physicians and practice owners in the strategic management and growth of their practices. Dan
holds Master’s degrees in Business Administration and Health-Sector Management from Arizona
State University and a Bachelor of Arts degree in Economics from Brigham Young University.
Other Clinical Quality Improvement Resources
Click to read additional information at www.healthcatalyst.com

Governance in Healthcare: Leadership for Successful Improvement

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