Tx health trustees governance

Texas Healthcare Trustees
Leading Transformation and
Change in the Post Pandemic Era:
From Trauma to Transformation
Les Wallace, Ph.D.
President, Signature Resources Inc.
Author: Principles of 21`st Century Governance
1

18 Months of Total Chaos…
followed by resuming traditional
chaos.
ow many of your boards have members with executive
Leadership experience navigating chaos, massive
transformation, and uncertain risk?
2

The Pandemic has given hospitals…
• an overload of trauma to our personnel
• added financial burden in an already
burdened industry
• an unwelcome pause in much of our
strategic Intent
• and a high stakes period of recovery where
attending to the trauma and to much
needed transformation compete for priorities
Hospitals could lose between $53B and $122B this year due to pandemic
Feb 24, 2021 https://www.fiercehealthcare.com/hospitals-health-systems
3

Tracing Pandemic Trauma to Health Care Team
“Prevalence and correlates of stress and burnout a
U.S. healthcare workers during the COVID-19 pande
A national cross-sectional survey study”
EClinicalMedicine, Vol. 35, May 1, 2021
https://doi.org/10.1016/j.eclinm.2021.100879
https://mhanational.org/mental-health-healthcare-workers-covid-19
“Texas Hospitals’ Year-Long Fight”
From the first COVID-19 cases in Texas to the arrival of a groundbreaking vaccine,
we look back at the significant milestones for Texas hospitals. by Emily A. Cheslock
4

Self—reported Burnout and Stress Levels
of Hospital Staff
https://doi.org/10.1016/j.eclinm.2021.100879
5

Where’s Your Governance in the Digital A
Brian Stafford and Dottie Schindlinger, 2019
 Is your board a “foundational board,”
reactive and taking direction from management?
 A “structural board,” more accustomed to asking
questions with a strong oversight focus?
 A “catalyst board,” diverse board perspectives, seeks
insight from peers to innovate, take risks and experime
 A “futuristic board,” driving a strategic agenda with a
focus on innovation and an in-depth knowledge of how
technology is changing their business?
6

Governance in the Post Pandemic Age
Now is a good time
to refresh your board culture!
Can you continue to lean mostly
Toward “caretaking”?
Or, might you need to pick up
your catalytic pace?
7

Disruptions In Hospital Land
Continue Post Covid
 In 2018 Deloitte predicted consolidation will result in a 50%
reduction in health systems by 2024
 21% of all rural hospitals are on the brink of closure in
2020—430 hospitals across 43 states
 Payors will be brutal about “value based payment” and quality
performance aligned with national standards of care and health
outcomes
 Private equity firms will continue to circle our hospitals
 Partnerships / new businesses with non-hospital partners:
insurance companies, medical equipment, pharmaceuticals,
and non-traditional partners, e.g. CVS-Aetna.
 Entrepreneurial boards who understand “marketplace”
dynamics more so than clinical dynamics will outperform in
the near term
8

Post-Pandemic Workforce In Flux
 25-30% of nursing workforce potentially retiring in 3-5 years.
(Brandeis U.)
 Pandemic is causing nurses to change careers earlier.
 A vaccinated workforce challenges hospital policy:
• Require? / Terminate?
• Bonus: $500 to get vaccinated + post bonus for those already
vaccinated.
In Texas…
 Physician shortage statewide projected to increase from 6,218 to
10,330 FTEs in 2032
 Among 35 Dr. specialties general internal medicine is expected
to have the greatest absolute shortage in 2032 of 2,608
 Family medicine expected to have the greatest shortage of
2,495 FTEs
“Texas Physician Supply and Demand Projections 2018-
2032”
Texas Health and Human Services report May 2020.
9

What Transformation Priorities
will we face Post-Pandemic?
 Assuring we have the right board of directors for
a period of chaotic challenge and transformation.
 ”Trauma Informed Attention” to the acute stress /
PTSD manifestations of sustained covid
emergency for our staff.
 Rebuilding the board’s “strategic planning”
infrastructure based on modern board practices.
 Refreshing out governance processes top to
bottom from meetings to committee structure.
10

What Transformation Priorities
will we face Post-Pandemic?
 Accelerating the development / adoption of
digital technologies to serve our communities
and help our staff be more efficient.
 Updating our attention to other organizational
risks: e.g., cyber security, staff retention and
recruitment, emergency redundancy for
power outages, reaffirming our “succession
planning” from top to bottom of the
organizational chart.
 Attending to a “live” barometer of how corporate
culture is doing: employee engagement,
employee development, turnover, coaching and
mentoring.
11

SAMHSA’s
Concept of Trauma
and Guidance for a
Trauma-Informed
Approach
Prepared by
SAMHSA’s Trauma and Justice
Strategic Initiative July 2014
Trauma Informed, Change, and Transforma
Most people don’t resist change….
They resist being changed!
12

Response to Trauma and Leading
Transformation
Share Common Rubrics
 Listening and reassurance
 Inclusion—all actors are given a voice
 Collaboration and empowerment with actions
 Transparency
 Celebrating hospital “good news” about quality / patient experience
 Safety…what’s in it for me? Give me a voice!
 Clarity on vision for the future
 Reasonable (evidence based) reassurance of a purposeful direction
 Outlets for those who feel helpless or powerless
 Mentoring and peer support
13

Gaining Commitment to Change:
Four Fundamental Questions to Answer
Clearly
 Why should we be changing?
Better, more competitive, safer, happier, successful.
What’s in it for me?
 What does the destination look like?
Describe in as much detail as possible.
Show benchmarks if someone else has already gone there.
 How will we get there? Is there a roadmap?
Roadmaps and measurable milestones give confidence.
How will we handle the disruption / pain of changing?
 What’s my role?
How will you use my experience and intellectual capital?
How will you protect me from the fallout of change?
What choices will I have?
14

Use a Proven Model for
Generating Transformative Thought and
Action
John Kotter, Leading Change
15

Use a Proven Model for
Generating Transformative Thought and
Action
John Kotter, Leading Change
 Step One: Create a Sense of Urgency....
 Step Two: Form a Powerful Coalition....
 Step Three: Create a Vision for Change....
 Step Four: Communicate the Vision.... Time
Ten!
 Step Five: Remove Obstacles....
 Step Six: Create Short-Term Wins....
 Step Seven: Build on the Change....
 Step Eight: Anchor the Changes in Corporate
Culture.
16

Change and Transformation
Helical, Not Linear
17

Board
Talent
Strategy
Performance
and
Risk
Governance
Process
Transformation was Happening in
Every Domain of Board Governance Pre-Covid
elf-Assessment: Conduct a post-covid inventory / assessment
and refresh of each of these governance domains.
Slides 45-48
8

Resources for Tracing Governance Transfor
“National Health Care: Governance Survey Report,” AHA Trustee Services, 2020
“Applying Lean Principles to Board Work,” Mary Totten, AHA Trustee Services
2020 U.S. Spencer Stuart Board Index
19

Peer into questions for
the future of your
governance
 Do we have the right people around the Board table?
 Are we investing more in the right strategy for this
environment?
 Do we have a full enterprise risk management approach?
Tracking and mitigating risks beyond financial and
clinical? E.g. cybersecurity, organizational culture,
succession planning, turnover.
 Is our workplace culture engaging staff to be the best they
can be?
 Can the board count on the “institutional chief quality and
patient safety officer” to be accurately tracking outcomes
in real time.
 Have we made the “patient experience” a point of
emphasis?
20

We are Already Familiar with
Payment, Technological, and
Treatment Disruption…
The next big disruption in the hospital space is
board governance:
Board makeup
Governance processes
A Corporate feel to strategy vs. incremental
movement
Leaving bureaucratic models of oversight
“Hospital boards are ill prepared for the future.”
James Orlikoff, AHA
21

Board Makeup:
Trending in Hospital Governance
 Average board age gets younger as a new generation is sought
out
 Diversity gets increased scrutiny by the public and by payors
[AHA has partnered with the Urban League and Unidos US to
increase diversity options for hospitals]
 Full Diversity: ethnic, gender, sexual orientation,
disabilities, age, professional backgrounds…
 Board compensation a certainty [25% of large systems
compensate their boards]
 $25K annually—only if you’re governance certified
 Minimum of 20+ hours a month required of every board member
22

Challenging The Clinician on the Board
 A clinician on the board gives a false sense of
security that the board is “keeping up.”
 The board already hears from the Chief of Staff,
CMO and CNO regularly and has national
“quality standards” to guide oversight with
numerous clinical committees reviewing quality
performance!
 How much to you hear from the “patient
experience” executives?
 Key clinical metrics, trends, issues, are all
available for guidance on-line and are easily
adapted to your community’s experience.
23

Should Your Next Board Member
be…
 IT executive?
 Mergers / Acquisitions expert
 Younger professional?
 Futurist
 Corporate CEO / COO / CFO / CTO
 Regional leader?
 Systems expert?
 “Customer experience” expert?
 Risk management expert?
 “Lean systems” expert
 Organizational transformation expert?
 Strategic planning expert?
If / when your board is paid…
the public scrutiny increases around
competency.
24

Transition Governance Process
to 2021 Standards…
not some future ideal!
 Modern Agendas
 Oversight dashboards
beyond $ and clinical
quality
 ERM
 Committees
25

Future of Governance Process:
Flipped Presentations Cuts out Oral Reporting
From Presentations...
To increased dialogue
You’re moving from hand-to-hand combat during the
pandemic
to a more strategic period and frame of reference.
THIS REQUIRES DIALOGUE!
26

The Flipped Presentation To the Board
 All background reading including “frequently asked questions”
and answers prior to the meeting in executive summary.
 No oral presentations to Board without “pre-submitted materials!”
This especially includes CONSULTANTS!
 An executive summary prior to the meeting scopes ALL
recommendations.
 The “agenda item” therefore begins in “discussion” mode rather
than background mode—thus saving precious face-to-face time for
dialogue.
signatureresources.com/about-us/flip-meeting-improve-outcomes-
engagement-and-satisfaction
https://www.linkedin.com/pulse/getting-your-hands-frog-les-
wallace-les-signatureresources-com-/
27

The Modern
Board
Meeting
has Evolved
The Modern
Board
Meeting has
Evolved
 Convene
• Checking conflict of interest
• Consent agenda
• Past minutes approved
 Performance dashboards, updates and
reports (finance, clinical quality, culture)
Monthly/quarterly?
 ERM: Risk/Compliance reports / updates
Monthly/Quarterly?
 Strategy: updates, adjustments, metrics,
business environment reviews
o Committee Update reports in Consent
Agenda.
o Action items in appropriate section of

Confirm Robust
Organizational Dashboard Tracking
 Financial performance: key indicators
 Patient safety and clinical quality
 Patient experience
 Compliance
 Organizational Culture and Engagement*
 ERM not simply clinical Risk (med staff
committees?)
 Innovation
 Population health
 Community citizenship
What external “quality” standards guide your
standards? e.g. CMS, Consumer Reports Hospital
Safety Ratings, Healthgrades, Press Gainey?
*“Culture eats strategy for breakfast!”
Peter Drucker
29

Enterprise Risk Management
a “corporate” view of risks…a strategic look
across the organization rather than a series of silo views.
 Cyber security issues reaching “pandemic” level
 Power systems / backup redundant
 Strategy risks: too fast, too slow
 Board makeup for future bus. environment
 Population shifts
 Succession / Talent risks
 Innovation / lack of
 Mergers / acquisitions
 Compliance
 Succession planning
 Corporate culture
 CEO compensation
30

Transforming Board Committees:
Old Models in a New Era of
Governance
?
?
?
?
?
?
31

What’s a Quality Committee to Do?
Delegating and Enforcing
Accountability
More oversight—safety, quality, risk management—
delegated to “quality directors” [CMO / CNO /CXO] with
regular board reports.
Review all quality indicators, compare them to typical hospital
quality indicators, set “stretch” standards for the ones with
the most mortality, associated costs, and reimbursement risk.
[Does the board know these?]
Regular reporting to the board:
 Hi priority / risk performance monthly reporting-
dashboard!
 Overall quality performance—lower risk—quarterly
For unwanted variations from expected goals the Board
issues an accountability notice to CEO!
32

Where are the biggest risks in your clinical services?
The medical staff organization monitors these regularly.
Does your quality committee get a “risk report” from
them?
• Medical Staff Committees
• Bylaws
• Care Improvement
• Cath Angio Medical Committee
(CAMC)
• Committee for Professionalism
• Credentials and Privileges
• Ethics
• Health Information Management
• ICU CQI
• Infection Control
• Interdisciplinary Practice
• Medical Executive Committee
(MEC)
• Operating Room Medical
Committee
• Perioperative Services Medical
Committee
• Pharmacy & Therapeutics
• Quality Patient Safety &
Effectiveness
• Well Being Committee
• Stanford Committee for
Professional Satisfaction and
Support (SCPSS)
• Graduate Medical Education
Review
• Patient Safety Committee
• Tissue Committee
33

Transform Strategy Development
“If financial & quality indicators are performing
adequately, strategy becomes 70% of a Board’s
focus”
“The annual strategy review frequently amounts
to little more than a stage on which business unit
leaders present warmed over updates of last
years presentations, take few risks in broaching
new ideas, and strive above all to avoid
embarrassment.”
“Has it become a
primitive tribal ritual?”
McKinsey Quarterly 2002
34

YIKES! How do Future Boards
Sort Through Massive Choices
to find the Right Strategy?
Answer: they adopt a “strategic rhythm.
35

An annual Strategic Rhythm helps
Future Proof Your Organization
Future proofing is the process of
regularly anticipating and discussing the
future and developing methods of
minimizing the effects of shocks and
stresses and taking advantage of future
events.
• “Strategic awareness and thinking
year around.”
• Two strategic retreats a year!
• 70% of meeting time focused on
future facing strategic issues
36

Create More Space
for Strategic Thinking and Dialogue
 Strategic thinking is a curious
and intellectual exploration of
future scenarios and
developing trends that result
in more innovative approaches
to the marketplace.
 Strategic planning is a tactical
process to outline an
execution plan for moving
forward.
37

Becoming a “Futurist” Trustee
“Pay attention to world signals.”
 They follow major trends.
 They conjure up possibilities / scenarios.
 They are “intellectually promiscuous
scanning diverse sources of news, ideas
and innovations.
 They observe and discuss how the best in
class behave.
 The look for “possibilities” rather
certainties.
 They discuss possibilities incessantly.

Transform How Your
Board Approaches Strategy
 Invest more time in scanning the horizon
sensing and detecting the signals of
change happening now!
 Identify the issues that are priorities for
sustaining our ability to survive and
thrive.
 INVOLVE a broad base of physicians,
clinical staff and other staff in learning
about the trends, discussing their
potential impact on the hospital and
discussing priority actions.
 How about a “futures panel?”
 Execute on a “vital few” key
elements…not 10…closer to 5!
39

Hospital Boards of Directors are Now
Focusing on
These Elements of Strategy
 Business and clinical technology infrastructure and
improvement
 Cybersecurity
 Organizational Culture and staff engagement—including
Drs.
 Shifting demographics and population health strategy
 ”Lean” strategy / “rapid process improvement”
 Governance best practices
 Board makeup
 ERM (enterprise risk management)
 Mergers, acquisitions, partnerships (MAP strategy)
40

 Strategy progress updates
 Business environment discussions / new models
 Disruptions
 Scenario thinking
 Tracking community population health shifts
 Developing partnerships / affiliations
 Innovation / “Lean” rapid improvement processes
 Technology / Digital transformation
 Benchmarking peers and competitors
 Patient experience advances
 Governance succession and development
Of Board Agenda
is Strategic
41

The Pandemic Gave Us Permission
to Consider and Implement New
Ideas
42

Board
Talent Strategy
Performance
and
Risk
Governance
Process
Significant New Models Existed for
Every Domain of Board Governance Pre-Covid
Self-Assessment: Conduct a post-covid inventory / assessment
and refresh of each of these governance domains
43

Questions
44

Board Makeup
The mix of
competencies and
professional
experience your
board needs to
match the
changing business
environment and
help navigate the
future.
 Profile of Desired Board competencies / experiences /
diversity…for our future
 Board refresh/term limits; active recruitment / succession
pipeline action plan
 Investment in current Board development; industry seminars &
board reading
 Investment in Officer development
 Certifying Governance literacy
 Thorough Board orientation
 Regular governance self-assessment: macro assessment
every four years; micro each year
BOARD MAKEUP
The mix of competencies and professional experience your board needs
to match the changing business environment and help navigate the future.
45

Strategic Intent
As a strategic
partner, the board
is involved in the
analysis,
consideration and
assessment of
how the future will
unfold for the
organization and
what is needed to
navigate it with the
most success.
 Enhance Board partnership & dialogue with executive team
 Increased board investment in strategic dialogue through
meeting agenda refresh
 Strategic thinking—be innovative & visionary
 More scenario discussions…”what if?”
 Strategic conversations +/- 70% every meeting; 2 retreats a
year
 3-5 year strategic plan with clear accountabilities
 Strategic metrics: outcome / impact, calendar progress,
investment, accomplishment
Strategic Intent
As a strategic partner, the board is a catalyst for the analysis, consideration
and
assessment of how the future will unfold for the organization and
what is needed to navigate it with the most success.
46

Organizational
Oversight
Tracking fiduciary
performance:
finance,
organizational
culture,
customer/client
value and risk. +/-
20% of meeting &
committee time.
 Basic Performance Dashboards: financial, patience
experience, org. culture / employee engagement
 Other “performance” dashboard indicators important to
the organization (innovation, turnover, employee
development, performance of new initiatives)
 Enterprise Risk Management tracking separately &
quarterly
 Annual external financial audit
 Benchmarking / comparing with other successful
hospitals
Organizational Oversight
Tracking fiduciary performance: finance, organizational culture,
Patient experience. +/- 20% of meeting & committee time.
47

Governance Process
Maximizing board meetings and committee work
to effectively utilize board talent and time.
 Efficient agendas with “limited” presentations and increased
dialogue (e.g. flipped meetings)
 70% + investment in strategic dialogue
 Regular self-assessment and governance development plan
 Committee charters and performance: (committee annual
reports of accomplishment & recommended future agenda)
 Board culture expectations and rules of engagement defined
and assessed regularly
 Partnership with the CEO; twice a year CEO performance
feedback
Maximizing
48

Les Wallace, Ph.D.
President, Signature Resources Inc.
Les@signatureresources.com
 Dr. Wallace is recognized for tracking business environment and workplace trends
and their impact upon business and government. His latest book, co-authored with
Dr. Jim Trinka, A Legacy of 21st Century Leadership, outlines the leadership
organizations need in a global, fast moving business environment. His book,
Principles of 21st Century Governance is being used by many boards in the profit
and not-for-profit sectors to design governance development approaches.
 His latest book, Personal Success in a Team Environment is used by individuals
and organizations to improve teamwork, career building and success at work.
 Les is a frequent consultant and speaker on issues of organizational transformation
and leadership, employee engagement, strategic thinking and board of directors
development and governance. His clients include Fortune 100 businesses,
Government agencies, and not-for-profit organizations world-wide where he has
helped with major transformation efforts, building organizational leadership
development, and improving corporate culture.
 Les is a member of the National Association of Corporate Directors and has served
on the Board of Security First Bank and the international Boards of the World Future
Society and Counterpart International. He most recently served on the board of the
Mental Health Center of Denver.
49

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