Trends in Healthcare & Governance

During the COVID-19 pandemic, hospitals and health systems were forced to focus on day-to-day operations with little time to strategize for the future, while competitors were able to invest in growth opportunities, technology advancements and care delivery innovation. This led to a strategic gap and now healthcare leaders are questioning whether the operating model that worked well in the past will continue to serve them in the future.

The American Hospital Association held a discussion with Adventist Health about the health system’s journey to reinvent it’s operating model with a focus on integration, agility and honoring the organizational commitment to its mission.

In this case study, Adventist Health reported the following leading practice strategies:

• refocusing on the needs of their community helped Adventist be more clear on what matters most;
• to create an integrated platform of care with the best quality and at an affordable cost, Adventist used technology and team integration to optimize the patient experience;
• focusing on the value-based arena, physician organization, care delivery and empowering local leadership to make real-time decisions;
• balancing day-to-day demands with long-term strategy by building capabilities to offer services across the full continuum of care and partnering with employers and payers in unique ways to deliver care that meets community needs; and
• creating a Capital Management Council that decides where to invest major capital year-round, focusing on community needs and where things are headed.

When reinventing your operating model and improving performance, Guidehouse recommends that you consider:

• improving the ambulatory footprint, whether centered on surgery, diagnostics, retail offerings, urgent care or other services, to achieve sustainable growth;
• nurturing a high-performing provider network that aligns physicians and groups with an intentional focus on retaining business that’s already attributed to that particular provider network;
• striving for robust, diversified revenue strategies by expanding portfolio services such as hospital-at-home or virtual offerings;
• standardizing workforce processes to ensure accountabilities are clearly defined across functions and roles to eliminate redundancies;
• supporting employees with sufficient training and development as people are asked to do new things and change the way they deliver care;
• embracing a comprehensive digital strategy that encompasses artificial intelligence, machine learning, automation and other forms of consumer enablement and engagement; and
• achieving a disciplined “operating rhythm” featuring routine monthly operations reviews and quarterly strategic reviews to provide discipline to the task of allocating capital in ways that are aligned with vision and strategy.

For more on this topic, attend our 44th Annual Trustee Conference, Sept. 12 - 14, in Saratoga Springs (registration to open in July). Thought leader Shawn DuBravac will kick off the conference with a discussion on redefining hospital strategy. He asserts that leaders must recognize the forces driving change — such as technological advancements, policy shifts, changing patient expectations and economic pressures — to effectively redefine their approach to healthcare delivery. Leaders who are forward-thinking and embrace and leverage these forces can guide their organizations toward sustainable success. Read more in Shawn DuBravac’s blog, Transforming Healthcare: Navigating Technological Innovations, Policy Shifts, and Changing Patient Expectations.

Information for this article was obtained from:

• Reinventing Your Operating Model to Address Disruption and Integration, AHA Podcast
• Reinventing the Health System Operating Model, Guidehouse

Healthcare trustees are discussing the use of artificial intelligence in hospitals and health systems, but have you considered how it can be used in the boardroom to enhance board governance?

How are boards using AI today?

Believe it or not, some boards already use AI to help their organizations become more modern, efficient and productive.

One of the most common ways professionals use AI is to summarize and synthesize documents. An intelligent assistant product, for example, could allow you to upload a financial statement and ask it to summarize it and identify the top five risks. The output would be akin to what an analyst would produce, but much faster.

Right now, AI is great at eliminating administrative tasks and streamlining operations. Some HANYS member executive assistants and board coordinators use AI to schedule meetings and transcribe meeting minutes.

How will AI evolve in the boardroom?

AI tools will be embedded in most software we use during the next few years. AI will allow boards to offload mundane tasks so they can focus on true governance.

AI might enrich boardroom experiences through:

• Efficiency: Boards will be able to use AI to make all board work more efficient, such as developing agendas and key documentation.
• Better governance: With less time needed for research, board members can focus on governing more effectively.
• Better compliance: It can streamline compliance processes by automating tasks such as legal document review (with oversight from your legal department) and data privacy compliance.
• Risk mitigation: Predictive modeling and machine learning help AI foresee risks that may not be otherwise apparent.
• Data-driven focus: AI models can provide boards with insights into what’s working well, what isn’t and how to improve problem areas.
• Navigation through unconscious bias: AI can mitigate biases by thoroughly analyzing objective data and providing impartial insights.
• Fostering enhanced collaboration: It allows directors to seamlessly exchange information, orchestrate meetings and share insights across time and geographical divides.
• Driving decision-making: It can process vast volumes of data and provide boards with comprehensive and real-time intelligence. Soon, AI may play a pivotal role in decision-making processes that could empower boards to identify opportunities, assess risks and strategize with precision.

How should your board prepare?

• Board education: Your chief technology or chief information officer can host an informational session or invite an independent expert to guide your board’s approach to managing potential AI risks and opportunities.
• Back up your policies: Connect AI to the compliance and regulatory guidelines that are already in place.
• Consider your AI strategy: Make sure this new technology aligns with your business goals. Develop timeframes for training and create benchmarks for reviewing proper implementation.
• Remember AI’s limitations: Verify any AI-generated data and use sound judgment on what to trust. No technology can replace the judgment of an experienced board member. Consider these tools as supplemental support that informs the board’s decision-making.

Consider how the COVID-19 pandemic forced boards to meet virtually. We were forced to adapt, adopt and embrace new approaches to technology. We’ve experienced emerging, disruptive technologies before, and AI is just another example. AI is a present-day reality so stay informed and keep it on your radar.

Looking for information on what healthcare leaders need to know about AI in healthcare? Attend an informative session at this year’s HTNYS Trustee Conference on Sept. 12 - 14 in Saratoga Springs. Stay tuned for more details coming soon.

Information for this article was obtained from:

• Addressing AI’s Future Role in the Boardroom, OnBoard
• AI in the Boardroom: The Inevitable Evolution of Decision-Making, Forbes
• How to Invite AI into the Boardroom — And How it Will Impact Governance, Chief Executive

Healthcare trustees are responsible for ensuring their hospital or health system provides safe, high-quality care. Recent data show room for improvement — trustees should prioritize this topic in boardroom discussions.

Safety in healthcare 2024

Press Ganey’s new report, Safety in healthcare 2024, explores emerging trends and strategies top-performing healthcare organizations leverage to improve patient and employee safety. Key takeaways include:

• People feel less safe in hospitals. The gap in patient perception of safety in inpatient and outpatient settings is now 2.5 times wider than before the pandemic. While patients in medical practices and ambulatory settings felt safer in 2023 (81.9%) compared to pre-pandemic levels (78.1%), perceptions of safety in hospitals fell 5.1% to 68.5%.
• Workplace culture is improving. Following record lows in 2021, perceptions of workplace safety culture are improving. Employee views of safety within their organization have risen 1.2% over the last two years, but nearly half still report unfavorable perceptions of safety culture.
• Assaults are increasing. Reported assaults against nursing personnel jumped 5% year over year. In 2023, the rate of reported assaults against nurses increased to 2.71 per 100 nursing personnel, from 2.59 the previous year.
• Safety outcomes show continued momentum. The biggest improvement was seen in catheter-associated urinary tract infection rates, which are lower than pre-pandemic levels.

Oversight of care quality and safety is paramount

The importance of trustees’ oversight of quality and safety has grown in recent years as healthcare organizations face new regulatory and accreditation requirements. Evidence shows that organizations with engaged boards have better quality outcomes; yet many struggle with quality and safety oversight.

Based on data from The Joint Commission’s hospital surveys in 2022, more than 40% of hospitals had citations in the “leadership” chapter. The third most frequently cited leadership standard (LD.01.03.01) addresses the role of the governing body: The governing body is accountable for the safety and quality of care, treatment and services.

Framework for effective quality oversight governance

A framework for effective quality oversight can clarify trustees’ roles, responsibilities and actions that support staff and patients. Boards can prepare to fulfill their responsibilities by taking the following six steps:

1. assess performance;
2. select board members;
3. gain knowledge;
4. set the agenda;
5. oversee quality; and
6. create the culture.

Resources for trustees

For more details on this framework, read the American Hospital Association Trustee Insights article, Leadership Matters: A Roadmap Toward Effective Governance of Quality and Safety. For more resources on this topic, refer to:

• HTNYS’ new Boardroom Essentials video series: How trustees can impact quality and patient safety; and coming soon, Making sense of public hospital quality ratings.
• HTNYS’ Board Responsibilities resource library includes resources on the board’s role in quality oversight.
• TJC’s Board Education Resource Center offers information and educational resources, descriptions of regulatory and accreditation requirements, tools and templates that trustees can use to learn more about quality. In addition, video messages from hospital leaders and board members offer leading practices, and innovative ways to engage and use the expertise of the board.

Information for this article was obtained from:

• Leadership Matters: A Roadmap Toward Effective Governance of Quality and Safety, AHA Trustee Services Boardroom Brief. © Used with permission of the American Hospital Association
• Safety in healthcare 2024, Press Ganey.

Healthcare trustees have a responsibility to ensure their community has equitable access to quality care. To achieve this, health equity must be prioritized and embedded in your organization’s strategic plan. It starts at the top; when a board member serves as a health equity champion it helps to emphasize its importance organization-wide.

How trustees can begin this work

• Educate your board on the definitions of health equity and diversity.
• Create a health equity committee or hold health equity discussions in an existing committee, such as quality or governance.
  • System subsidiary boards (40%) and freestanding hospital boards (46%) reported that they discuss diversity, equity and inclusion at the full board level, and system boards reported that they discuss it in a committee (57%), according to the American Hospital Association’s 2022 National Health Care Governance Survey Report.
• Ensure there is a strategy to develop and strengthen community partnerships to help with board recruitment, workforce expansion and resource sharing. These partnerships can also create a better understanding of the community served, enhance access to care and improve outcomes.

How trustees can prioritize this work

• The board and executive leadership must hold themselves accountable, and this accountability should flow through the rest of the organization until it becomes part of the culture.
• Ensuring your board is diverse is critical to represent the community you serve.
  • A recent AHA Institute for Diversity and Health Equity survey reported that a majority of voting board members are predominantly white (76%) and male (61%), with people of color and women representing 27% and 35%, respectively, indicating much room for improvement.
  • The survey also highlighted a need to recruit younger members, as the proportion of board members age 50 or under continues to decline while those age 71 and older are increasing.
• Encourage your leaders to use the AHA Health Equity Roadmap to assess progress on your health equity journey and chart a path forward. The Lever for Diverse Representation in Leadership and Governance provides examples of how to implement this change.

Making the business case for prioritizing health equity

• Data show that racial inequities are associated with substantial annual economic losses nationally:
  • Health disparities contribute to an annual economic loss of $42 billion in untapped productivity, $93 billion in excess medical care expenditures and $175 billion in premature deaths, according to a national study conducted by the W.K. Kellogg Foundation and Altarum.
  • By 2050, the United States stands to gain $8 trillion in gross domestic product by closing our racial equity gap.
• Regulatory agencies and accrediting bodies are placing more emphasis on greater board involvement in equity issues and addressing health disparities.
  • CMS is adopting health equity-focused measures in the Inpatient Quality Reporting Program, including capturing specific hospital activities to address health inequity in strategic planning, data collection and analysis, quality improvement and leadership engagement.

Questions trustees should ask in the boardroom

• Is health equity part of your board and organization strategy?
• Does your board have a board education strategy on health equity, diversity and inclusion?
• How can your board benefit from diversifying its composition?
• How could your board restructure current meeting practices and service requirements to make serving on your board more attractive to diverse candidates?
• What are the roadblocks to pursuing health equity?
• Do trustees understand the business case for health equity as it pertains to your organization?
• What community partnerships can the organization leverage to have a more inclusive and equitable relationship with the community?
• Has your executive leadership engaged with the AHA’s Health Equity Transformation Assessment? Is your board using the Board and Leadership Lever to assist in developing and enhancing your health equity strategy?
• What are your board’s quantifiable goals to diversify its membership while ensuring proper representation from historically marginalized groups?
• Has your full board had at least one conversation about your organization’s work on DEI?

Organizations may be at different stages in their work to address health equity. There is no one-size-fits-all approach; rather, organizations should ensure that their strategies reflect their specific characteristics and the community they serve.

Additional resources

• Use HTNYS’ Health Equity and Board Diversity online resource libraries.
• Stay tuned for the next video in HTNYS’ new Boardroom Essentials series: What trustees need to know about health equity, coming soon!

Information for this article was obtained from:

• It Starts at the Top: How Boards Can Prioritize Health Equity, AHA Trustee Services Boardroom Brief. © Used with permission of the American Hospital Association.
• DEI Data Insights: Leadership and Governance in Hospitals and Health Systems, AHA Institute for Diversity and Health Equity.

As hospitals and health systems continue to deal with significant economic challenges, it makes sense that many healthcare organizations look to conventional expense reduction methods. However, in today’s environment, clinical quality improvement is a great way for leaders to address pressing financial challenges while laying the groundwork for future success. An effective quality improvement program can increase revenue, reduce costs, decrease burdens on employees and enhance both the patient and provider experience.

Three critical elements for quality improvement initiatives:

• Prioritization: Identify the most important quality areas to address, which may be based on a combination of factors, including the improvement of internal quality metrics, external consumer ratings like CMS’ Star Ratings or Leapfrog Hospital Safety Grades, financial criteria and strategic growth considerations.
• Analytics: Provide actionable insights through data and reports to end users, and track key metrics to measure improvement.
• An infrastructure based on systems and collaboration: In addition to the quality team, clinicians, frontline nurses, clinical documentation, coding and other staff must participate.

Other elements essential to quality improvement success include:

• A top-down commitment to quality: Leaders must reinforce a culture where quality is a top priority.
• Communication and change management: These are key for setting expectations about how the quality initiative fits into existing workflows and proactively engages employees.

With shifts in payment models, poor quality is now more costly than ever. For example, studies have found that surgical site infections are typically associated with an additional seven to 11 postoperative hospital days, preventing the hospital from filling medical-surgical beds with new patients.

As trustees provide oversight to their healthcare organizations, they should remember that quality initiatives result in better patient care and stronger finances.

Resources

• For more information on the board’s role in quality oversight, refer to the HTNYS Board Responsibilities online resource library.
• Stay tuned for HTNYS’ new series of educational videos on quality, coming soon. You’ll be able to watch them on your own, add them to your next board meeting agenda or include them in your new-member onboarding process.
• You can also access a variety of resources from HANYS’ Quality Advocacy, Research and Innovation team, including information regarding clinical collaboratives, learning networks and issues impacting clinical and operational oversight.

Information for this article was obtained from: Quality transformation: How hospitals are striking a balance between the bottom line and better care, Becker’s Hospital Review.

As we enter this new year, many publications have identified trends expected to impact the healthcare industry in 2024 and beyond. Common themes include continued financial pressures, workforce shortages and issues associated with commercial health insurers.

Hospitals and health systems had to cope with a multitude of challenges in 2023, including rising costs, labor shortages and endemic COVID-19. Trustees and healthcare leaders should stay informed about emerging trends nationally and locally to help strategize and position your organization for success in a changing environment.

McKinsey & Company and Becker’s Hospital Review summarized the following trends in recent publications:

Financial pressures

• Although hospitals’ margins improved in 2023, they still face significant long-term financial challenges. Greater labor and supply expenses and patient acuity will continue to challenge hospitals in the year ahead. Organizations will continue to focus on attracting and retaining patients to increase revenue and improve payer mix. Healthcare organizations will need to implement targeted approaches that focus on specific services with opportunities to increase volume and revenue.

Workforce shortages

• Healthcare workforce supply, especially nurses and physicians, will continue to lag behind the growing demand to take care of a growing, older population.
• Mental and behavioral health needs continue to grow, with the current workforce supply unable to keep pace.

Payers

• The biggest payers are 10 times the size of the largest health systems. Hospitals face challenges with negotiated rates, claims denials and slow, costly and inconsistent reimbursement policies.
• Medicare and Medicaid combined are larger than commercial payer sources. These government-funded programs present significant concerns for hospitals and health systems as they reimburse below cost and well below commercial rates.
• Enrollment in Medicare Advantage will continue to grow. It now covers more than half of the Medicare population, giving big payers even more influence.
• One of the world’s biggest insurers, UnitedHealthCare/Optum, has become the largest employer of physicians in the country. Optum added nearly 20,000 physicians in 2023, meaning it now has nearly 90,000 employed or affiliated physicians and another 40,000 advanced practice clinicians.

Technology solutions

• Technology solutions such as artificial intelligence, automation, electronic health record optimization, virtual care programs and remote patient monitoring can close some care gaps by making administrative and clinician efforts less burdensome.
• Healthcare has lagged behind other industries in AI adoption. Healthcare leaders are challenged to evaluate and ultimately unlock the value of transitioning to AI solutions unique to their organization.

Information for this article was obtained from:

• 12 healthcare trends and issues we are following for 2024, Becker’s Hospital Review, Jan. 2, 2024
• Healthcare’s next chapter: What’s ahead for the US healthcare industry, McKinsey & Company, Dec. 19, 2023
• What to expect in US healthcare in 2024 and beyond, McKinsey & Company, Jan. 5, 2024