Rural Health Resource Center

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Board Development and Leadership The Road to
Performance Management
Terry Hill, Executive DirectorRural Health
Resource Center Duluth, Minnesota
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Technical Assistance Services Center (TASC)

• Federally designated resource center
• Funded by HRSAs ORHP
• Supports Flex Program/CAH implementation in 45
  states
• Located in Duluth, Minnesota

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Current Federal Contracts

• Technical Assistance Services Center (TASC)
• Small Hospital Improvement Program (SHIP)
• Delta Rural Hospital Performance Improvement
  (RHPI)
• Rural HIT Project
• Rural Hospital Education

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Developing PerformanceImprovement Projects

• Medicare Flex Program emphasis on Quality
  Performance Improvement
• Performance improvement/BSC initiatives underway
  in most states
• Supported by state offices, QIOs and hospital
  associations

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State CAH Performance Improvement Projects

• Mississippi Delta Rural Hospital Performance
  Improvement Project
• 120 hospitals in 8 state region
• Components
• - Comprehensive performance assessment
• - Targeted performance and strategic planning
  initiatives
• - Balanced Scorecard initiatives

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State CAH Performance Improvement Projects

• Nebraska P.I. Initiative
• 32 hospitals in BSC initiative
• CAH Executive Leadership initiative
• State Balanced Scorecard Initiatives
• - Alaska - Hawaii
• - Pennsylvania - Oklahoma
• - North Dakota - Arkansas
• - Montana - Illinois
• - Missouri - Kansas

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What Weve Learned

• Hospitals often operate in a crisis management
  mode and dont think strategically
• Strategic planning is done but strategy execution
  is not maximized
• Most rural hospitals lack ongoing board
  leadership and management education
• CAHs are already collecting much information

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CAH Data CollectionStrategic Purpose
Data Collection
Data Reporting
Data Analysis
Typical Effort
Desired Effort

• Hospitals make significant investments in
  collecting data for regulatory or accreditation
  purposes, which limits the value.
• The goals are to push the Effort Curve to the
  right.

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• Even small health care institutions are complex,
  barely manageable placeslarge health care
  organizations may be the most complex
  organizations in human history.
• Peter Drucker

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In the years ahead

• Rural health organizations will undergo profound
  change
• To meet new consumer and payer demands
• To implement HIT
• To be successful in P4P and new insurance models
• This profound change and increasing complexity
  will require performance management systems

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Performance Management Definition
A set of processes that help organizations
optimize their overall performance. It is a
framework for organizing, automating and
analyzing methodologies metrics, processes and
systems that drive business performance Performan
ce management is seen as the next generation of
business intelligence, and helps businesses make
efficient use of their financial, human, material
and other resources. - Wikipedia.org
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Performance Management Definition
A framework for getting people, processes and
resources aligned and moving in the same
direction to achieve strategies that benefit the
customer and the bottom line and result in
organizational excellence. - RHRC
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Performance Management Systems

• Performance Management Systems have 3 distinct
  dimensions
• Strategies- Make strategy the central
  organizational agenda
• Focus and Alignment- Have resources and
  activities aligned with strategies
• Organization- Provide the logic and architecture
  to link all departments and employees behind
  strategies.
• Kaplan and Norton
• Harvard Business School

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The Journey to Performance Management

• Quality Assurance
• Quality Improvement
• Performance Improvement
• Performance Management

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System for Managing Performance and Change in
Rural Hospitals

• Performance Management Framework
• Studor Pillars
• Balanced Scorecard
• It is rare to find companies without some form
  of balanced Scorecard. The difference is that
  more organizations now understand that the
  balanced Scorecard is a strategic management
  system, not just measurement. Strategy maps are
  the catalyst for that shift.
• --James Creelman, Senior Research advisor, the
  Hackett Group

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Understanding the Balanced Scorecard

• A successful Balanced Scorecard program starts
  with a recognition that it is not a metrics
  project
• ITS A CHANGE PROCESS
• Robert Kaplan
• Balanced Scorecard Collaboratives
• Government Summit. Sept. 2004

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The Power of the Balanced Scorecard
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Understanding the Balanced Scorecard

• Its more than most people realize
• Not just a measurement system
• Not primarily about the four quadrants
• Not primarily a benchmarking tool
• Proven Best Practice for achieving strategies and
  breakthrough results
• Successfully adapted for Rural Hospitals

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Definition of the Balanced Scorecard
The Balanced Scorecard is a framework that
helps organizations put strategy at the center of
the organization by translating strategy into
operational objectives that drive both behavior
and performance The Balanced Scorecard
Collaborative, 2004
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Top 5 Reasons to Implement the BSC

• Provides Focus
• Creates alignment of resources and strategy
• Makes strategy real
• Facilitates organization-wide communication
• Tells an organizational story

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Brief History of the BSC
Strategic Management
HarvardBusinessReview Articles
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BSC Perspective
Perspective
Key Question
Financial
Customer
Internal Business Processes
Learning Growth
As financial stakeholders, how do we intend to
meet the goals objectives in our hospital
mission statement?
As customers of our hospitals services, what do
we want, need or expect?
As members of the hospital staff, what do we need
to do to meet the needs of our various customers?
What type of culture, skills, training and
technology are we going to improve in order to
support our key processes?
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HIT Valley of Despair
Implemented and Supported
Implement EHR
Good Choices and management determines level of
productivity and satisfaction
Preferred Future
Leadership and Management Determines how long
youre in the valley of despair.
Productivity
Little or No HIT
Choices, Planning, Execution Determines extent of
Slide
Possible Future
Time
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HIT Theme Strategy Map
Finance
As financial stakeholders, how do we intend to
meet the goals and objectives in the hospitals
Mission Statement?
Customers Community
As customers of the hospitals services, what do
we want, need or expect?
Internal Processes
As members of the hospital staff, what do we need
to do to meet the needs of the patients and
healthcare community?
Learning Growth
As an organization, what type of culture, skills,
training and technology are we going to develop
to support our processes?
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System for Sustaining Performance and Change
2. Empowering Culture a. Change oriented b.
Customer Centered c. Collaborative d.
Designed for retention 3. Ongoing Education a.
On site b. Online
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Systems for Sustaining Performance and Change
4. Skilled Workforce a. Nurses and
technicians b. Medical Staff c. IT
expertise 5. Ongoing Process Improvement a.
Clinical b. Business c. Operations 6.
Leadership Development a. Board b.
Executives c. Middle Management d. Physicians
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Systems for Sustaining Performance and Change

• 7. Technology
• a. HIT
• b. Medical
• c. Management and Systems
• 8. Partnerships
• a. With physicians/clinicians
• b. With other hospitals and health providers
• c. With the Community
• d. With educational institutions
• Access to Capital
• For improvements to plant
• For investment to infrastructure
• Outside Technical Expertise

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On-Track to Performance Improvement
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The Boards Role in Performance Management

• Often overlooked
• Crucial to long range success
• Will require investments of time and
  resources

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Seven Deadly Sins of Ineffective Governance

1. Lack of mission, vision, strategies and focus
2. Resisting change and failure to make strategic
   investments
3. Making do with irrelevant, useless information
4. Lack of hospital board and management alignment
5. Hiring unqualified or ineffective leaders
6. Failure to spend meeting time on strategic
   priorities
7. Inability to understand or relate to physicians

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Board Member Selection

• Start with a plan
• Recruit motivated people with needed skills
• Nominating search committee
• Develop selection criteria
• Consider conflict of interest

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Effective Use of Consent Agenda

• Consent Agenda
• The process of grouping routine items into one
  agenda item for a single vote, aimed at saving
  valuable time for critical issues.
• Pros
• - Frees time for focus on what is important
  strategically and operationally
• - Much more rewarding experience for members

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Effective Use of Consent Agenda
Cons - Places responsibility (and risk) on
members doing their homework before meetings -
Non-board members can perceive railroad -
Requires more work upfront - Can be
counterproductive if members are reading advanced
materials during the meeting
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Acceptable Consent Agenda Items

1. Committee minutes and reports
2. Board minutes
3. Financial statements
4. Operating statistics
5. Quality reports
6. Medical staff reports and minutes
7. Medical staff credentialing and appointments
8. Management/CEO reports
9. Resolutions (background information in advance)

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Source Jim Stokes
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Source Jim Stokes
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Source Jim Stokes
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Source Jim Stokes
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Even if youre on the right track,youll get
run over if you just sit there.

• Will Rogers

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Terry J. Hill, MPA Executive Director, Rural
Health Resource Center 600 E. Superior St., Suite
404 Duluth, MN 55802 218-727-9390, ext.
232 thill_at_ruralcenter.org