Wednesday, March 26, 2008

The Importance of Strong Health Care Governance

As we look at the core competencies of health care leaders in general, and future health care leaders within CHRISTUS Health, one area which is often not developed to the degree necessary, is the knowledge surrounding the governance process. In addition, the importance of governance is often not well articulated by CEOs, and therefore future leaders are often not coached and mentored appropriately in this important aspect of health care.

Let us pause briefly to determine why these observations are the reality today. First and foremost, the past history of governance depicts it as a very unimportant part of health care’s critical success factors. If one took a snapshot of the governance practices in most hospitals 20-25 years ago, one would see that this was a meeting of prominent community leaders who got together, usually once a month, to rubber stamp recommendations from management and then conclude with a large meal, often accompanied by alcoholic beverages.

The governance board of directors often were appointed for life, or had “open-ended terms,” which permitted them to succeed themselves as often as possible. The chair of the board was most likely chosen by popular vote, rather than by his or her talents in managing an excellent committee meeting and cultivating a mutually beneficial relationship with the CEO.

Trying to change this picture has been a daunting task for CEOs. Another factor in the development of successful governance is the concern many CEOs had in permitting governance to become too strong in its review and approval processes, which could create the potential for management decisions to be overridden. Another roadblock has been the tendency of some CEOs to not permit their leadership teams to attend governance board and committee meetings for fear that they might relate something that either the CEO was not aware of, or would place the CEO in a less-than-positive light.

Consequently, the learning experience for many up-and-coming leadership team members for governance training has been avoided. Because we believe in CHRISTUS Health that excellent governance is a critical factor in achieving our goals on our Journey to Excellence, we have removed all the barriers that facilitate poor governance and rather have supported the 10 dimensions of outstanding governance as promulgated by the Governance Institute and have implemented them throughout our international ministry. Those 10 dimensions and their application in CHRISTUS are:

Dimension 1: Independence
Measure: The CEO is the only employee who could be a director and the board char is an independent director, not the CEO
Indicators: • CEO is the only INSIDE director allowed.
• CEO is not the board chair.

Dimension 2: The Interests of the Whole are Represented
Measure: Board should have diversity of gender, ethnicity and talent which represents the mission of the organization
Indicators: Ability of board to reach consensus on most issues with policies that are effective

Dimension 3: A Streamlined Structure
Measure: The system board consists of 15 or fewer members and has a streamlined committee structure with six or fewer committees
Indicators: • System board consists of 15 or fewer members.
• System board has 6 or fewer committees.

Dimension 4: High Ethical Standards
Measure: Board has explicit conflict-of-interest policies and procedures
Indicators: • A written conflict-of-interest policy that applies to system board members is in place.
• The board reviews the conflict-of-interest statements annually.

Dimension 5: Mission Policy & Strategy Focus
Measure: Board spends most of its time ensuring adherence to mission, policy, strategic issues and fiduciary adversity
Indicators: • The board utilizes a constant agenda at system meetings.
• The board devotes 40% or more of its time to strategic issues at board meetings.
• The board uses the organization’s Mission as a “test” for all decisions and policies.

Dimension 6: Effective Size and Configuration
Measure: The board periodically reviews its size and structure to ensure that it is configured for current and future effectiveness
Indicators: The system board has engaged in a comprehensive assessment of its governance arrangements at least every two years.

Dimension 7: Commitment to Continuing Education
Measure: The board is committed to board education and development activities
Indicators: System board members engaged in a set number of hours or more for formal education relevant to their director roles.

Dimension 8: Effective Management Oversight
Measure: The board establishes CEO performance criteria and links performance evaluation to compensation
Indicators: • A formal process for evaluating the performance of the health system CEO exists and is based on predetermined objectives or criteria.
• The CEO’s compensation is linked to his/her evaluation.

Dimension 9: Self-Renewal
Measure: The board has term limits to board membership
Indicators: The board imposes a limit of 3 consecutive three-year terms for system board service. Extension is only made on rare occasions where specific talent is needed, and with the support of the nominating committee and board

Dimension 10: Self-Evaluation
Measure: The board establishes performance criteria for itself and for individual directors
Indicators: • The board uses annual goals or other explicitly-defined criteria to evaluate its own performance.
• The board has written expectations and requirements for board member service.
• The board evaluates itself as a whole and as individual directors against these written expectations.

In addition to adhering to these 10 principles, we have also created a job description for the chair and vice-chair of our board of directors, and have clearly written charters including roles and responsibilities for each of our governance committees. Because term limits for committee and board members are essential to bring new and highly energized people into the governance process on a continuous basis, CHRISTUS Health has also committed time, energy and money to orienting all new board members and committee members both from the regions and business units as well as a the system level on an annual basis.

This new board orientation is staffed by several members of the senior team, including the CEO, and includes presentations on the following areas:
• Mission, vision and values
• Our Journey to Excellence with its four directions
• The CHRISTUS Health planning process, including the three-year rolling strategic plan, as well as the futures task force planning process
• The role of the board in overseeing both the performance and the compensation of the CEO
• A discussion of the clarity between the role of the board and management
• A clear description of the board and committees responsibilities to make sure that quality and patient satisfaction is given a high priority

Next year, it will include also an update on the matrix planning process, which is now being piloted within CHRISTUS Health and will be reviewed in an upcoming blog post.

In summary, the governance process is critical to reaching excellence because it is imperative, on a regular basis, to bring another set of eyes in to review what leadership has determined are the best directions for CHRISTUS Health. Because leadership is “living in the forest” every day, it is important for each of the “trees of the future” to be scrutinized for one final time by these outside people who have the opportunity of asking any additional questions which many not have been answered in both the written and verbal presentation materials provided to them prior to and during the board and committee meetings. The excellent governance processes which have been established throughout CHRISTUS Health’s international system have reaffirmed in most instances that management’s directions and recommendations were most appropriate, and on a rare occasion, suggested (also appropriately) that a recommended strategy would not be undertaken or would be delayed.

Wednesday, March 19, 2008

The Flywheel Concept

We all know as health care leaders, providers, Associates and administrators that the challenges in health care have gotten increasingly complex and will seemingly only increase in their magnitude and complexity for the foreseeable future.

This reality demands that we as health care leaders must be constantly developing new methods for addressing these challenges and hopefully transitioning into innovative delivery models with little disruption and seamless flows for the people in our organizations.

Because of the magnitude of these challenges and the constant feeling that the issues must be addressed totally and immediately, we often let ourselves believe that rapid change is possible and that the “miracle cure” or the alternate answer will become visible to us in a short period of time.

However, looking over my experience in making health care changes in the last 40 years, I constantly must remind myself that health care change is never linear, meaning that we don’t go from A to B at a constant pace. Rather, what we see is that health care change is extremely slow, as we are trying to develop input from the multiple constituencies both at the bedside and in administration to determine not only what they believe are the best answers, but also to develop ownership of the solutions.

This plays out as many steps of progress which are slow and arduous, and encompasses weeks or months--and in some cases, even years. The health care environment is a big ship, which is on most days slow to turn in a new direction. However, with continuing focus and attention to goals--such as those defined in our Journey to Excellence--it has been my experience that we will reach a tip point where the changes, although they are not necessarily as rapid as one would like, do reach an acceleration point which then speeds up the further changes which lie ahead.

My experience was recently reconfirmed in a presentation given by several members of the 6th class of our Senior Leadership Academy participants in their latest session this month. During this session, their required book review was Good to Great by Jim Collins. In it, he speaks of the flywheel concept, which in reality is the concept supporting my observation for health care change over these four decades.

It reminds us that initial change is slow, but with constancy of leadership and clarity of an organization’s mission, vision and values, change can be accelerated. Health care change is no accident—and although the flywheel process is the only process that will work at the end of the day--it is possible to achieve the metrics embedded in our Journey to Excellence. In fact, this has been already been demonstrated by several of our regions and business units.

In hopes that you will be as committed to this learning and energized by hearing Jim Collins’ description from his book, you can click here.

Wednesday, March 12, 2008

Our International Strategy and the Opening of a new Hospital in Mexico

We have previously discussed the strategic drivers for our CHRISTUS Health umbrella strategy, which is causing us to evolve our portfolio in the next several years to approach the one-third acute care, one-third non-acute care, one-third international services goal.

The last one-third, our international strategy, has been recently expanded with the opening of the new CHRISTUS Muguerza Reynosa Hospital in Reynosa, Mexico, which is directly across the border from McAllen, Texas. Before we discuss the specifics of this new campus, let us connect the dots to the specific drivers of our international strategy.

In 2000, we were called to explore the possibility of entering a partnership with the family who established the Muguerza hospital in Monterrey in the 1950s. We implemented a partnership in 2001, fulfilling our international strategy in Mexico. Based on our brand recognition and our high quality of care and driven by our Journey to Excellence, we were invited to expand into other hospitals in Monterrey and then into hospitals in other states in Mexico.

Along with this expansion, we developed an adjacency strategy, which includes our convenient clinics and our ambulance services and also developed a separate corporation to care for the poor in each community into which we expand. This corporation, known as Adaleida Lafón, now consists of six clinics and short-stay hospitals with the plan to open in three additional locations in 2008. In addition, the adjacency strategy will encompass the development of a senior campus program which will hopefully be implemented in 2009.

So where does Reynosa fit into these strategies? An additional direction to our international strategy, which was developed in 2006, was to look into building new hospitals and clinics in communities directly across the U.S. border in Mexico where there are 400,000 people or more who do not have reasonable access to high-quality health care presently. Nearly 40 communities fit this description, and Reynosa is the first one where we have fully implemented a strategy in response to the great need identified.

At present, we are identifying the next two sites for similar campuses and will use the learnings from a thorough debriefing on the Reynosa experience to make sure these future projects are done even more efficiently and effectively. The reason these are being identified as cross-border strategies for CHRISTUS Health is that people in the proximal U.S. communities have the ability both to walk and drive across the border to seek health care in the state-of-the-art clinical campuses. Thereby we are meeting the needs of both U.S. and Mexican citizens while at the same time enhancing our cultural competency in delivering health care to the growing Hispanic communities in the United States.

Now, let’s look at the Reynosa project more specifically:
On March 3, CHRISTUS Muguerza Reynosa hospital held a grand opening and blessing ceremony. Reynosa is located in the Mexican state of Tamaulipas.

This hospital required an investment of $19 million U.S. Dollars, and is a 25-bed facility designed to provide primarily outpatient services. Its operating room capacity, imaging capability and patient flow design is a new concept in Mexico.

Reynosa’s ER is the largest emergency room in a private hospital in the entire state of Tamaulipas. The technology in place is of the highest caliber, and the physicians selected to serve on the hospital medical staff have been hand-picked for their excellence in medical care and interest in innovative service delivery.

The innovative ideas in this new model, including facility design, patient flow and through-put processes, medical staff standards and increasing community access to service will be carefully monitored and tested over the next year.

Wednesday, March 5, 2008

The CHRISTUS Talent Management Program

On Feb. 7, we recognized the completion of our first Executive Development program (which we originally called the “Talent Management” program) with the graduation of 16 CHRISTUS executives who spent the last year on a learning journey. Participants in the year-long program were each assigned an executive coach to work with throughout the year. They worked with their coaches to create a formal development plan and attended three learning sessions. These sessions focused on negotiations, cross-cultural competency and Catholic theology and identity, highlighting our community in ministry.

As I have said here before, leadership development is critical for CHRISTUS in order to guarantee that we are “growing future” leaders who can ensure that our ministry is successful into the future. I want to congratulate these leaders and acknowledge them for contribution hard work this past year.

The Associates who participated in the inaugural year-long program recently shared their learnings gained throughout the year and provided valuable feedback to CHRISTUS designed to enhance the program going forward. A dinner to celebrate the accomplishments of the participants was hosted by the CHRISTUS Senior Leadership Team.

The learnings from the first year of the CHRISTUS Executive Development Program will be applied to enhance the program in 2008. CHRISTUS has already seen benefits from the process that will enhance the leadership competencies for the organization.

Consistent with our core value of excellence, we work continually to improve processes and build best practices, and this program is no different. Although the members of the first Executive Development class volunteered to participate, the second year participants were nominated by our regional CEOs and senior leaders. Our Talent Management committee then reviewed the performance and other assessments of each nominee and selected 16 participants for the 2008 program.

The 2008 Executive Development Program began on Feb 12. The class year was launched with a session highlighting the program’s objectives, an explanation of the coaching process and detailed information about what participants can expect. The agenda included exercises and discussions designed to promote participant relationships and heighten self-awareness.

CHRISTUS Health’s expectations with respect to each participant’s obligations were also covered. The coaches for the program have taken the time to learn about the ministry and the foundational documents that distinguish CHRISTUS as a Catholic health care system. They also have learned of the CHRISTUS Journey to Excellence, as well as the unique operational challenges faced by CHRISTUS executives as leaders serving in a non-profit, Catholic, faith-based organization.

The program coaches have also learned about the initiatives taken to position CHRISTUS positively in the marketplace and the efforts being made to establish CHRISTUS as an “employer of choice.” All of the coaches are former executives or business owners who have had practical “profit and loss” experience. They also have extensive, first-hand experience in working with all aspects of development including the emotional, psychological, physiological and spiritual dimensions of human behavior.

This is the newest program added to the CHRISTUS Associate development portfolio and complements the wide variety of programs already available. Other key programs include:
• CHRISTUS Academy
• CHRISTUS Mentorship Program
• CHRISTUS Center for Management Excellence (CCME)
• Leadership Enrichment
• Online Learning
• Workforce Development