1. Effective Governance During
Transformational Healthcare
Change
Zach Griffin, MBA/MHA
General Manager, The Governance Institute
March 18, 2015

2. Learning Objectives
• Identify the specific governance challenges
prompted by systemic industry changes
• Explore how governing boards are successfully
responding to systemic industry changes
2

3. Why is this Topic Relevant?
3

4. Agenda
• Baseline
– History & Factoids
– Board Stats
– Perspective of the Trustee
• Scan
– Trends
– Challenges
– Three Examples of Boards Adapting/Evolving
• Conclude
– Key Takeaways
– Q&A
4

5. How Did the “Board” Get Its Name?
5
17th-18th century
England
“Board” of wood
used to eat on
“Board Room”
“Board Chair”
Benches and a
chair at the end
“Room & Board”
Impolite to put
arms under table
“Above Board” “Board Game”
Bryson, Bill. ”At Home: A Short History of Private Life.” New York: Doubleday, 2010. Print.

6. Average Board Statistics
Attribute Average Moving?
Board size
# of physicians
# of females
# of ethnic minorities
Board member age
Board member age limit
# of committees
Meeting frequency
Meeting duration
Have a consent agenda
Have executive sessions
6
2013, The Governance Institute, Biennial Survey of
Hospitals and Healthcare Systems
Moving?











Average
13.5 people
2.5
3.7
1.3
57.3 years
72.3 years
5
10-12 times/year
2-4 hours
71%
56%

7. Board Chair Background
7
2013, The Governance Institute, Biennial Survey of Hospitals and Healthcare Systems

8. Number of Board Committees
8
2013, The Governance Institute, Biennial Survey of Hospitals and Healthcare Systems

9. Most Prevalent Board Committees
• Governance/Nominating (92% of Systems have one)
• Finance (86%)
• Quality and/or Safety (85%)
• Executive Compensation (85%)
• Executive (75%)
• Investment (70%)
• Audit/Compliance (67%)
• Strategic Planning (46%)
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2013, The Governance Institute, Biennial Survey of Hospitals and Healthcare Systems

10. Average Number of Board Members
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2013, The Governance Institute, Biennial Survey of Hospitals and Healthcare Systems

11. Number of Board Meetings Per Year
11
2013, The Governance Institute, Biennial Survey of Hospitals and Healthcare Systems

12. Average Board Meeting Time Devoted
to Reports, Strategy, and Education
12
2013, The Governance Institute, Biennial Survey of Hospitals and Healthcare Systems
36.8% 16.8%

13. Changes in Board Structure to Prepare
for Population Health
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2013, The Governance Institute, Biennial Survey of Hospitals and Healthcare Systems

14. Changes in Board Structure to Prepare
for Value-Based Payments
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2013, The Governance Institute, Biennial Survey of Hospitals and Healthcare Systems

15. System Governance by Size (# of Beds)
15
2013, The Governance Institute, Biennial Survey of Hospitals and Healthcare Systems

16. Overall Board Performance
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2013, The Governance Institute, Biennial Survey of Hospitals and Healthcare Systems

17. The Perspective of the Trustee
• Accountable for all outcomes – quality, financial,
clinical, patient satisfaction, charitable contributions
• Three main jobs – policy making, decision making,
oversight
• Strategy not operations – not always natural or easy
• Learn healthcare and then keep up
• CEO hiring and evaluation
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18. The Trustee Reality
• Healthcare is complicated
• Most board members are non-clinical and do/did not
have careers in healthcare
• It is hard running a multi-million/billion dollar
company with volunteers (12% of boards
compensated, 75% < $10k/yr)
• Right now is the slowest pace of change in
healthcare we will all experience
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19. Shifting Trends
• Physician Relations
–Referring vs. employed
• Healthcare Reform
–New regulations, new rules, new models, new
patients
• Consolidation
–Systems, board hierarchy, portfolio mentality
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20. Physician Relations
• More physicians on the board
• More physicians on the payroll
• New models needing clinical knowledge at the
board table
– Clinically Integrated Networks (CIN)
– Accountable Care Organizations (ACO)
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21. Healthcare Reform
• Payment reform - volume to value, risk contracts
• Care models - CIN, ACO
• Transparency - quality outcomes, community
benefit
• Triple Aim aspirations
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22. Consolidation
• “Systemness” - a different way of thinking
– Portfolio management mentality
– Scale resources and leverage size
• Merge, Partner, Acquire  pick one
• Board hierarchy
– System, regional, hospital, other
– New roles, powers, alignments, and expectations
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23. Trends Shaping Healthcare Priorities
1. Physician Engagement: Partners with Aligned Incentives
2. Revenues, Operating Costs, and Financial Sustainability
3. Care Model Redesign and Clinical Integration
4. Employer Exchanges and Health Plans
5. Competitive Positioning: Consolidations, Affiliations, and
Partnerships
6. Information Technology: Supporting New Care Models
7. Transparency and Accountability
8. Workforce/Culture of Accountability
9. Population Health Management: Easier Said Than Done
10. Governance
23
Masters, Guy M; Valentine, Steven T. “Ten Trends That Will Shape Healthcare Strategic Prioities in 2015.” E-Briefings. Jan 2015.

24. Governance Trends
1. Ensuring business judgment rule protection
2. Risk oversight
3. Director time commitment
4. Strategic planning
5. Board composition
6. Committee effectiveness
7. Talent development
8. Cybersecurity and governance
9. Tenure refreshment
10. General Council and Chief Compliance Officer coordination
24
Peregrine, Michael W. “2015 Governance Trends for Non-Profit Hospital and Health Systems.” Governance Notes. The Governance Institute, Feb. 2015.

25. Agenda & Time Check
 Baseline
 History & Factoids
 Board stats
 Perspective of the Trustee
 Scan
 Trends
 Challenges
– Three Examples of Boards Adapting/Evolving
• Conclude
– Key Takeaways
– Q&A
25

26. Three Examples of Boards Adapting
26
Schummers, Dan F. “Governance across the Continuum: Leadership Accountability for Creating Healthy Communities.” Signature Publication.
The Governance Institute, June 2014.

27. • Hospital and Health System accountability expands beyond
quality and safety of care delivered to overall health of
community
• Reimbursement models shifting from fee for service to risk
assumption for defined populations
• Gravitational pull moving center of healthcare experience to
non-hospital based care
• Organizations are achieving success, however, no ‘one
size fits all’ approach generating success
Why Focus on Community Health?
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28. Common Focus and Success Measures
• Role of Healthcare Board
– Prioritize mapping of Community Health Needs and
Community Health Assets
– Identify linkages between Community Assets and design
new methods of collaboration
– Unite disparate elements within a community towards
common goal of health
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29. Health Partners
• Largest consumer governed not-for-profit healthcare
organization in US
• 1.5 million members
• CareGroup of 1,700 providers (750 PCPs)
• 6 hospitals owned
• 1 hospital joint venture
• Serving Minnesota and Western Wisconsin
“We seek to improve health and well-being in partnership with
our members, patients, and community.”
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30. Health Partners Perspective
• Crossing the Quality Chasm & Triple Aim created “seismic
shift” & provided “framework going forward”
• Personalized healthcare experience of CEO Mary Brainerd
compels drive to patient centered system
• Culture of continuous quality improvement
• Decision to transform both operations and culture to
achieve goals
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31. Transforming Governance to Attain Ends
• Health Transformation Committee
– Estimate goals for care and health transformation
– Develop appropriate measures of success
– Collaborate in learning with senior leadership
– Embed goal of system transformation into culture of organization
“To hold a whole organization accountable for results, the board
really needs to know—and have a role in determining—how we
are making the changes.”
Mary Brainerd, CEO, HealthPartners
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32. Role of Local Boards in Expanding System
• Importance of aligning around a common mission and
vision
• Expansion is a way of bringing vision into communities in
which it exists
• Local experience and wisdom from community trumps fear
of change resistance / conservative nature
• Local board’s role essential for health of their community
• Elevate local trustees to assume greater responsibility,
aggressive goals & track metrics
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33. Partnership, Listening & Learning
• Expansion is a means to executing the Triple Aim and
fulfilling mission
• Formal partnerships “inflection points along continuum of
collaboration and partnership”
• Local board’s role to “speak up” and advocate for
community
• Structure must follow strategy
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34. Genesys Health System
“Genesys will be recognized as the premier, values-based
healthcare system in the region by focusing on the needs of people
in their pursuit of health and well being.”
• GRMC ‘Anchor’ Hospital
• Home Health, Hospice
• Ambulatory Care Centers
• Athletic Center
• Physician Hospital Organization
• Serving Central Michigan
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35. Genesys Health System Perspective
• Community healthcare services matched pace with General
Motors
• 1990s “Severe life altering change”
– From 80,000 employees to < 8,000
– Consolidation of 4 hospitals into 1 new build
– Formation of Genesys Health
– Joining with Ascension Health
• Decade to absorb impact of traumatic change and “let the dust
settle”
• Change resilience: Commitment to move out of silos and
become true health system
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36. • Building a common vision
– Representatives from community, physicians & small
number of hospital executives
– Executives are ‘stewards’ of new asset
– Collaborate to create 25 year vision for hospital, system and
community
• Role of board and leadership
– Disseminate new vision across system
– “Chipping away at it every quarter”
– Understanding and alignment spread organically
Creation of a True Community Asset
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37. • Board’s view of its fiduciary responsibility must expand
– “Move beyond myopia of the hospital as central to the health
system”
• Increasing provider engagement and representation on the
board to enrich deliberation
• Ensuring community board members don’t “abdicate”
responsibility to new provider trustees
• Community Health Needs Assessment and Advocacy
Committee
– Members drawn from leaders of free clinic, FQHC, fitness center,
locals schools, colleges, etc.
– Partners in understanding unique needs of community
Vision & Governance Outside of the Hospital
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38. • Leverage data driven understanding of community health
needs to participate or lead multi-sector health alliances
– Effect change
– Insight to larger community view of health needs and assets
– Share knowledge with participants
– Build relationships
• Greater Flint Health Coalition
– Tackling community health issues e.g. smoking bans, caesarean
rates, diabetes, etc.
– Deploying best practices e.g. Respecting Choices®
– Managing cost: FQHC and PCMH to manage ED volume
Leadership in Community Alliances
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39. “Nobody here ever thought that GM could go bankrupt
and yet that happened. So it sets this mindset of
‘don’t resist change, lead it,’ because it can be
devastating if you aren’t paying attention to what’s
going on and aren’t continuing to reinvent yourself.”
Betsy Aderholdt, CEO, Genesys
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40. Bellin Health
“The people in our region will be the healthiest in the nation.”
• 167 bed hospital
• BMG 90 PCPs
• In and Outpatient psychiatric services
• Fitness, sports medicine & rehabilitation
• Home Health
• Bellin School of Radiologic Technology
• Bellin Health FastCare
• Serving Green Bay and surrounding areas
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41. Bellin Health Perspective
• 2000 increased competition in market triggers cuts to services and
positions
• 2002 forecasted 30% increase in employee health coverage cost
• No clear understanding of what was driving cost and where
opportunities for improvement lay
“We realized we needed to get better information about the way
we were spending the dollars, and we also realized that people
using the health benefit needed to be more invested in the
benefit, be more invested in their own health.”
George Kerwin, CEO, Bellin Health
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42. • Health Risk Assessment for every employee
• Senior leadership conducts frequent conversations to explain
‘why’ & ‘importance’ for employees and system
• Created system for premium discounts tied to HRA scores
• Discounts provided to employees and spouses for tests and
screening
• Push to get all employees engaged in primary care and
preventive services
• Outcome: 33% reduction in health costs in 2 years
– Improvement in HRA scores
– $13 MM savings in first 8 years
Providing Direction Through Data
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43. • Model addressed health needs of community & needs of
local business owners to manage health cost
• “Business Health Solutions”
– Consumer driven health plan, onsite services, HRA, employee
incentive structure, etc.
– 2,500 companies partner with Bellin
– Employer costs 20% lower than national average
Spreading Success Into the Community
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44. • ‘Bellin Corporation’
– 60 members, cross section of community & providers, includes
past trustees
– Talent bench for board recruitment
• Longevity valued in board and senior leadership
• Avoid stagnation through continued education
• “Common Past” facilitates risk taking by shifting focus to
long term gains
– Approach to M&A
– Expansion of primary care network
Building Board Strength Through
Experience & Consistency
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45. • Most important change to Board composition was increase
in patient and family members
– Contextualize what a healthy community could be
– Share strategies, imagine and design ways to link health assets
to community needs
• Family physician members trained in terms of managing
people and keeping them healthy
• Business community members have unique understanding
of health impact on economics and needs of community to
improve health of workers
Evolving Composition of Board
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46. • Integration of community health into the Mission and Vision to guide your future
decisions
• Assessing broad community health needs and assets to prioritize your
initiatives
• Healthcare and governance remain local, even in era of consolidation,
leverage those with roots in community (patients, providers and business
owners)
• Objective measures of community health impact must be selected, measured
and shared with local health partners for Board to hold leadership accountable
• Know how and when to use your brand; when to lead from the front v. facilitate
and participate with community health stakeholders for the betterment of those
you serve
• Board fosters a culture accepting change, promoting courage in uncertain
times and ensuring alignment to Mission and Vision.
Lessons From Our Three Examples
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47. Key Takeaways
• Board Rooms as important as Operating Rooms
• “Board”, “Board Room”, “Board Chair” origins
• Average Healthcare Board stats
• Trustee perspective & reality
• Healthcare and governance trends
• Boards aligning to community health
– HealthPartners, Genesys, Bellin
• Adapt, Evolve, Stretch
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48. Agenda & Time Check
 Baseline
 History & Factoids
 Board stats
 Perspective of the Trustee
 Scan
 Trends
 Challenges
 Three Examples of Boards Adapting/Evolving
 Conclude
 Key Takeaways
– Q&A
48

49. Contact Information
Zach Griffin, MBA, MHA
General Manager, The Governance Institute
(a service of National Research Corporation)
Phone: 1-877-712-8778
Email: zgriffin@governanceinstitute.com
www.governanceinstitute.com
www.nationalresearch.com
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50. Bio: Zach Griffin, MBA, MHA
Zach is General Manager of The Governance Institute, a service of National Research
Corporation.
The Governance Institute provides trusted, independent information and resources to
board members, healthcare executives, and physician leaders in support of their efforts
to lead and govern their organizations. Zach began his career as a Management
Consultant at Ernst & Young, and has worked for industrial conglomerate 3M and
information technology focused Thomson Reuters in a variety of strategy, marketing,
and product development roles.
Zach received a Bachelor of Science degree from the University of Iowa in Mechanical
Engineering and later earned a Masters degree in Business Administration (MBA) at
Indiana University and a Masters degree in Healthcare Administration (MHA) at the
University of Washington. Zach and his wife Dana live in Seattle with their two sons
and dog.
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51. Bibliography
• Bryson, Bill. ”At Home: A Short History of Private Life.” New York: Doubleday, 2010. Print.
• Frakt, Austin. "In Hospitals, Board Rooms Are as Important as Operating Rooms." The New
York Times. The New York Times, 16 Feb. 2015. Web. 19 Feb. 2015.
• The Governance Institute. “Governing the Value Journey: A Profile of Structure, Culture, and
Practices of Boards in Transition - 2013 Biennial Survey of Hospitals and Healthcare
Systems” Signature Publication. Fall 2013.
• Masters, Guy M; Valentine, Steven T. “Ten Trends That Will Shape Healthcare Strategic
Prioities in 2015.” E-Briefings. Jan 2015.
• Peregrine, Michael W. “2015 Governance Trends for Non-Profit Hospital and Health
Systems.” Governance Notes. The Governance Institute, Feb. 2015.
• Schummers, Dan F. “Governance across the Continuum: Leadership Accountability for
Creating Healthy Communities.” Signature Publication. The Governance Institute, June
2014.
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