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Hospitals across the street from each other merge into an integrated system. They wish to combine their obstetrics facilities yet can't decide on the best approach. So as a sunny token of unity, an elevated bridge is built to link the two units.
That cartoon drew laughter when it was shown at the recent Symposium on Governing Integrated Health Systems in Naples, Fla. But it was also symbolic of the unfunny matters trustees face when they fail to govern effectively. And conference presenters implied that failure was the rule rather than the exception.
"Governance should be the engine of integration, but too often it's the caboose-and it has its brakes on," declared James Orlikoff, a Chicago-based consultant.
"Most hospital systems have lousy governance," said J. Ian Morrison, a senior fellow at the Menlo Park, Calif.-based Institute for the Future. "Most trustees are from local communities, and they find it hard to close down a wing that has their mother's name on it."
Most presenters agreed that when a board does choose to act, it is often motivated out of panic and tends to make rash decisions. That's among the reasons why up to 75% of proposed mergers between healthcare systems fail, according to Stephen J. Ummel, national adviser on integrated delivery systems for Ernst & Young, a national accounting and consulting firm.
Or, the speakers observed, just the opposite occurs: A good vision, but too much bureaucracy to execute it swiftly.
Ummel himself was the odd man out in an ill-fated attempt to run the Oak Brook, Ill.-based Advocate Health Care system with two chief executive officers (March 4, 1996, p. 42).
Rockville, Md.-based consultant Barry Bader presented another case in point: Burbank, Calif.-based UniHealth's decision three years ago to close some of its underperforming hospitals.
"It was an astute decision, but UniHealth squandered tens of millions of dollars because their various hospital boards bickered with the system board for months before reaching consensus," Bader said. "Then, when UniHealth wanted to make acquisitions on the physician side, it had difficulty securing quick financing because of the money they had wasted arguing over closing hospitals down."
In response, UniHealth spokeswoman Linda Whitehead said, "It isn't normally our policy to comment about things like this, but (Bader's) statements appear to be completely inaccurate."
The presenters concurred that such gridlock-along with a board's general lack of savvy-leads to health systems that truly aren't integrated, failing to prove their value.
"Bad governance will lead to poor quality healthcare, and the misalignment of doctors and hospitals," Ummel said.
The presenters' advice:
Keep the number of boards within a system to a minimum, and try to make sure trustees do not sit on multiple boards so as to avoid conflicts and gridlock. The main board should have only 11 to 15 members.
It's best to recruit board members with some healthcare-related experience rather than any layperson from the community. Compensation also should be considered.
The health system CEO should be allowed to sit on the board to round things out. However, the board should have the opportunity to meet alone, out of sight of other system executives.
"The board has to develop its own agenda, not that of the administrators," Orlikoff said. Perks like dinner and wine should not be served until after a meeting.
System executives should be asked tough questions and have "their feet put to the fire," Bader said.
"Boards need to move fast, but they also need to question strategies presented to them. If the executives can defend it, it will often work," he added.
Committees should be re-evaluated every year. Ditto for the board's strategy and vision.
A "performance culture" should not only be instigated for the executives, but for the board as well. "You should be able to kick off a board member who is not pulling his weight," Orlikoff said.