With the focus on corporate ethics at a fever pitch nationally, it is no surprise that it was the focal point of the Health Forum’s 20th Annual Rural Leadership Conference Jan. 21-24. About 300 people met at the Pointe Hilton Tapatio Cliffs Resort in an unusually cold Phoenix for the event, which brought together rural administrators and board members, as well as architects, financial backers, academics and others who have a stake in rural healthcare.
The opening general session featured Jamie Orlikoff, president of Chicago-based Orlikoff & Associates and a senior consultant for the Center for Healthcare Governance, also in Chicago. Orlikoff, a governance guru, half-jokingly remarked that “Enron has been very good to me,” and said it is an exciting time to be a governance consultant and researcher. His remarks—“Disruptive Governance: The Board’s Role in Leading Change”—identified typical problems within hospital boards, and offered ways hospital boards could be more assertive, if not aggressive.
“The quality of governance to get your organization where it is today will be insufficient to get it where it needs to be tomorrow,” Orlikoff told a packed house. He cautioned administrators to remember that waiting until a problem must be addressed implies that there will be time to solve it, and in a rapidly changing environment, that is simply not the case.
In today’s post-Enron, Sarbanes-Oxley environment boards must maintain a balancing act between custodial compliance and strategic leadership, Orlikoff said. And sacrificing the latter to satisfy the former can prove damaging.
“If you focus only on custodial compliance, then all you’re doing is ensuring that if your ship sinks, it sinks on an even keel,” he said.
Orlikoff’s realistic suggestions for improvement resonated with Carol Mills, a board member at Bigfork Valley (Minn.) Hospital, a critical-access hospital in a town with a population of 489 people about 70 miles from the Canadian border. Mills said she came to the meeting “thinking our board was pretty good, but I’m realizing how much work we have to do.”
In his talk, Orlikoff outlined the Seven Deadly Sins of Ineffective Governance,” including: representational governance (which he called the “antithesis of integrative organizations”), lack of mission focus, resistance to change, bad governance information, reluctance to remove nonperforming board members, cumbersome governance structures and a lack of board member job descriptions. To expiate the latter “sin,” Orlikoff said boards should have three types of job descriptions: one for the board as a whole, one for individual members, and one solely for the board chairperson. Effective boards have policies, processes and principles, he said, while ineffective boards have personality-driven problems.
To improve, boards should embrace “disruptive governance,” or innovations and practices that change existing behaviors and create a collective body in the process. Some of the suggestions were simple, such as defining and addressing behavior.
“If I do something wrong once on a board, that’s my fault,” Orlikoff said. “If I do it twice, that’s the board’s fault.”
Other ideas included conducting a “governance audit” every two years to reviews policies and procedures; placing a quality expert (not simply a physician) on the board; evaluating individual member performance; engaging in “deep-dive” discussions on relevant topics that could generate productive discussions; rotating board members into different roles and leadership positions; and placing someone outside the community on the hospital board. Orlikoff called this person an “emperor-has-no-clothes” member. Above all, he said, boards should be comfortable with change and “embrace a good fight.”
At an evening networking reception, Randy Behrens, board chairman of 17-bed Manning (Iowa) Regional Healthcare Center for the past 10 years, said that he found all of the sessions to be “extremely entertaining,” and plans to apply some of Orlikoff’s ideas when he returns to Iowa.
“I never thought about evaluating ourselves,” Behrens said. “I think it’s a good suggestion.” He added that he believes his seven-member board would “readily accept change.”
And accepting change might be easier than some administrators may think. Ann Rhoades, co-founder and chief executive of CareLeaders, an Austin, Texas-based company established in 2005 to help healthcare organizations improve their leadership, workforce and patient-interaction systems, told attendees that “doing the simple things, but doing them consistently” is how companies thrive even in struggling industries. A former vice president of the “People Department” at Southwest Airlines and more recently the executive vice president of people for JetBlue Airways, Rhoades is also president and a board member of People Ink, an Albuquerque-based human resources consulting company. In a strategy session, Rhoades shared her experiences in the airline industry to a meeting room filled with attendees, and also connected those lessons to the healthcare industry.
In one story, Rhoades told of an airline CEO who scheduled a random flight each month for the sole purpose of talking to customers. Through his travels, he heard complaints about the coffee served on flights. It turns out the airline had been serving expensive coffee, but was able to save about $100,000 per year by switching to the Dunkin Donuts brand. Similarly, hospital CEOs can learn how to improve their hospitals by making rounds and talking to patients, Rhoades said. And administrators should respond to “bad patient letters” with an immediate phone call. In the end, Rhoades said, developing a great “people-centric” organization means focusing on relationships.
“Great leaders need to look to other great leaders,” and to those who share the same values, Rhoades said.
The second day of the conference opened with a legislative update from John Supplitt, a senior director of the AHA, who said the new Democrat-controlled Congress will likely result in a greater focus on oversight and budget discipline, as well as some push back on market-based reforms. Democratic priorities include disparities in healthcare, mental health parity, increased funding for the National Institutes of Health, stem-cell research, emergence of labor issues and drug re-importation, Supplitt said.
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Given the makeup of the meeting, it was equally unsurprising that there was substantial discussion of how to meet the growing demand for expansion of facilities.
A number of participants attended a strategy session to learn how a critical-access hospital in Iowa funded a $29 million replacement facility with less than $2 million in debt capacity. In addition to a $20 million U.S. Department of Agriculture Rural Development grant, 102-bed Orange City Area Health System funded the project through bonds, reserves, a loan—and $4.9 million in philanthropic contributions. Key donors and an actively engaged community helped contribute to that amount, said Marty Guthmiller, the system’s CEO. This included a “Community Club” where more than 225 families raised $5,000 over a five-year period, as well as a local gas station that contributed one cent for every gallon of gas to the new hospital, which opened May 1, 2006.
When asked about the most important lesson for critical-access hospitals in a similar situation as Orange City, Guthmiller said hospitals should be transparent in their dialogue with the community.
“Take the risk of allowing them to have input. Allow them to have ownership,” Guthmiller said. “Then execute that plan with the leadership you can provide.”
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Not all the talk was serious. In fact, to this Chicago-based reporter at this moment in history, it was most interesting to hear of a bet involving football.
The Super Bowl champion—the Chicago Bears or Indianapolis Colts—will win more than just that Vince Lombardi trophy, the boulder-size championship rings and bragging rights for the owners and fans. Because Health Forum is part of the Chicago-based AHA, the champs will be recognized at the opening session of the AHA’s annual meeting in Washington this May.
During some pre-conference sessions, attendees’ attention was diverted by the NFC and AFC championship playoffs. There was a lot of talk and excitement (as well as disappointment for those of us whose travel schedules conflicted with the games) about the Bears-Seahawks and Colts-Patriots match-ups throughout the official kick-off to the conference.
At one point, the AHA’s Supplitt presented Brian Shockney, president of Logansport (Ind.) Memorial Hospital, with the AHA Section for Small or Rural Hospitals’ Shirley Ann Munroe Leadership Development Award. Supplitt also announced that he and Shockney had made a bet: The fan of the losing team must wear a jersey representing the Super Bowl champions at the opening session of the AHA’s meeting in early May.
So, if you’re planning to attend, you won’t have a hard time finding either Supplitt or Shockney among a sea of dark suits.
