More health systems are calling on people from outside their communities to serve on their boards as they move away from the traditional, community-based governance model that has guided them since the 18th century.
That model served providers well until recently, including ThedaCare, a Wisconsin health system with seven hospitals and nearly three dozen other facilities. But the transition to population- and value-based care required a different approach. “Four years ago, we were in the mindset that everyone has to come from the community, but that evolved over the last few years,” Andrabi said.
ThedaCare brought in four new members in 2020, including the former board chair of a rural community hospital and a geriatric neurologist who founded a neuroinformatics and data analytics company. She also happens to be an Asian woman. The health system has attracted national talent thanks to its commitment to population health, which gives board candidates a greater sense of purpose than traditional healthcare concerns like profitability.
Other providers hope to do the same, as healthcare grows increasingly complex and boards seek more specialized expertise that often isn’t available in many communities. It’s also useful for boards to have one or two members who aren’t bound by the community’s social, economic and political relationships because they’re better able to speak freely and tackle difficult issues that could have political implications at the local level.
The pandemic has accelerated the trend. Hospitals and health systems have struggled to meet the needs of their communities, watched fee-for-service revenue disappear and been forced to rapidly overhaul their operations by embracing telehealth and other new ways of doing business. Boards are increasingly looking for help with cybersecurity, digital health and change management. But traditional competencies like finance, strategic planning, quality and safety still lead the way.
In the past decade, hospitals and health systems have increasingly focused on prioritizing specific competencies and skill sets rather than community representation alone.
A board’s ability to govern can suffer if all its members are from the community because many areas lack people with expertise in critical areas like cybersecurity or value-based care. But hospitals and health systems can’t rely on outside experts alone because they might not understand local healthcare issues and be less invested in the community.
That’s why ThedaCare provides its board members with comprehensive education about the needs of its community: to help them identify and close gaps. It’s led to an even greater focus on the social determinants of health. In 2018, ThedaCare committed to a system-wide expansion of its Reach Out and Read program, which encourages families to read and learn together. During each check-up, children in the program receive a book that is age-, language- and culturally appropriate. And the health system’s pediatricians and family physicians use Well Child visits to monitor kids’ development to make sure they’re on track and have conversations with parents about how to incorporate reading into their lives. It’s part of ThedaCare’s long-term investment in population health.
“It’s not just the sustainability of the healthcare infrastructure. It’s also the sustainability of the community overall,” Andrabi said. “If those farms go away, then the community’s health is impacted in a very significant way.”
Experts said the most effective boards are mostly made up of community members, with a few outside experts sprinkled in to provide needed expertise and perspective. “It’s a delicate balancing act,” Accord Limited CEO Pam Knecht said.
But boards have shrunk in recent years, as many experts believe that boards with dozens of members are often too large to govern effectively. According to the Governance Institute, the median board size is 11, which falls within their recommendation that most providers should have 10 to 15 members on their board, depending on the organization’s size. That size allows them to be nimble enough to make decisions, maintain the right mix of backgrounds and perspectives, and fill out board committees.
Yet it also puts more pressure on healthcare leaders to reevaluate their board’s composition.
“You have to be more thoughtful about who you’re putting on the board and why,” said James Orlikoff, president of Orlikoff & Associates and an American College of Healthcare Executives faculty member.
But that doesn’t mean everyone on the board needs to be an expert in every subject. By ensuring that every member has a firm grasp on critical issues, boards can take full advantage of each director’s expertise. They can also hire outside consultants or form new subcommittees to bolster their board’s decision-making.
Orlikoff cautioned that boards run the risk of falling back into old habits if they appoint people based on race, ethnicity or gender alone. “That’s a very slippery slope because it takes you right back into this notion of representational governance,” he said. Instead, boards should ask their members to bring all their knowledge and experience to the table rather than telling them to represent a specific group.