Healthcare Reform From the Inside Out

A select group of U.S. senators and their staffs are writing a healthcare reform bill; the fact that this group is trying to rethink the government's role in healthcare behind closed doors has made some people anxious.  

But there’s another type of group—one that often meets behind closed doors—also making some experts nervous because they aren’t doing enough thinking about their role in healthcare: the boards of healthcare organizations. A new KF report argues that to keep organizations from being swamped by the waves of unrelenting change in the sector these boards need to rethink their priorities. “A healthcare board, like other governance boards, must be relevant,” says Tom Flannery, Ph.D., senior client partner in Korn Ferry’s Executive Pay and Governance practice.

The emergence of large regional and national systems and the ever-increasing complexity of healthcare services and governance are making many boards rethink how members are selected and how their performance is assessed. But there are still boards focused on traditional responsibilities, such as enhancing the organization’s local prestige or, if it is a non-profit, attracting fundraising dollars. “They still see themselves as ambassadors and rainmakers rather than as strategic leaders,” Flannery says.

Flannery, along with Christine Rivers, a senior client partner in Korn Ferry’s Board and CEO Services practice, outline nine steps to strengthen a healthcare board’s leadership in the new Korn Ferry report, “Keeping a healthcare board relevant.” The first step is assessing and rethinking the board’s purpose. Community relations and fundraising still will play a role, but those are secondary to answering questions such as where is the organization headed, what is the board’s unique role in driving the organization forward, and how can the board best add value. At first, many boards may not be able to answer these questions because they don’t have a solid understanding of the broader industry, Flannery says.

Another key step is to ensure that the board has a process to identify, assess and recruit new board members who can help push the board's agenda forward. Traditionally, CEOs had or were given responsibility for identifying board candidates. While they should continue to have a voice in the process, Flannery says boards should ultimately take responsibility of member selection if they are to be truly independent.

Once the board’s composition is set it needs to identify key priorities, one of which should be improving long-term organizational performance. Flannery says boards often focus on compliance or get distracted reacting to short-term tactical issues. He recommends creating and tightly managing a board agenda that captures only those issues that are of critical importance.