Tuesday, September 15, 2015

Physician Participation in Board of Directors: Transcending the Bottom Line

Two quotes:
Healthcare corporate governance in action

One is from Citizen Kane: "Well, it's no trick to make a lot of money... if what you want to do is make a lot of money."

The other is from a long-past Population Health Blog mentor: "Docs can be good at taking care of patients, or at golf.  The problem is that they can't do both."

The PHB had both in mind while it wrote this just released paper appearing in the American Journal of Medical Quality. Somewhere in the nexus of a) patient care, b) having a sustainable enterprise and c) consumerism, all of the health providers, payers, buyers, vendors, systems and business associates need to know that the bottom line is not about making money and being able to afford a country club membership. 

A low handicap is all well and good, but more is needed.

The message of the paper?

During the era of ascendant managed care in the 1990s, researchers examined the association between physician participation in the governance of health entities and their performance.  The result was several peer-reviewed studies that demonstrated that when there was physician participation on a board of directors, measures of profitability, quality assurance and social performance were higher compared to institutions without a doc in the boardroom.

As PHB readers are well aware, managed care was eventually defanged.  Interest in physician governance waned and the rest is history.

Except things are heating up.  There are millions of newly insured, and healthcare is poised to consume 20% of GDP.  As we look for ways to achieve the Triple Aim, the PHB decided to to dust things off and reexamine the merits of physician governance. 

Here's what it found:

1. Industry Expertise: physicians' broad awareness of health care is just as important financial expertise in the banking sector or educational expertise in university governance.

2. Outcomes: As healthcare organizations participate in public reporting, physicians' familiarity with outcomes data can help their fellow board members provide better oversight of what the numbers really mean and how to improve them.

3. CEO Success: Health care organizations' chief executives don't have to be physicians, but physicians can help them grapple with increasingly complicated marketplace.

4. Diversity: Physicians have been acculturated over their professional lives to skeptically evaluate things for themselves.  While this can be challenging in some settings, the good news is that this independence of thought can be counted on to reduce the risk of corporate "group-think."

5. Credibility: Physicians are still widely admired for their integrity.  This can help set the "tone at the top" as well as diminish the risk that a health care organization is putting profits before patients.

6. Professional Development: physicians' commitment to lifelong learning can act as a role model for lay board members who may be unwilling to commit to the time or the expense of continuing education.

7. Competitive Insights: Physicians are more likely to be aware of the strengths, weakness, turf and politics in their own as well the competitors' organizations.

Given the evidence, it seems that any health care organization without a doc on their board is missing out on an important value proposition that not only adds to, but transcends the bottom line. 

Just sayin'.

One last thought: when any physician ponders participation in governance, he or she will have to deal with three unique barriers: 1) loss of practice income, 2) a time commitment away from the bedside that could erode their clinical skills and 3) the loss of prestige that comes from having a less than 100% commitment to their profession.

More on that in a future post.

1 comment:

Anonymous said...

Absolutely nailed a fundamental issue here Jaan.