Governing for Quality in a "No-Outcome, No-Income" World

Original content published in November/December 2010 Trustee magazine, Vol. 63, No. 10. © 2010 by Health Forum Inc., all rights reserved. Permission granted for digital use only.

By David Nash and Mary Totten

There’s hardly a health care board member, past or present, who hasn’t heard of the age-old governance mantra “no margin, no mission.” For years this simple phrase captured what most trustees came to believe was their primary obligation: to ensure the financial viability of their hospital or health system. Days cash on hand, debt coverage ratio and net operating margin were key measures that defined high or low performance.

The board finance committee was where the action was; and when it came time to recruit new trustees, the board typically would look for a banker or businessman to fill the opening. Today, however, oversight for quality and safety takes its place beside—or some would argue ahead of— financial viability as top priority for health care governing boards. Evidence of alarming quality and safety performance has been in the public spotlight for more than a decade. Yet, despite notable efforts by some hospitals and systems to set big aims for quality and safety improvement and make great strides toward achieving them, medical errors remain the fourth leading cause of death in America. As a nation we have not yet been able to do enough to move that “big dot” in the right direction. The quality and safety imperative for boards cannot be clearer.

And, a growing number of studies are reinforcing the board-quality improvement connection. Research tells us that when boards are engaged in quality and safety issues, their hospitals are more likely to have quality improvement programs, lower mortality rates and better performance on other quality-related outcomes. However, despite these compelling findings and a variety of national and local efforts to get boards on board, the big dot of board engagement has been tough to pin down, let alone move in the right direction.

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