Healthcare Boards: The Untapped Ally

By: David Jarrard 4-minute read

Your board may be a powerful untapped resource who can help you tackle the significant reputational issues facing every healthcare provider today. And any help is welcome these days.

You know the story. Healthcare’s halo is slipping. Fresh surveys (including ours) tracking the public’s decline in trust in every institution seem to appear every month. This reputation erosion has bottom-line consequences.

Your board – that small group entrusted to advise and guide your enterprise – is unique in your organization and in the community you serve. They can be compelling allies in this work, fiercely advocating and engaging community opinion leaders in ways vested healthcare staff cannot.

Who’s going to nudge them? A version of the following appears in the November E-briefing Newsletter from The Governance Institute, which is dedicated to serving not-for-profit health system boards and leaders across the US. If your board members haven’t received their copy yet, consider sliding this one under their door.

Hospital Boards Must Deal with Increasing Negative Scrutiny

The powerful goodwill that largely shielded hospitals and health systems from rocking political waves and funding challenges over the last century is steadily eroding. The generous assumption that hospitals and health systems are operating in a manner consistent with their stated mission can no longer be taken for granted. 

In the face of an onslaught of scrutiny and criticism from private and government voices, only 51 percent of Americans now believe hospitals and health systems are meeting the needs of their community, and the majority say hospitals are more focused on making profits than treating patients, according to our firm’s research. 

A health system’s ability to command appropriate reimbursement from government and private payers, protect its market share and leverage its strength in workforce discussions is facing material challenges. Left unchecked, a health system’s ability to determine its own future and the delivery of care in its community is in question. 

As an industry, there is urgent work to do and board members have a vital and unique role to play in it. Left unchecked, a health system’s ability to determine its own future and the delivery of care in its community is in question. 

Four Hot Buttons 

Let’s look at four of the most heavily scrutinized issues today and the challenges they pose. 

Community Benefit and Tax-Exempt Status: Watch Your Language

Lawmakers, media and advocacy groups are challenging the tax-exempt status of many not-for-profit providers. These voices make the assertion that the value of a hospital’s tax breaks should equal the dollar amount of the charity it provides, using a narrow definition of charity that is less than, well, charitable to healthcare systems. 

As such, boards, leadership and marketing teams need to reframe how they view terms such as “value,” “quality” and “experience.” They also need to sharply define “charity care” itself. Those words often mean different things in the public’s mind than they do in your finance committee. The public may define “quality” as “my own experience or relationship with a provider,” “patient experience” as “how I’m treated when I press the call button or when it’s time to pay my bill” and “community benefit” as “the amount of free care provided.” 

Encourage your leadership team to start your communications, marketing messages and even community benefit reports using the language and perspective of your patients. Begin with your vocabulary. A common language is the first step to finding common ground. 

Billing and Cost of Care: Educate and Review Processes 

The high cost of care is one of the nation’s leading political issues. National media regularly seek out and expose health system bills and collection processes. The anger and pain expressed in many stories are justified when viewed from the patient’s perspective, compelling lawmakers to be more aggressive in their efforts to do something about the cost of care. 

Encourage your leadership to review your organization’s billing and collections practices—to know well and accurately how your organization (and its contractors) is handling all aspects of billing—and then, ensure those practices are aligned with your mission. If you’re not sure if your organization is suing the poor and vulnerable for a handful of dollars, find out and address it. 

Board members can be active voices in educating the public—through the media, conversations with lawmakers and in one-on-one conversations—about how the finances of healthcare work. It is vital to connect the dots between policies like 340B and how changes to reimbursement and billing affect the viability of provider organizations. The point is not to shift blame or to play the victim, but to communicate clearly about how the pieces fit together in an admittedly flawed system. 

Partnerships and Consolidation: Share the “Why” 

Consolidation is often necessary today, particularly for independent or rural hospitals at the crossroads of partnership or diminishment, if not closure. At the same time, consolidation is not a panacea, and it does at times lead to tradeoffs. 

Because these transactions can be deeply political events within the organization and the community it serves, leaders must ensure sensitive, authentic conversation, messaging and stakeholder engagement. 

Boards can help provide this nuance. As stewards of their organization, board members are in a unique position to explain why a partnership is necessary. “Yes, we need better rates to survive. Yes, we need the efficiencies and access to the administrative and supply chain of a larger system to reduce costs. And yes, our goal is to lower the cost of care. But the first priority is to maintain or expand access.” 

Transparency is vital. Don’t overstate the benefits and don’t hide the potential drawbacks. Show what you expect to happen and how you’re going to pursue that outcome while listening to community concerns. This approach brings people together to be part of the process, creating advocates, not opponents. 

Payer Issues: Seek the Sustainable 

The stakes are high in today’s contract negotiations between payers and providers. Hospitals are desperate for updated and fair terms. Without proper reimbursement, emergency departments, service lines, critical services and even facilities themselves are at risk. Meanwhile, payers are working to ensure that they fulfill their business imperatives and shareholder obligations. 

Employers, particularly large, self-funded employers, are key stakeholders on the periphery of these negotiations. After all, the care you offer is important to their employees and much of the cost of care comes from their bottom line. It’s a conversation for patients and community members, too, with a focus on the care needed for them and their families. 

While payers and health systems can find themselves in great tension, innovative organizations are exploring creative partnerships with payers, acknowledging a convergence between payers and providers in the shift toward a more value-driven future. Boards can urge leadership teams to look beyond the immediate payer entanglements to advance a different, more sustainable model. 

Conclusion 

The common denominator of those issues? Money. Specifically, what it takes to deliver care in today’s economy and the investment needed to ensure care is delivered tomorrow, too. The healthcare economy is a byzantine maze and does not function as consumers expect or want. Boards can be unique, community-minded translators and advocates because they are in a unique position as healthcare leaders. They will hear questions that won’t be asked of executive leadership teams and can say things hospital leaders will not hear and cannot say. 

It’s rarely been more universally important for boards to use their position as stewards of hospitals—with all the context and relationships that come with it—to proactively advocate for these vital organizations where care is delivered. 

Activating the Board

• Be an active voice. Know your audience. Be ready with a consistent message that is tailored to the person or group receiving it.
• Boldly lead conversations about the future of care. Healthcare leaders are carrying so much weight as they fight to advance access and continue serving their communities. The board’s voice is needed in support of this work.
• Don’t fall into the victim trap. People have their own financial challenges—often including medical bills. Educate the executive but do it from a patient/consumer-centric perspective, focusing on their concerns and not those of the hospital.
• Recognize the emotion. These conversations about money and health are deeply personal for people. Engage people with the knowledge that the finances of their healthcare, their access to a physician they trust, matter deeply.
• Start early. In fact, start before you need to. Engage with media, lawmakers, community leaders, patients and payers to talk about the challenges facing the community—again, as a team player in partnership with the executive team. Build trust and collaborate so that when things get tense, you already know the people you’re talking to.
• Use the media wisely. Remember that newsrooms, like operating rooms, are running on a staffing shortage. Give reporters pared-down messages that use clear yet compelling language. Appeal to emotions. Remember that talking to the media is talking to the public.
• Partner with your leadership. In all the above, work closely with your health system’s leadership team, working in harmony with them to advance the organization’s goal. Being active and bold is not a call for board members to take matters into their own hands—which can lead to negative unintended consequences. Instead, partner with the executive team to develop a clear, consistent message and plan for getting it out to relevant stakeholders.

Contributors: David Shifrin, David Jarrard, Emme Nelson Baxter Image Credit: Shannon Threadgill

This piece originally appeared in the November 2023 E-Briefings from The Governance Institute and is republished with permission. Read the original and learn more about the Governance Institute here.