KHA's Trustee Resource October 2018

Back to Basics: The Board's Role in Strategic Planning One of the board's most important leadership responsibilities is setting a clear vision for the future and planning a strategy for getting there. But strategic planning is no longer as straightforward as it might once have seemed. Today's world poses multiple unanswered questions that can be confounding for trustees trying to steer a clear path forward. What's the future for the ? Will a single-payer system gain momentum? What scientific breakthroughs will be announced? What implications will technological advances have? Who or what might be the next innovative and unexpected competitor?

Despite the unknowns, trustees cannot stand back waiting to see what developments will unfold in the marketplace. The board is accountable for shouldering a strong, focused and forward-thinking leadership role. Trustees must be able to think creatively and work with executive management to develop new directions for success in an increasingly challenging market.

Who, What, How and Why Before beginning the strategic planning process, trustees should have a clear understanding of their role and responsibilities in the process, and how those differ from management's role. First and foremost, the board's role is to set the mission for the organization and a vision for its future.

Once the mission and vision are determined, the board is responsible for identifying the goals or outcomes it wants the organization to reach and the strategies they believe will achieve those goals. The executive team's job is to develop the action plans for delivering on those expectations. In simple terms, the board's strategic planning responsibility is to determine what is going to be done. The executive team's responsibility is to determine how the board's vision and strategies will be accomplished.

The mission should drive the entire strategic process. It should answer the basic organizational question, "why are we here?" If it doesn't, the first step in the strategic process should be to revisit the mission.

Five Steps in Building a Sound Strategic Plan While strategic planning processes may differ from one organization to the next, most are based on the following five key steps:

1. Creating a Strong Foundation. Like three legs of a stool, the foundation of the strategic plan should be based on the organization's mission, values and vision. The continued strength and worth of these three to the organization can be determined by evaluating the following questions: • Is the mission still a meaningful and memorable description of the core purpose of the hospital or health system? • Are the values underlying the mission still relevant? • Is the vision still a compelling and challenging but realistic stretch? The success and viability of the organization is dependent on the board's ability to define a mission that resonates with employees, medical staff, patients and the community at large. Setting a compelling vision of the future and a clear strategic plan for its achievement has the power to inspire and align the organization's various constituencies. 2. Understanding the Environment. Just as high-quality health care decisions should be evidence-based, the board's strategic planning must also be evidence-based. Trustees must have credible information and data about the community and the broader health care environment. They must also understand the functional areas and operational performance most critical to the organization's success. 3. Leveraging Insights and Recognizing Opportunities. Trustees cannot afford to take data and information at face value. They must develop a working expertise about the issues driving health care, examining the bigger picture for better strategic perspective. Trustees must do their strategic best to discern emerging trends and identify what opportunities they might create for the organization. 4. Setting the Course. Once trustees have a sound understanding of the forces at work in the environment, they can analyze current strategies for any needed change and develop new strategies to capitalize on the most significant opportunities for the hospital or health system as it moves forward. 5. Prioritizing the Final Few. Finally, the board must prioritize a limited number of goals and strategies to pursue. Keeping goals and strategies to a critical few helps to ensure there is adequate staff, resources and organizational focus to succeed. Because health care is complex with multiple and completing priorities, it may be difficult to limit the number of goals and strategies. Goals and strategies that "pass the test" should closely align with the mission and advance the organization toward its vision; positively impact community health; have a high chance of success; be urgent to complete; and strengthen the organization's competitive position.

What Will It Take? The board, working closely with the executive team, must ensure the organization has the resources and staff to ensure the plan’s success. The board should consider questions such as:

• Does the organization have the financial resources to carry out its plans? • Does the organization have staff in the right roles with the right knowledge, experience and skill sets? • Would the plan stretch resources and staff too thinly to be successful? • Would pursuing new strategies compromise performance in other areas? • Does the board itself have one or more trustees with the subject knowledge and expertise to ask critical questions and help guide oversight of specific strategies?

Once the work outlined in the steps above has been accomplished and the board is satisfied with its vision and strategic direction for the organization, work on the plan should be handed off to the executive team. The team executive is then responsible for developing and implementing an action plan that will support the plan's strategies and achieve its goals.

Everyone Pulling in the Same Direction For a strategic plan to be successful, every employee, physician and volunteer must see their connection to the plan and realize their value in achieving the organization's strategic initiatives. This connection begins with the board. Understanding the environment (step 2 in the planning process) includes an understanding of the organization's functions and performance. The best sources for that understanding are the organization's stakeholders – its medical and nursing staffs, employees, volunteers, patients and others.

For example, best practices suggest the medical staff be directly included in the planning process through inclusion of one or more physicians on the strategic planning committee. The same is true of the nursing staff. Focus or advisory groups, surveys and interviews might be used to gain feedback from a broader number of stakeholder groups and individuals. In follow- up to the feedback, the board must ensure a strong communication plan is in place to share how concerns were heard and taken into account.

Ensuring Plan Success The board's responsibility for the strategic plan doesn't end when the executive team begins developing and implementing the action plan. The board should be involved in helping to define targets and measure progress, including regularly reviewing a dashboard of the plan's key performance indicators and making course corrections as needed.

If progress fails to meet expectations and objectives, trustees must ask difficult questions to get to the root of the issues and hold the executive team accountable for performance. The executive team should be prepared to recommend actions that will put the organization back on track for success.

In a world that is constantly changing and advancing, new information, data and ideas should be part of strategic discussions at every board meeting. Board members must be prepared to turn new information into strategic action to prevent strategic plans from being derailed and to take advantage of new and unexpected opportunities.

Strategic Plan Definitions Mission: The organization's fundamental core purpose, its unique reason for existence. A short but powerful statement that provides a clear context for everything the hospital or health system does.

Vision: A projection of the organization's future position. The vision creates a focus that drives organizational thinking and is supported by the organization's strategies, objectives and action plans.

Goal: A long term (typically five years or more) position that the organization seeks to achieve.

Strategy: A specific, focused initiative for achieving a goal or goals.

Objective: A specific and measurable projected accomplishment that supports a strategy.

Action Plan: Specific tactics used to achieve an objective.

Special thanks to The Walker Company for use of: Back to Basics: The Board's Role in Strategic Planning. Additional trustee resources from KHA are available in the Trustee Section of the KHA Web site. Additional resources from Larry Walker can be found at: www.walkercompany.com.

Doing Board Self-Assessments That Actually Matter Most hospital boards are already in the habit of conducting annual board self-assessments – however, the results of those assessments are rarely leveraged towards improvement. The American Hospital Association Trustee Services teamed up with Dottie Schindlinger, the Vice President/Governance Technology Evangelist at Diligent, to create a comprehensive guide on the best practices of board self-assessment. In this white paper, learn what it takes to create and facilitate effective self-assessments, including:

• Se�ng annual board goals • Conduc�ng peer-evalua�ons for trustees • Providing trustee development opportuni�es

The Hospital Association is pleased to share this resource from AHA Trustee Services and BoardEffect. View the white paper and a helpful trustee self-evaluation sample! For more on BoardEffect, go to: https://www.boardeffect.com/.

Save the Date for the Critical Issues Summit for Hospital Boards – March 7-8

The Kansas Hospital Association encourages hospital executive staff and their board members to participate in the 2019 Critical Issues Summit, March 7-8 in Wichita. We will be in a new location this year … join us at the Drury Plaza Hotel Broadview, Wichita. Watch for more information after Jan. 1.

We Care We Vote; Make Your Voice Heard This is the time of year when our main thought about the quickly approaching election is to just want it to be over, so we can stop being fed a constant diet of negative political ads. Yes, it seems the ads are mostly negative, and often even insulting to the average voter. But I would argue this is actually the most important time to remind ourselves what a privilege it is to be able to cast a vote and just how important that vote is.

So, permit me to mention one more time KHA's We CARE We VOTE campaign-- a statewide initiative to empower and educate health care workers across the state about what's at stake for Kansas hospitals this election year.

This year, as part of that campaign, we asked the three candidates for Kansas Governor, , and Greg Orman, a series of questions about healthcare issues. Here are those questions:

1. What is your perspective on the current Kansas health care system? How does the local community hospital fit into that system? 2. Once elected, what are the top two or three health care policies that you would like to see implemented? 3. KanCare, which is the state's Medicaid program, has been around since 2013 and utilizes a Medicaid managed care model. It has been well publicized that health care providers have faced periodic challenges with the system. What changes do you plan to make with the KanCare program that will make it easier for Kansas health care providers to serve the KanCare population? 4. At present, 33 states have adopted Medicaid expansion. Three additional states are taking the issue to a public vote later this year. Once elected, would you support KanCare expansion? o If yes, what provisions would you require to be included in the legislation? o If no, is there something else you would propose as an alternative? 5. The State of Kansas has more than 125 community hospitals. Throughout Kansas and the country, hospitals are facing financial challenges that place in jeopardy their ability to serve their local community. Once elected, what would you do to support hospitals in Kansas?

Here is a summary of the candidates' responses to our questions:

We encourage hospitals to elevate their advocacy efforts leading up to the Nov. 6 general election. We are calling on hospital employees, physicians, trustees, vendors and volunteers to join together to make the voice of the industry heard.

Together, Kansas hospital employees are more than 86,000 people strong, and many interact with the public every single day. These employees, in addition to hospital board members, are in a powerful position to make a difference—both with their votes and with their voices as advocates for better health.

Exemplary Trustees Recognized at KHA Convention One of our signature events during September at the Kansas Hospital Association Annual Convention is the KHA Awards Luncheon. We take this opportunity to recognize so many individuals who make a difference.

It was an honor during this luncheon to recognize hospital trustees who provide an exemplary contribution through their leadership and governance. Hospitals across the state nominated individuals for the Trustee of the Year Award because they routinely went above and beyond the call of duty. Thirteen trustees from across Kansas were chosen as 2018 Trustees of the Year:

• Greg Bentz, Saint Luke's South Hospital, Overland Park • Lanny Bosse, Wamego Health Center, Wamego • Ed Gard, Susan B. Allen Memorial Hospital, El Dorado • Jim Heinicke, Newton Medical Center, Newton • Keith Hughes, Hutchinson Regional Medical Center, Hutchinson • Judy Reese, Coffey County Hospital, Burlington • John Rubow, Neosho Memorial Regional Medical Center, Chanute • SueAnn Schultz, Stormont Vail Health, Topeka • Greg Schwerdt, The University of Kansas Health System St. Francis Campus, Topeka • Donald Seery, Via Christi Hospital, Wichita • Perry Sorrell, Labette Health, Parsons • Bob Standage, Citizens Medical Center, Colby • Sister Roserita Weber, St. Catherine Hospital, Garden City

Congratulations to all our 2018 awardees. Thank you for making a difference.

KHA-PAC Campaign 2018 – Trustee Contributions Are Essential The Kansas Hospital Association Political Action Committee 2018 campaign is in full swing. This year, the KHA-PAC Steering Committee would like to get support from every hospital. Participation in the KHA-PAC is an important part of our advocacy program. We are pleased to report we have raised $65,000 toward this year's goal of $71,000. Contributions from hospital trustees are essential to make sure our voices are heard. Contributing to the KHA-PAC has never been easier.

If you need additional information or solicitation supplies, please contact Cindy Samuelson at (785) 233-7436. Thank you for your support.

Mercy Hospital Fort Scott Closure Our hearts are with our friends in Fort Scott who made the incredibly difficult decision to close Mercy Hospital Fort Scott by the end of the year. Anyone who has paid attention to this situation knows of the anguish involved.

Mercy Hospital has served Fort Scott since 1886 when Sister Mary Teresa Dolan and Sister Mary Dolores Drew began managing a small, 10-bed hospital in the community. The sisters first arrived in Fort Scott on their way to Los Angeles to begin a foundation and to aid their health by seeking a warmer climate than their home in Michigan. They were impressed with the community's hospitality and its need for a hospital. As a result, the sisters decided they had found what they were looking for in southeast Kansas.

Like many hospitals, Mercy Fort Scott grew over the years, adding new lines of service and opening a new hospital building in 2002. But, also like many hospitals, Mercy more recently saw declining patient numbers and shrinking reimbursement, causing leadership to explore options for future sustainability. Several years ago, the hospital began an 18-month discernment process—a process that recognized the potential that Mercy might one day have to make this difficult decision.

The decision to close was made following months of exploring options for keeping hospital services in the community, and it comes with a plan for continuing physician services in the area, as well as supporting hospital co-workers through the closure process.

Any time a hospital closes, it represents a devastating blow to the community, from the patients to providers to businesses to family members of all these. It is a blow not only to the community's access to care, but also to its economic infrastructure. That is what Mercy Hospital and the Fort Scott community are feeling right now. Those concerns are, and will remain, foremost in our minds.

While closure of community hospitals is becoming an all too common occurrence, each instance carries its own particular set of circumstances. The precise reasons for these closures may vary from hospital to hospital, so it is impossible to say one specific change in policy is a panacea for these heart wrenching situations. Ending sequestration may help one community most, while enacting KanCare expansion would help another more. What we can say for certain is our state and federal lawmakers have an obligation to consider policies that will boost, and not limit, access to care in a given community. And we have every right to ask this question of those same lawmakers: Are you doing everything you can to support access to health care in Kansas?

Mental Health Task Force Update Through legislation that became effective July 1, the Kansas Hospital Association became a member of the statewide Mental Health Task Force, which is under the auspices of the Kansas Department for Aging and Disability Services. The group is facilitated by the Kansas Health Institute and meets twice per month. Many issues have been discussed related to system transformation and maximizing federal funding for mental health and Substance Use Disorder treatment. The following recommendations have been identified:

• Develop regional crisis centers; • Provide comprehensive housing to decrease state hospital admissions, incarcerations and prevent homelessness; • Restore and enhance KDADS staff positions related to housing programs; • Implement Medicaid expansion by July 1, 2019, to serve uninsured and underinsured and increase access to behavioral health services; • Create health homes using case management to coordinate care; • Provide access to prevention and crisis care for children, youth and families in settings such as schools, homes and primary care offices;

• Support expansion of the federal Excellence in Mental Health Act and develop an application to participate in a pilot program; • Improve access to care statewide; • Review costs and reimbursement rates for behavioral health services including Substance Use Disorder treatment and update reimbursement rates accordingly; and • Implement Medicaid suspension, not disenrollment for those incarcerated or hospitalized in a state hospital.

The Mental Health Task Force will issue a full report in late December or January.

KHA/KMS Joint Committee on Opioid Use Report Over the past seven months, hospital leaders and physicians on the Kansas Hospital Association/Kansas Medical Society Joint Committee on Opioid Use have been working collaboratively to address the opioid challenge within Kansas. The committee, co-chaired by Reta Baker, CEO, Mercy Hospital Fort Scott; and Dr. LaDona Schmidt, Lawrence Memorial Hospital, Lawrence, included more than 18 Kansas physicians and hospital leaders who assessed the extent of opioid misuse in Kansas and developed recommendations to address pain management, improve opioid prescribing safety, increase utilization of KTRACS, and expand access to medication assisted treatment.

KHA and KMS will continue to collaborate with each other, as well as other stakeholders, to put the committee's recommendations into action. Additionally, KHA and KMS will coordinate to share the document with other stakeholders and policymakers. We are grateful to the members of the Joint Committee on Opioid Use for their participation. The committee will continue their work at their next meeting in October.

AHA Announces 340B Good Stewardship Principles The American Hospital Association recently announced its new principles for ensuring good stewardship of the 340B Drug Pricing Program. This new AHA-led initiative will strengthen the 340B Program by increasing transparency while helping 340B hospitals better communicate the value of the program for vulnerable patients and communities. In Kansas, 80 community hospitals are currently participating in the 340B Drug Pricing Program. As part of the AHA good stewardship program, the following three principles will serve as the foundation.

• Communicate the Value of the 340B Program: The hospital commits to preparing and publishing a narrative, on an annual basis, that describes how it uses 340B savings to benefit the community. • Disclose Hospital's 340B Estimated Savings: The hospital commits to publicly disclosing, on an annual basis, its 340B estimated savings calculated using a standardized method. • Continue Rigorous Internal Oversight. The hospital commits to continuing to conduct internal reviews to ensure the hospital's 340B Program meets HRSA program rules and guidance.

To find out more about this initiative and to sign the pledge form, hospital executives are encouraged to visit https://www.aha.org/340b. Kansas Hospital Association staff will be working closely with member hospitals to provide guidance and assistance on this initiative and to incorporate this program into our current advocacy initiatives on the 340B Program.