Successful Governing Boards Make Sure That They Succeed
Successful leaders do not start by asking,
"What do I want to do?"
They ask,
"What needs to be done?"
Then they ask, "Of those things that would make a difference, which are right for me?"
They don't tackle things they aren't good at. They make sure other necessities get done, but not by them. Successful leaders make sure that they succeed! They are not afraid of strength in others.
Next post: Check Your Performance - Thoughts on Community Health Center Governing Boards and Executive Directors
Saturday, March 7, 2009
Friday, March 6, 2009
Thoughts on Community Health Center Boards and Executive Directors
Thoughts on Community Health Center Boards and Executive Directors
Traits of Successful Governing Boards:
Successful Governing Boards:
Make sure that they succeed
Check their performance
Are mission driven
Practice creative abandonment
Are not prisoners of their organization
Know how community health centers fail
Successfully navigate the transition from manager to executive director
Know how capable leaders blow it
Are aware of the danger of charisma
Reinvigorate people
Practice character development
Next post: Thoughts on community health center Governing Boards and Executive Directors - Successful leaders make sure that they succeed!
Traits of Successful Governing Boards:
Successful Governing Boards:
Make sure that they succeed
Check their performance
Are mission driven
Practice creative abandonment
Are not prisoners of their organization
Know how community health centers fail
Successfully navigate the transition from manager to executive director
Know how capable leaders blow it
Are aware of the danger of charisma
Reinvigorate people
Practice character development
Next post: Thoughts on community health center Governing Boards and Executive Directors - Successful leaders make sure that they succeed!
Thursday, March 5, 2009
Community Health Centers –Governing Boards That Do Their Job – Part 2 -
Community Health Centers –Governing Boards That Do Their Job – Part 2 -
Strengthening Community Health Center Governing Boards
In our prior post we discussed:
We have a right to expect more from governing boards of community health centers. The system of checks and balances between governing boards and executive teams has, in too many cases, disintegrated. We are seeing that many governing board members are demonstrably unqualified, abjectly remiss, or simply too cozy with their executive directors.
Clearly, we must strengthen these governing boards.
Some measures must include:
Splitting the role of chairman and executive director;
Eliminating "staggered" boards, which allow for only a minority of members to be elected in any one year; and
Giving stakeholders the right to propose board members and resolutions.
Nonexecutive Governing Board Members
Nonexecutive community health center governing board members are in a legal fiduciary relationship to stakeholders and patients.
Community Health Center governing boards have a fiduciary responsibility to oversee management. The governing board chairman is the stakeholder’s main, and, ofttimes sole, visible, representative.
Chairman and Executive Director – Too Close?
How can the chairman oversee the Executive Director, if they are so close personally and so dependent upon each other, that, in effect, their job is one and the same? Splitting the Chairman’s roles into an Operational Chairman and a Finance Chairman would eliminate this inherent conflict.
Similarly, how can stakeholders exercise greater power if senior management is allowed to prevent them from being nominated to company boards? The provisions such as staggered boards, which are meant to prevent a full governing board takeover in any one year is an example.
Often, the very well-compensated and over-perked (despite their protestations to the contrary) -- executive management and governing boards got themselves into this mess. The US Department of Health and Human Services - Bureau of Primary Health Care needs to respond by making lasting changes to make them more accountable to stakeholders, which includes, not only patients and the unserved, but also everyone in this country. http://bphc.hrsa.gov
Corporate Law
Corporate law is largely the province of states, which to varying degrees protect flawed governance models. What is needed is an active Bureau of Primary Health Care (BPHC) that gives stakeholders the right to vote by simple majority to move their community health center’s legal incorporation to states that uphold greater stakeholder rights.
A state recognized as having the most shareholder-friendly corporate laws in the nation, should be selected. By incorporating in that state, and adopting its provisions, a public company would in one easy step improve rights for its shareholders, and eliminate the often too-cozy relations between senior management and the governing board. http://economix.blogs.nytimes.com/author/uwe-e-reinhardt/
Demand Answers
It's fair to ask whether the governing boards demanded answers from their current Executive Directors, about the risks they have taken, and the patients they have not served. Alarm bells should have gone off with the BPHC and the CHC governing boards long ago.
It is high time for taxpayers, stakeholders, and the Bureau of Primary Health Care to demand and receive more accountability from the community health center governing boards and senior management.
Next post: Community Health Centers – More on Governing Boards.
Strengthening Community Health Center Governing Boards
In our prior post we discussed:
We have a right to expect more from governing boards of community health centers. The system of checks and balances between governing boards and executive teams has, in too many cases, disintegrated. We are seeing that many governing board members are demonstrably unqualified, abjectly remiss, or simply too cozy with their executive directors.
Clearly, we must strengthen these governing boards.
Some measures must include:
Splitting the role of chairman and executive director;
Eliminating "staggered" boards, which allow for only a minority of members to be elected in any one year; and
Giving stakeholders the right to propose board members and resolutions.
Nonexecutive Governing Board Members
Nonexecutive community health center governing board members are in a legal fiduciary relationship to stakeholders and patients.
Community Health Center governing boards have a fiduciary responsibility to oversee management. The governing board chairman is the stakeholder’s main, and, ofttimes sole, visible, representative.
Chairman and Executive Director – Too Close?
How can the chairman oversee the Executive Director, if they are so close personally and so dependent upon each other, that, in effect, their job is one and the same? Splitting the Chairman’s roles into an Operational Chairman and a Finance Chairman would eliminate this inherent conflict.
Similarly, how can stakeholders exercise greater power if senior management is allowed to prevent them from being nominated to company boards? The provisions such as staggered boards, which are meant to prevent a full governing board takeover in any one year is an example.
Often, the very well-compensated and over-perked (despite their protestations to the contrary) -- executive management and governing boards got themselves into this mess. The US Department of Health and Human Services - Bureau of Primary Health Care needs to respond by making lasting changes to make them more accountable to stakeholders, which includes, not only patients and the unserved, but also everyone in this country. http://bphc.hrsa.gov
Corporate Law
Corporate law is largely the province of states, which to varying degrees protect flawed governance models. What is needed is an active Bureau of Primary Health Care (BPHC) that gives stakeholders the right to vote by simple majority to move their community health center’s legal incorporation to states that uphold greater stakeholder rights.
A state recognized as having the most shareholder-friendly corporate laws in the nation, should be selected. By incorporating in that state, and adopting its provisions, a public company would in one easy step improve rights for its shareholders, and eliminate the often too-cozy relations between senior management and the governing board. http://economix.blogs.nytimes.com/author/uwe-e-reinhardt/
Demand Answers
It's fair to ask whether the governing boards demanded answers from their current Executive Directors, about the risks they have taken, and the patients they have not served. Alarm bells should have gone off with the BPHC and the CHC governing boards long ago.
It is high time for taxpayers, stakeholders, and the Bureau of Primary Health Care to demand and receive more accountability from the community health center governing boards and senior management.
Next post: Community Health Centers – More on Governing Boards.
Wednesday, March 4, 2009
Community Health Centers –Governing Boards That Do Their Job – Part 1.
Community Health Centers –Governing Boards That Do Their Job – Part 1.
This next series of posts will address Community Health Centers –Governing Boards –
The entirely preventable failure of Community Health Center Governing Boards to guide their centers and executive directors to fulfill the dictate to serve the underserved that has unfolded has many culprits:
§ Reckless executive directors who gambled with their center’s futures,
§ Unmotivated federal regulators, and
§ Financially clueless governing boards.
But while senior managers and government regulators have justifiably taken heat for this multifaceted debacle, governing board members have largely been let off the hook. Why?
It is a community health center’s governing board's responsibility to oversee management and to ensure the center’s long-term survival. Its job, in short, is to represent the stakeholders, i.e., the patients, and the unserved low-income members of the community.
With the tumbling and collapse of dozens of medical groups and the underfunding of Medicaid, can we draw any conclusion other than that those governing directors utterly failed in this regard?
Increasingly, we hear apologists rise to the defense of governing boards, evidence that the process of obfuscation of the boards' guilt has begun. This is dangerous.
Nonexecutive governing board directors could not have been expected to understand the risks of complex, highly leveraged accounts receivable accounting during this crisis, the apologists have stated. That is nonsense.
A governing board member should be able to understand when a community health center is stating its accounts receivables that are over 180 days old as revenue, as some do. In my view, many community health center governing boards are not doing their jobs.
Apologists believe that some governing board members should have pressed senior management more on their accounting strategies. Chances are that some directors did take this approach. But did they demand any senior management behavioral change of course? Or did they just accept the management line that certain accounting strategies are necessary?
We have a right to expect more from governing boards of community health centers. The system of checks and balances between governing boards and executive teams has, in too many cases, disintegrated. We are seeing that many governing board members are demonstrably unqualified, abjectly remiss, or simply too cozy with their executive directors.
Next post: Community Health Centers –Governing Boards That Do Their Job – Part 2 - Strengthening Community Health Center Governing Boards.
This next series of posts will address Community Health Centers –Governing Boards –
The entirely preventable failure of Community Health Center Governing Boards to guide their centers and executive directors to fulfill the dictate to serve the underserved that has unfolded has many culprits:
§ Reckless executive directors who gambled with their center’s futures,
§ Unmotivated federal regulators, and
§ Financially clueless governing boards.
But while senior managers and government regulators have justifiably taken heat for this multifaceted debacle, governing board members have largely been let off the hook. Why?
It is a community health center’s governing board's responsibility to oversee management and to ensure the center’s long-term survival. Its job, in short, is to represent the stakeholders, i.e., the patients, and the unserved low-income members of the community.
With the tumbling and collapse of dozens of medical groups and the underfunding of Medicaid, can we draw any conclusion other than that those governing directors utterly failed in this regard?
Increasingly, we hear apologists rise to the defense of governing boards, evidence that the process of obfuscation of the boards' guilt has begun. This is dangerous.
Nonexecutive governing board directors could not have been expected to understand the risks of complex, highly leveraged accounts receivable accounting during this crisis, the apologists have stated. That is nonsense.
A governing board member should be able to understand when a community health center is stating its accounts receivables that are over 180 days old as revenue, as some do. In my view, many community health center governing boards are not doing their jobs.
Apologists believe that some governing board members should have pressed senior management more on their accounting strategies. Chances are that some directors did take this approach. But did they demand any senior management behavioral change of course? Or did they just accept the management line that certain accounting strategies are necessary?
We have a right to expect more from governing boards of community health centers. The system of checks and balances between governing boards and executive teams has, in too many cases, disintegrated. We are seeing that many governing board members are demonstrably unqualified, abjectly remiss, or simply too cozy with their executive directors.
Next post: Community Health Centers –Governing Boards That Do Their Job – Part 2 - Strengthening Community Health Center Governing Boards.
Tuesday, March 3, 2009
The Unlearned Lessons of Failing Community Health Centers – Part 4 -
The Unlearned Lessons of Failing Community Health Centers – Part 4 -
The failure of executive directors to believe, despite their mission, and demonstrate through measurable behaviors, that Community Health Centers are established to serve all the medically underserved in its area -
As we continue to address Community Health Centers’ central role in providing primary health care to the unemployed, underemployed, and part-time employed who are uninsured or underinsured.
The way this can be dealt with immediately is through local Community Health Centers that are well-led, well-managed, and well-financed.
If Community Health Centers (CHCs) are vital to resolving the health crisis, what can Community Health Center Board members do to help their Center?
Our sense is that Boards can insist that their Executive Director immediately overcome the following four issues:
1. The lack of transparency.
2. The evolution of community health center financial statements into a dark art.
3. Financial statements as fairytales.
4. The failure of the executive director to believe, despite their mission, and demonstrate through measurable behaviors, that CHCs are established to serve all the medically underserved in its area.
Yesterday we discussed: 3. Financial Statements as Fairytales – Financial Statements that have a somewhat flexible relationship with reality.
Today we address:
4. The failure of executive directors to believe, despite their mission, and demonstrate through measureable behaviors, that CHCs are established to serve all the medically underserved in its area -
Examples:
§ If the Community Health Centers’ Board and Executive Director’s lack behaviorally-demonstrated knowledge of the number of uninsured, underinsured, 100%, 200%, and 300% of poverty level people in your area.
§ If there is a lack of comparative monthly reporting of progress toward the goal of expanding to 100% service in that Centers’ service area. http://bphc.hrsa.gov/policy/pin9823/
§ If your Board members demonstrate a tendency to focus on areas other than increasing patient base and growing visits per day.
§ If you have an Executive Director who has failed to present an effective business model for serving as many of the medically underserved as possible.
§ If your CHC has failed to secure the funds, through direct Medicaid, etc. billing and timely reimbursement, to serve the medically underserved today and tomorrow.
§ If the real growth for the Center consists almost solely of new providers or new lines of business.
§ If the CHC’s new providers and lines of business grow, but established providers have not increased their patient base and visits per day.
Questions to ask
§ Have your established providers increased their patient base and visits per day?
§ Have the CHCs patient encounters per day and per provider increased this year? This quarter?
§ Have the patient-service reimbursements increased?
§ Is the CHC still reliant on periodic grants, or, worse yet, loans?
If any of these issues make you uneasy or defensive, then, as a Board member or Senior Manager, your fiduciary responsibilities need to be exercised toward expanding direct care medical services to the medically underserved in your area.
Next post: Community Health Centers –Governing Boards That Do Their Job
The failure of executive directors to believe, despite their mission, and demonstrate through measurable behaviors, that Community Health Centers are established to serve all the medically underserved in its area -
As we continue to address Community Health Centers’ central role in providing primary health care to the unemployed, underemployed, and part-time employed who are uninsured or underinsured.
The way this can be dealt with immediately is through local Community Health Centers that are well-led, well-managed, and well-financed.
If Community Health Centers (CHCs) are vital to resolving the health crisis, what can Community Health Center Board members do to help their Center?
Our sense is that Boards can insist that their Executive Director immediately overcome the following four issues:
1. The lack of transparency.
2. The evolution of community health center financial statements into a dark art.
3. Financial statements as fairytales.
4. The failure of the executive director to believe, despite their mission, and demonstrate through measurable behaviors, that CHCs are established to serve all the medically underserved in its area.
Yesterday we discussed: 3. Financial Statements as Fairytales – Financial Statements that have a somewhat flexible relationship with reality.
Today we address:
4. The failure of executive directors to believe, despite their mission, and demonstrate through measureable behaviors, that CHCs are established to serve all the medically underserved in its area -
Examples:
§ If the Community Health Centers’ Board and Executive Director’s lack behaviorally-demonstrated knowledge of the number of uninsured, underinsured, 100%, 200%, and 300% of poverty level people in your area.
§ If there is a lack of comparative monthly reporting of progress toward the goal of expanding to 100% service in that Centers’ service area. http://bphc.hrsa.gov/policy/pin9823/
§ If your Board members demonstrate a tendency to focus on areas other than increasing patient base and growing visits per day.
§ If you have an Executive Director who has failed to present an effective business model for serving as many of the medically underserved as possible.
§ If your CHC has failed to secure the funds, through direct Medicaid, etc. billing and timely reimbursement, to serve the medically underserved today and tomorrow.
§ If the real growth for the Center consists almost solely of new providers or new lines of business.
§ If the CHC’s new providers and lines of business grow, but established providers have not increased their patient base and visits per day.
Questions to ask
§ Have your established providers increased their patient base and visits per day?
§ Have the CHCs patient encounters per day and per provider increased this year? This quarter?
§ Have the patient-service reimbursements increased?
§ Is the CHC still reliant on periodic grants, or, worse yet, loans?
If any of these issues make you uneasy or defensive, then, as a Board member or Senior Manager, your fiduciary responsibilities need to be exercised toward expanding direct care medical services to the medically underserved in your area.
Next post: Community Health Centers –Governing Boards That Do Their Job
Monday, March 2, 2009
The Unlearned Lessons of Failing Community Health Centers –
The Unlearned Lessons of Failing Community Health Centers –
Part 3: Financial Statements as Fairytales – Financial Statements that have a somewhat flexible relationship with reality -
Community Health Centers’ central role in providing primary health care to the unemployed, underemployed, and part-time employed (who are uninsured or underinsured) is seriously underutilized.
The way this can be dealt with immediately is through local Community Health Centers that are well-led, well-managed, and well-financed.
If Community Health Centers are vital to resolving the health crisis, what can Community Health Center Board members do to help their Center?
Our sense is that Boards can insist that their Executive Director immediately overcome the following four issues:
1. The lack of transparency.
2. The evolution of community health center financial statements into a dark art.
3. Financial statements as fairytales.
4. The failure of the executive director to believe, despite their mission, and demonstrate through measurable behaviors, that CHCs are established to serve all the medically underserved in its area.
In a prior post we discussed: 2. The Evolution of CHC Financial Statements into a Dark Art.
Today we address:
3. Financial Statements as Fairytales – Financial Statements that have a somewhat flexible relationship with reality -
Examples:
Holding account receivables aging on the Revenue side of the Balance Sheet past ca. 90 days (not marked to collection reality, but marked to myth).
Account receivables not being reported at their true worth (monetary value).
Failure to consistently question costs, billings, collections.
Executive Directors repeatedly signing-of on financial statements to the Board that have a somewhat flexible relationship with reality.
Questions to ask
Do the Board and ED understand that accounting is supposed to allow them to see clearly what their CHC is worth financially?
Do the financial statements make the CHCs finances more transparent?
Do the financial statements make the CHCs finances cloudier?
Is the CHCs Accounts Receivable aging marked to collection-reality or marked to myth? (How much can actually be collected from A/R that is over 90-180 days uncollected?)
· Can a quorum of the Community Health Center Board, the Executive Director, and the CFO, clearly and in outline form, explain these issues:
o Key financial terms: assets, liabilities, capital, depreciation, current ratio?
o The CHC in terms of dollars and cents decision options?
o Basic accounting principles?
o How the balance sheet can be used to examine assets and liabilities?How an income statement is used to assess revenues and expenses?
o Cash Flow statements sources and uses of funds?
o Cash flow statements: where cash comes from and how it is applied?
o If not, can any of them respond to how they comply with the PIN 98-23 requirement of Governing Board function and responsibilities requirement (III - Governance):
3. Governing Board Functions and Responsibilities.
The governing board of a health center provides leadership
and guidance in support of the health center’s mission. The
board is legally responsible for ensuring that the health center is operating in accordance with applicable federal, state and local laws and regulations and is financially viable.
b. Responsibilities
A governing board is responsible for assuring that the
health center survives in its marketplace while it pursues its
mission. This is a massive challenge in an extremely dynamic
health care environment which is placing increasing financial and service delivery pressures on all providers. Boards must be knowledgeable about marketplace trends and be willing to adapt their policies and position to reflect these trends. In addition to approving annual grant applications, plans, and budgets, boards should work with health center management and community leaders to actively engage in long-term strategic planning to
position the health center for the future.
Success is dependent on the health center’s ability to
effectively adapt to marketplace trends while remaining
financially viable…
ftp://ftp.hrsa.gov/bphc/docs/1998pins/PIN98-23.PDF
Where does your Community Health Center fit into this fiduciary continuum?
How can you be sure?
What are the measurements you use?
What are your criteria for effectiveness?
Did the answer you just gave include both the medically served and unserved people in your community?
If not, why not?
Next post: The Unlearned Lessons of Failing Community Health Centers –
Part 4 - The failure of executive directors to believe, despite their mission, and demonstrate through measurable behaviors, that CHCs are established to serve all the medically underserved in its area -
Part 3: Financial Statements as Fairytales – Financial Statements that have a somewhat flexible relationship with reality -
Community Health Centers’ central role in providing primary health care to the unemployed, underemployed, and part-time employed (who are uninsured or underinsured) is seriously underutilized.
The way this can be dealt with immediately is through local Community Health Centers that are well-led, well-managed, and well-financed.
If Community Health Centers are vital to resolving the health crisis, what can Community Health Center Board members do to help their Center?
Our sense is that Boards can insist that their Executive Director immediately overcome the following four issues:
1. The lack of transparency.
2. The evolution of community health center financial statements into a dark art.
3. Financial statements as fairytales.
4. The failure of the executive director to believe, despite their mission, and demonstrate through measurable behaviors, that CHCs are established to serve all the medically underserved in its area.
In a prior post we discussed: 2. The Evolution of CHC Financial Statements into a Dark Art.
Today we address:
3. Financial Statements as Fairytales – Financial Statements that have a somewhat flexible relationship with reality -
Examples:
Holding account receivables aging on the Revenue side of the Balance Sheet past ca. 90 days (not marked to collection reality, but marked to myth).
Account receivables not being reported at their true worth (monetary value).
Failure to consistently question costs, billings, collections.
Executive Directors repeatedly signing-of on financial statements to the Board that have a somewhat flexible relationship with reality.
Questions to ask
Do the Board and ED understand that accounting is supposed to allow them to see clearly what their CHC is worth financially?
Do the financial statements make the CHCs finances more transparent?
Do the financial statements make the CHCs finances cloudier?
Is the CHCs Accounts Receivable aging marked to collection-reality or marked to myth? (How much can actually be collected from A/R that is over 90-180 days uncollected?)
· Can a quorum of the Community Health Center Board, the Executive Director, and the CFO, clearly and in outline form, explain these issues:
o Key financial terms: assets, liabilities, capital, depreciation, current ratio?
o The CHC in terms of dollars and cents decision options?
o Basic accounting principles?
o How the balance sheet can be used to examine assets and liabilities?How an income statement is used to assess revenues and expenses?
o Cash Flow statements sources and uses of funds?
o Cash flow statements: where cash comes from and how it is applied?
o If not, can any of them respond to how they comply with the PIN 98-23 requirement of Governing Board function and responsibilities requirement (III - Governance):
3. Governing Board Functions and Responsibilities.
The governing board of a health center provides leadership
and guidance in support of the health center’s mission. The
board is legally responsible for ensuring that the health center is operating in accordance with applicable federal, state and local laws and regulations and is financially viable.
b. Responsibilities
A governing board is responsible for assuring that the
health center survives in its marketplace while it pursues its
mission. This is a massive challenge in an extremely dynamic
health care environment which is placing increasing financial and service delivery pressures on all providers. Boards must be knowledgeable about marketplace trends and be willing to adapt their policies and position to reflect these trends. In addition to approving annual grant applications, plans, and budgets, boards should work with health center management and community leaders to actively engage in long-term strategic planning to
position the health center for the future.
Success is dependent on the health center’s ability to
effectively adapt to marketplace trends while remaining
financially viable…
ftp://ftp.hrsa.gov/bphc/docs/1998pins/PIN98-23.PDF
Where does your Community Health Center fit into this fiduciary continuum?
How can you be sure?
What are the measurements you use?
What are your criteria for effectiveness?
Did the answer you just gave include both the medically served and unserved people in your community?
If not, why not?
Next post: The Unlearned Lessons of Failing Community Health Centers –
Part 4 - The failure of executive directors to believe, despite their mission, and demonstrate through measurable behaviors, that CHCs are established to serve all the medically underserved in its area -
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