What governing boards expect from physician executives - health care organizations look to physicians for advice on quality care issues

Barry S. Bader

What Governing Boards Expect from Physician Executives

Governing boards traditionally have narrowed their attention to business matters, especially finance, but the issue of quality is now rising to the top of many boards' agendas.

Corporate liability initially drew boards' attention to their ultimate accountability for the quality of care and for the appointment and reappointment of physicians to the medical staff. One of the first applications of corporate negligence to hospitals for the acts of independent physicians came in Darling v. Charleston Community Hospital[3] in 1965. A hospital was found liable after a physician covering in the emergency department improperly applied a cast to a broken leg, leading to eventual amputation. The physician had emergency department privileges, even though he lacked current clinical competence in orthopedics and the hospital had no procedure to review his treatment or to require consultation.

It was Gonzales v. Nork,[4] however, that really caught trustees' attention, because damage awards and settlements totaled millions of dollars in this and other cases alleging unnecessary and negligent laminectomies. Then, in Johnson v. Misericordia Community Hospital,[5] slipshod credentialing procedures resulted in the hospital being found partly liable for a surgeon's negligence. On his application to the medical staff, the physician had claimed nonexistent privileges at other hospitals and denied having any malpractice claims or disciplinary actions at other hospitals. Even a rudimentary credentials check would have shown his application was false. In Elam v. College Park Hospital,[6] the hospital was found liable when it took no action to limit a podiatrist's privileges, even though the quality assurance program had raised questions over the quality of his care.

More recently, the Alaska Supreme Court held that hospitals have a nondelegable duty to ensure a high standard of care in their emergency departments. The court held that, "it is the hospital that is required to ensure compliance with (quality assurance) regulations and (therefore) it is the hospital that bears final accountability for the provision of physicians for emergency room care."[7] And in California, a court held that a hospital could terminate the privileges of a cardiac surgeon when, for legitimate quality control and business reasons, it converted from an open to a closed staff.[8]

As a result of these corporate liability decisions, the rubber stamp that governing bodies once used to approve medical staff credentials is gone. In its place, boards are carefully scrutinizing recommendations for initial appointment and even reappointment. In addition, governing boards are reviewing information and raising question about the quality of care. The Joint Commission on Accreditation of Healthcare Organizations has established formal requirements for governing boards to be fully informed in order to discharge their quality of care and credentialing responsibilities. Surveyors look for evidence that the board is approving the QA plan and receiving summaries of QA activity.[9]

More informed health care purchasers create another reason why boards are interested in quality. To succeed, health care providers must be able to demonstrate their quality and efficiency to a steadily more sophisticated public and to major institutional purchasers of health care. In Pittsburgh, for example, a preferred provider organization of "efficient, high-quality" hospitals will seek employers' business using comparative data on quality and costs to back up its claims. Each hospital's governing body expects that its organization is prepared to document its quality and efficiency to meet the demands of the local marketplace.

To a business leader serving on a hospital board, quality means meeting the needs of customers, including patients, families, payers, physicians, and employees. The trustee knows that high-quality care and service are as important as the financial bottomline.

An Unfamiliar Phenomenon

Boards' newfound interest in quality issues simultaneously suprises, pleases, and occasionally frustrates physician executives. Board members are asking about things that only recently they "trusted" the medical staff to do.

For example, recently an anesthesiologist with good educational credentials and references from several years in practice applied to a hospital staff. He had been sued several times, hardly remarkable in that specialty. When a board committee reviewed the recommendation for appointment, it raised questions about the lawsuits; it was told that the chairman of anesthesiology had reviewed the suits and was "satisfied."

"Not good enough," responded the committee, politely but firmly. "We trust you, but we need to know more in order to discharge our responsibility." The board members on the committee wanted to know how many suits had been filed, the outcomes of jury verdicts or settlements, and whether any evidence in the cases raised serious concerns about the physician's clinical abilities. Interestingly, physician members of the governing board agreed that these were reasonable questions. "The board needs to know the credentialing process is working," they said.

Similarly, board members are asking questions about the quality assurance program. Are trends being spotted and problems corrected? If not, why not? Boards also expect to see rates of utilization, mortality, infection, readmissions, and other indicators of quality, especially for procedures that attract media attention, such as cesarean sections and cardiac surgery.

On occasion, nonphysician board members reveal their limited medical knowledge with their questions. When reviewing QA reports, they sometimes get into clinical issues a bit more than appropriate. On rare occasions, confidentiality hasn't been respected. On the whole, however, heightened board interest in quality is a positive step. Through their questioning, through better information provided by management and physician executives, and through selection of board members with relevant backgrounds, boards are exercising their ultimate accountability for quality with increasing effectiveness.

"Our board has expectations as to the quality of the process and the nature of the data they are presented with," says Steven Landgarten, MD, Vice President for Medical Affairs, Hillcrest Medical Center, Tulsa, Okla. "They have reached the stage where they ask exactly the right questions."[10]

"The litmus test will be when the board spends as much time on the quality improvement report as it does on the financial statement," adds William F. Minogue, MD, Medical Director, George Washington University Medical Center, Washington, D.C.[10]

What Boards Need to Know

The physician executive faces the challenge of deciding what information the board needs to do its job and how that information should be displayed for board review. Boards are primarily interested in several kinds of information:

* Accreditation results, plans for

correcting deficiencies, and preparation

for future surveys.

* Verification of the credentials and

satisfactory performance of physicians

being recommended for staff

appointment, reappointment, and

clinical privileges.

* Evidence that the quality assurance

and risk management programs

are working effectively, i.e.,

that they are identifying and resolving

significant patient care issues.

* Meaningful statistical measures of

the quality and efficiency of care.

* Meaningful measures of the quality

of service, as perceived by external

customers (e.g., patients and community)

and internal customers

(e.g., physicians and nurses).

* A demonstration of an organizationwide

dedication to quality improvement,

backed by adequate resources

and top-level commitment.

Two common mistakes made in trying to provide this information are, first, failing to educate the board and, second, burying the board in voluminous paperwork.

Boards that are educated about their quality of care role and about the hospital's QA and credentialing processes can understand the information they receive, ask good questions, and make good decisions. Undereducated boards either ask too many questions and get into operational or clinical issues or, alternatively, ask no questions about quality reports because they don't understand what's going on.

Education is a key to board effectiveness. Retreats, brief educational sessions as part of board meetings, and relevant reading materials are among the tools physician executives can use to enhance their boards' effectiveness in dealing with quality-related issues.

The second common error is to confuse management information with board information. A physician executive may have time to review 50-100 pages of QA reports or all the documents in a new applicant's credentials file. Board members, on the other hand, need information that is concise and clear, highlighting the facts they need to know in order to make an informed decision. A key task for the physician executive is to translate quality-related data into governance information that directly helps the board discharge its responsibilities.

Building Board Effectiveness on

Quality-Related Issues

A number of techniques are proving useful in optimizing board involvement in quality issues. These include:

* Creating a high-level "quality committee" that addresses quality-related policies and decisions prior to their submission to the full governing body. This committee generally includes physician and nonphysician board members, the CEO and/or senior management, and senior physician executives. It provides the same high-level leadership attention to quality issues as do other board committees, such as the finance or long-range planning committees. Committee members develop expertise in quality, and, over time, the governing body gains confidence in the thoroughness of its recommendations.

* Developing a set of goals and an annual calendar to guide the quality committee in its work.[10] A sample set of goals and an annual work calendar is shown in the figure on pages 10-11.

Table : Example of Board Quality Committee Annual Workplan(*)

Goal/Objective Staff Responsibility

JULY/AUGUST

Credentialing. New appointments          VP, Medical Affairs/Medical
and reappoinments (summer cycle)         Executive Committee (MEC)
Quality Improvement                      QA Director/Medical Dir.

Seimiannual review of QA activity

Guest Presentation: How Medical          Chair, Mortality
Staff Mortality Review Works             Review Committee
Miscellaneous. Approval of annual        Committee Chair

committee goals and workplan

SEPTEMBER

Credentialing. New appointments          VP, Medical Affairs/MEC
Quality-Related Policies. Annual         VP, Medical Affairs
approval of QA plan                      QA Director
Quality Improvement. Selection of        QA Director

statistical quality indicators for reporting to Board

Presentation of proposed continuous CEO quality improvement" program

OCTOBER

Credentialing. New appointments VP, Medical Affairs/MEC and reappointments (fall cycle)

Special projects. Report from joint      Chair, Hospital/
hospital/medical staff committe on       Medical Staff Committee

setting minimum activity levels for active privileges

Quality Improvement/Risk Risk Manager

Management. Semiannual report of risk management indicators; status of active and recently close claims

NOVEMBER

Credentialing. New appointments          VP, Medical Affairs/MEC
Quality Improvement. Semiannual          QA Director

presentation of statistical quality indicators

Accreditation. Mock accreditation VP, Medical Affairs survey results. Special reports on areas with contingencies in past surveys.

DECEMBER/JANUARY

Credentialing. New appointments          VP, Medical Affairs/MEC
Special Projects. Report from bylaws     CEO/Hospital Counsel

committee on new provisions to address Healthcare Quality Improvement Act

Quality-Related Policies Review and Chair, Ethics Committee approval of new "Do Not Resuscitate" Policy

Special Projects. Development of VP, Medical Affairs/CEO quality goals for product lines

Quality Improvement. Report on quality VP, Nursing of nursing services

Miscellaneous. Six-month review and Committee Chair revision of committee work plan

FEBRUARY

Credentialing. New appointments and VP, Medical Affairs/MEC reappointments (winter cycle)

Quality Improvement. Semiannual CEO report on QA activities

Guest Presentation: Quality Director, ATC

Measurement in the Addiction Treatment Program (ATC)

MARCH

Credentialing. New appointments          VP, Medical Affairs/MEC
Quality Improvement/Risk                 Risk Manager

Management. Semiannual report of risk management indicators; status of active and recently closed claims

MAY

Credentialing. New appointments and VP, Medical Affairs/MEC reappointments (spring cycle)

Quality Improvement. Presentation on Chair, Emergency Medicine the emergency department monitors quality

Semiannual report of statistical quality QA Director indicators

JUNE

Credentialing. New Appointments            VP, Medical Affairs/MEC
Quality Improvement. Guest Speaker         Chair, Utilization Review
How the Medical Staff Monitors             Committee

Appropriateness

(*)The Quality Letter for Healthcare Leaders, July-Aug. 1989

* Developing information guidelines. These guidelines describe the types of information the quality committee and the entire governing body need to see (e.g., semiannual or quarterly summaries of QA activity in high-risk and high-volume areas, quarterly status reports on corrective action for Joint Commission contingencies, and annual statistics for selected statistical indicators of quality of care and quality of service).

* Developing brief summary formats for highlighting the background of applicants to the medical staff. These formats allow boards to quickly review the verification of credentials and to focus on any areas of possible concern, such as loss or reduction of privileges elsewhere, equivocal references, previous impairment, or professional liability involvement. On the positive side (and often forgotten), the summary of qualifications also can inform board members of the high caliber of new members of the medical staff.

* Engaging the board in discussion of policy-level issues pertaining to quality. For example, one quality committee discussed a proposed revision in the "Do Not Resuscitate" policy prior to its submission to the full board. Another worked on a policy concerning physician impairment.

Role of the Physician Executive

Quality-related information almost always requires explanation and interpretation. The board looks to the physician executive as a source of independent clinical expertise and impartial judgment. For example, each year the Health Care Financing Administration releases comparative hospital mortality data to providers several months before their release to the media and the public, to allow time for review and analysis. The HCFA mortality data are viewed by most physicians as flawed and having limited utility. However, board members need to know about the Medicare mortality data before they hit the local press.

The board looks to the physician executive to summarize the lengthy HCFA release into a brief report, highlighting the hospital's highest volume DRGs and how its rates compare with HCFA's norms. In addition, the board expects an interpretation of the HCFA data:

* Are the data valid? Why or why not?

* Is mortality a good indicator of quality? Why or why not?

* If mortality rates are significantly above the norm or higher than a previous year's, have reasons been sought, and what are they?

Interpretation of quality-related information is especially important at this time, because boards have no quality equivalent to the financial statement. A balance sheet plus the profit-and-loss report provide boards with financial information in a format that is clear and current; while not perfect, it offers a reasonable indication of financial health. In addition, because of standard accounting practices, financial statements and measures are roughly similar in all environments. The quantifiable nature of finance makes a concise, uniform board report possible.

Quality is not so easily synthesized and quantified. Commonly used outcome indicators, such as unexpected mortality, postoperative complications, infection, medication errors, excessive blood loss, and readmission rates, are defined and applied differently across - and even within - institutions.

High-quality care is complex and hard to define. Peer reviewers often disagree over the standard of care. There is often a lack of medical consensus on the most appropriate or efficacious treatment. Even though the science of quality measurement is improving, the straightforward quality indicators that boards want are crude and require careful interpretation by medical professionals.

As a result, the physician executive plays a critical role in communicating with the board on quality. The physician executive turns raw data into meaningful information and places it in a context that is relevant for board policy and decision making.

In their dealings with the board, physician executives must be mindful of the board/CEO relationship. Boards hold the CEO accountable for everything that goes on in the institution. In one hospital, the board chairman unwisely used the medical director, an old friend, as an inside source on hospital happenings. Such end runs weaken the CEO's authority and can wind up polarizing hospital/medical staff relationships. On the other extreme, some CEOs try to shield the board from the medical director, filtering most quality-related information themselves. This tactic can deny the board a valuable and credible source of education and interpretation. The physician executive needs to establish a collaborative relationship with the CEO.

As boards exercise an increasing role on quality-related issues, they seek more involvement with physician executives. The physician executive's role vis-a-vis the governing body should allow the board access to the information it needs without subverting the CEO's position or compromising the physician executive's responsibility for patient protection.

REFERENCES

1. The average size of not-for-profit hospital boards was 18, according to Hospital Governance Survey. Chicago, III.: Hospital Research and Educational Trust, 1985.

2. Rehm, J., and Alexander, J. "New Trends in Governing Board-Medical Staff Relations." Trustee 39(7): 15-8, July 1986.

3. 33 Ill. 2d 326, 211 N.E. 253 (1965), cert.denied, 383 U.S. 946 (1966).

4. No. 228566 (Super.Ct.Cal.Sacramento Cty, 1973), reversed on other grounds, 60 Cal.App. 3d 728 (1976).

5. 97 Wis.2d 521, 294, N.W. 2d 501 (1980), aff'd 99 Wis. 2d 708, 301 N.W. 2d 156 (1981).

6. 132 Cal.App.3d 332, 183 Cal.Rptr. 156 (1982).

7. Jackson v. Power, 743 P.2d. 1376, Alaska Supreme Court (1987).

8. Redding v. St. Francis Medical Center, 255 Cal. Rptr. 806, 1989.

9. Accreditation Manual for Hospitals, 1991. Chicago, Ill.: Joint Commission on Accreditation of Hospitals, 1990.

10. "The Quality Agenda." The Quality Letter for Healthcare Leaders 1(1): 3, 12-5, July/Aug. 1989.

Barry S. Bader is a hospital trustee and the president of Bader and Associates, Inc., Rockville, MD, a consulting and publishing firm specializing in health care governance and quality issues. He also is Chairman of the Medical Affairs Committee, Board of Trustees, Suburban Hospital, Bethesda, Md.

COPYRIGHT 1991 American College of Physician Executives
COPYRIGHT 2004 Gale Group