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The Ultimate Checklist on Good Governance

Healthcare organizations of all sizes are comprised of many moving parts. This can leave even the savviest leader feeling overwhelmed. What is the key to fine-tuning these moving parts into the most effective possible healthcare solution? 

Many would say “governance.” The American Academy of Professional Coders (AAPC) defines governance as a “[focus] on business performance and compliance with laws, regulations, and ethical responsibilities, so that the organization contributes positively to its stakeholders and within the community it serves.”1  While this may seem like a great deal of ground to cover, with the right approach and the right systems in place, good governance can be achieved and maintained to produce a well-oiled, high-functioning healthcare machine.

Nick A. Fabrizio, PhD, FACMPE, FACHE, principal, MGMA Consulting has written extensively about the topic during his 25+ years of hospital and medical group experience and has established several key areas of focus when designing and implementing a system of governance. Examine these areas and compare them with an approach to implementing governance systems. Consider them a checklist on good governance.

Form a Board.

Fabrizio has written about the importance and helpfulness of constructing a board of directors. This can take pressure off of busy administrators and physicians so they can spend more time making the gears run smoothly or providing the best possible care to patients, respectively. When constructing a board, ask these questions: 
  • Why is the board necessary? 
  • What is the purpose of the board?
  • What issues will the board address?
  • What are the formal duties and responsibilities of board members?
  • What degree of power will the board possess?

Assess Owner’s Needs Versus Group Needs.

Many decisions within a group or practice may be dependent upon the owner, especially when it comes to those smaller in size. Fabrizio writes that it is important to differentiate the needs of the owner and group and assess the owner’s desired degree of participation in the group’s governance structure. He continues by reminding us, “The owner might have certain issues that are off-limits or reserve powers related to hiring other providers, adding services or specialties, real estate matters and the sale or merger of the group. It’s important to put this list in writing and clarify each issue before you finalize a committee charter or you will undermine the true value of a board of directors and leave members unsatisfied with their stated obligations.”

Represent the Entire Group’s Interest.

Fabrizio writes that while it may be easy to equally represent every area of your group or practice if it has a uniform specialty, this can become difficult with multiple specialties – as any specialty receiving favoritism (whether real or perceived) can become problematic as far as the group’s effective functionality. He advises to consider certain areas to preemptively address this issue, such as: 
  • The frequency of group meetings and whether an agenda is provided in advance
  • Whether minutes are recorded and distributed during these meetings
  • Whether the board’s purpose has been discussed
  • Whether the leader of the board is also the leader of the group or has a majority
  • interest 
  • Whether potential conflicts of interest have been addressed in official language

Focus on Quality of Care.

Don’t get so caught up in administrative and bureaucratic details that you forget why you’re here in the first place. The whole point of having effective and high functioning systems in place is to provide the best possible care to every patient. To that end, make sure your board has structures in place to oversee quality and ensure it is satisfactory.

Maintain Financial Accountability.

While quality of care is certainly important, the financial health of your group is equally so. After all, unhealthy financial affairs are bad for patients and physicians. It’s imperative your board maintains financial accountability and keeps the budget aligned with the group’s established goals. Also, be mindful that changes in healthcare legislation have restructured many reimbursement mechanisms, and this has real and immediate consequences for smaller medical groups. The board must not only understand the group’s financial specifics in terms of budget and compensation, but the external affairs such as the aforementioned that will affect your group.

Prioritize Cybersecurity.

Fabrizio discusses how hospitals and medical group practices are often highly sought-after targets for teams of hackers conducting cyberattacks. This vulnerability can stem from the organizations’ storage of electronic health records, as well as their providers, third-party vendors and suppliers. The board should be cognizant of the prevalence of these threats, as well as their specific group or organization’s vulnerability. When assessing their approach to cybersecurity, a board should examine: 
  • How much time and resources should be allocated to address the issue
  • Which member(s) should assume responsibility for oversight
  • Which pieces of information should receive the highest level of protection
  • How much of the budget can be reasonably used to address the issue

Fabrizio reminds us that while the board should spearhead the directives of cybersecurity measures, it is the responsibility of senior management to actually manage the risk. It may be helpful to include cybersecurity risk management as an element of the aforementioned executive management performance process. When assessing your degree of risk, educate yourself about the following varieties of risks (as well as conduct your own research about additional threats not mentioned here): phishing, password theft, trojans and malware, third party access and malvertising (the use of online advertising to spread malware).

Assess the Performance of Executive Management.

One function of your newly assembled board may be to assess the work of the group administrator. If this will be a function of your board, it may be helpful to establish an objective process of assessing, monitoring and measuring performance. Ideally, the group’s administrator will have been given a detailed written job description, as well as short- and long-term goals. When establishing evaluation processes, look to these factors and compare the actual performance against these barometers. Some specific skill and performance areas to measure include: decision-making skills, resource and capital use and allocation, human resource use and allocation and ability to lend guidance and vision to the group.

Develop a Strategic Plan.

A strategic plan will help the group maintain a measured and consistent approach to daily tasks, as well as challenges and obstacles. Build the strategic plan upon the foundation of the group’s vision, mission and values so it gels effortlessly with the culture and identity. Articulate in writing the group’s strengths, weaknesses, opportunities and threats (SWOT analysis) and incorporate them into the plan. Consider how to utilize the strengths, minimize weaknesses, capitalize on the opportunities and combat the threats.

Devise an Action Plan.

Not to be confused with the strategic plan, the action plan consists of action items critical to the group’s success, the specific goals of these items, a deadline and the board or group member to whom the item is assigned. It’s extremely important to specify who is responsible for which item and when it is due. This way, the board, the group and the individual can know who is accountable for the task so that it does not slip through the cracks. The action items should also be added to the board calendar so that they stay top-of-mind and their progress can be tracked and discussed during board meetings.

Good governance is essential to the prosperity of your group, and while there is no one method acknowledged across the board, Fabrizio’s methods and approaches have proved to be successful for many groups and practices. 

 1“Your Role in Healthcare Governance” the American Academy of Professional Coders

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Contact Us | 

Nick Fabrizio at LinkedIn 

877.275.6462, ext. 1877

MGMA Consulting is the industry leader in creating meaningful change in healthcare, one organization at a time, in the areas of Operations, Strategic Planning and Governance, Financial Management, Staffing and Compensation as well as Practice Transformations. Consultants average more than 30 years of diverse and extensive experience in the business of healthcare, have had extensive careers as practice executives, are deeply connected to the business of care delivery and offer solutions customized for each organization. Consultants within MGMA Consulting have access to MGMA DataDive, a rich and robust set of medical practice survey data gathered by MGMA, the nation’s largest premier practice management membership organization.


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