Impact of Leadership on Today's Healthcare Environment

Accreditation Insider, December 14, 2015

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The importance of effective leadership in healthcare is becoming increasingly apparent. With a nationally and federally driven emphasis on transparency, public reporting of key performance metrics, and mandated requirements to improve the quality and clinical, financial, and operational outcomes of healthcare delivered in hospitals and healthcare systems, healthcare leaders must consider new leadership approaches to address these issues.

As public reporting of clinical outcomes and patient satisfaction scores increases in healthcare, the healthcare industry will see a shift in consumer choice, including the way in which patients and insurers select providers and hospitals. Although the need to improve quality and efficiency in healthcare exists, healthcare leaders continue to struggle in achieving and sustaining organizational success. There remains untapped a tremendous potential for leveraging sustainable quality outcomes and enhanced efficiencies in healthcare through the application of evidence-based leadership methodology.

 The governance responsibilities of a healthcare organization’s board, through its CEO and senior leadership designees, include establishing policy, rules, and bylaws consistent with the mission, vision, and purpose of the organization. The governing board also provides operational oversight through the CEO, who reports to the board. In turn, the board acts as a steward for the organization and is responsible to the local community that typically elected the individual board members, by statute to the state that granted the organization’s charter, and to the federal government under federal laws, rules, and regulations applicable to a nonprofit entity.

 There has been much legal and legislative activity following the failure of boards to effectively oversee publicly held organizations. The Sarbanes-Oxley Act (SOX), or the Public Company Accounting Reform and Investor Protection Act of 2002, as it is also referred to, and more intense scrutiny by the Internal Revenue Service have established new levels of accountability and responsibility for publicly held organizations. Although SOX was directed at publicly held organizations, according to the American Bar Association, “at least two criminal provisions apply to nonprofit organizations: provisions prohibiting retaliation against whistleblowers and prohibiting the destruction, alteration or concealment of certain documents or the impediment of investigations.”

 Likewise, under increasing pressure and scrutiny, many states have adopted SOX to address the growing concerns around governance and accountability in the nonprofit sector. Concern for the management of nonprofit organizations, such as nonprofit hospitals and health systems, has put hospital governing boards on notice and raised the bar in terms of their accountability for hospital operations and outcomes. Add to this today’s healthcare mandates through the Affordable Care Act (ACA), and the role of senior leadership in today’s healthcare organization in ensuring high quality and safety is at its most financially imperative.

Beginning in fiscal year (FY) 2015, the Hospital-Acquired Condition reduction program, mandated by the ACA, requires the Centers for Medicare & Medicaid Services (CMS) to reduce hospital payments by 1% for hospitals that rank among the lowest-performing 25% with regard to hospital-acquired conditions (HAC). HACs are those conditions that patients acquire while receiving treatment for another condition in an acute care health setting. Additionally, of the three penalty programs created by the ACA, the hospital readmissions reductions program is perhaps the most significant for FY 2015 inpatient programs in terms of financial disincentives. When the program was initiated in FY 2013, it cut up to 1% of Medicare inpatient payments for hospitals with excess readmissions for patients with acute myocardial infarctions (AMI), heart failure, and pneumonia. In FY 2014, the maximum penalty increased to 2%. In 2015, the maximum penalty for excess readmissions is 3%, which is the highest maximum amount allowed under the ACA. And for the first time, the program will consider readmissions for chronic obstructive pulmonary disease (COPD) and knee and hip arthroplasty.

As a senior healthcare leader, providing the level of leadership and guidance that can achieve and sustain organizational success when it comes to quality, safe patient care, and regulatory compliance is a key leadership skill that requires further development through information literacy and the application of evidence-based leadership. Additionally, emphasizing the need to apply evidence-based leadership within the healthcare system would facilitate the industry’s ability to achieve and sustain quality outcomes. By investing in current and future leadership, fostering an environment of information literacy and effective communication, and promoting evidence-based leadership, the achievement of quality outcomes and enhanced organizational efficiency within the healthcare industry can be realized.

 This is an excerpt from the HCPro book The Compliance Guide to The Joint Commission’s Patient Safety Systems Chapter. Visit HCPro Marketplace for more information and to order.


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