Hospi­tal boards still play­ing catch-up on di­ver­sity

Modern Healthcare - - NEWS - By Me­lanie Evans

The Henry Ford Health Sys­tem’s hos­pi­tals and its health plan op­er­ate in the racially and eth­ni­cally di­verse area of met­ro­pol­i­tan Detroit. But un­til about seven years ago, the board mem­bers of the sys­tem and its sub­sidiaries were largely white de­spite lead­er­ship’s de­sire to boost di­ver­sity. “We weren’t mak­ing progress, frankly,” said Nancy Sch­licht­ing, Henry Ford’s CEO since June 2003.

In 2007, the Detroit-based sys­tem launched what is now a rou­tine re­view of how closely the makeup of its boards re­flects the com­mu­ni­ties it serves. Two years later, it es­tab­lished CEO com­pen­sa­tion in­cen­tives tied to in­creased di­ver­sity in re­cruit­ing and hir­ing through­out the or­ga­ni­za­tion. Only 10% of the 900 hos­pi­tals and health sys­tems sur­veyed by the In­sti­tute for Di­ver­sity in Health Man­age­ment in 2011 tied ex­ec­u­tive pay to di­ver­sity goals.

Now Henry Ford’s sys­tem-level board meets an­nu­ally with the chairs and nom­i­nat­ing com­mit­tee mem­bers for each sub­sidiary board to re­view how closely mem­ber­ship re­flects com­mu­nity di­ver­sity and how re­cruit­ing may ad­dress gaps. “We were re­ally very in­ten­tional,” said San­dra Pierce, board chair­woman for the Henry Ford Health Sys­tem and pres­i­dent and CEO of Char­ter One bank in Michi­gan.

As a re­sult, across all of its boards, roughly 27% of Henry Ford’s trustees now are non-white, com­pared with 19% in 2005. The share of fe­male board mem­bers has re­mained fairly steady at a lit­tle more than one-third.

But at many other not-for-profit hos­pi­tals and health sys­tems, not much has changed, gov­er­nance ex­perts say. Last year, 47% of not-for­profit hospi­tal gov­ern­ing boards lacked even a sin­gle racial or eth­nic mi­nor­ity mem­ber, ac­cord­ing to the Gov­er­nance In­sti­tute, a con­sult­ing group. While only 3% of boards lack fe­male mem­bers, the me­dian board makeup is three women among 13 board mem­bers. Two of the most re­cent Amer­i­can Hospi­tal As­so­ci­a­tion tri­en­nial gov­er­nance sur­veys found that mi­nor­ity board mem­bers ac­counted for 9% of hospi­tal di­rec­tors and trustees in 2009 and 10% in 2011. The lat­est sur­vey is cur­rently un­der­way.

Boards “in no way” re­flect their com­mu­ni­ties, said Dr. John Combes, pres­i­dent of the AHA’s Cen­ter for Health­care Gov­er­nance.

Over the next three decades, the U.S. will be­come a “na­tion of mi­nori­ties,” with no one racial or eth­nic group mak­ing up a ma­jor­ity of the pop­u­la­tion, federal projections show. Mi­nori­ties ac­counted for 37% of the U.S. pop­u­la­tion in 2012, and that will in­crease to 57% by 2060.

As the na­tion be­comes more di­verse, hos­pi­tals’ lack of di­verse lead­er­ship grows more trou­bling, Sch­licht­ing said. “It’s like we’re not pay­ing at­ten­tion to the world we live in,” she said.

“If you never have a met­ric, then you’re never held ac­count­able.”

—Con­nie Cur­ran Founder and CEO Best on Board

Henry Ford’s sys­tem­atic ap­proach to greater di­ver­si­fi­ca­tion of its gov­ern­ing boards is one that is widely en­dorsed but too rarely prac­ticed across the in­dus­try, gov­er­nance ex­perts say. Board di­ver­sity as­sess­ments, for­mal di­ver­sity poli­cies and mea­sures to track progress are needed among hospi­tal boards and in­dus­try­wide, they ar­gue.

“If you never have a met­ric, then you’re never held ac­count­able,” said Con­nie Cur­ran, founder and CEO of Best on Board, a health­care board ed­u­ca­tion and cer­ti­fi­ca­tion com­pany. Ex­plicit fi­nan­cial in­cen­tives for ex­ec­u­tives to ex­pand di­ver­sity also help. “Num­ber one, you get what you mea­sure,” she said. “Num­ber two, you get what you re­ward.”

The is­sue is about far more than just num­bers. Ho­mo­ge­neous boards that fail to re­flect the de­mo­graph­ics of the com­mu­ni­ties they serve—by gen­der, race, eth­nic­ity, age, ge­og­ra­phy and so­cio-eco­nomic sta­tus—risk ex­clud­ing knowl­edge and ex­pe­ri­ence that will bet­ter in­form poli­cies to im­prove pa­tient care and pro­vide ser­vices com­mu­ni­ties need, ex­perts say. In­creased di­ver­sity in gov­er­nance and man­age­ment is one of three strate­gies crit­i­cal to elim­i­nat­ing health­care dis­par­i­ties, ac­cord­ing to a 2012 re­port is­sued by the AHA, the As­so­ci­a­tion of Amer­i­can Med­i­cal Col­leges, the Amer­i­can Col­lege of Health­care Ex­ec­u­tives, the Catholic Health As­so­ci­a­tion and Amer­ica’s Es­sen­tial Hos­pi­tals.

Re­cruit­ing strate­gies urged

That re­port rec­om­mended that hos­pi­tals de­velop for­mal re­cruit­ing strate­gies, es­tab­lish and track met­rics, and pro­mote cul­tural com­pe­tency through­out the or­ga­ni­za­tion to re­tain di­verse re­cruits. “Sup­port and ac­knowl­edg­ment by the board and se­nior lead­er­ship are re­quired, and in­cor­po­rat­ing di­ver­sity ef­forts as part of an or­ga­ni­za­tion’s strate­gic mis­sion is crit­i­cal,” the re­port said.

The Amer­i­can Hospi­tal As­so­ci­a­tion has called for boards to re­flect the di­ver­sity of their com­mu­ni­ties within the next six years.

Be­sides ad­dress­ing health­care dis­par­i­ties, hav­ing a more di­verse board strength­ens over­all hospi­tal op­er­a­tions. “The

“The whole point of di­ver­sity is di­ver­sity of per­spec­tives that will al­low a richer mix of view­points and some­times dif­fer­ing views to en­hance the qual­ity of de­lib­er­a­tions and qual­ity of de­ci­sions.”

—Lawrence Pry­bil Pro­fes­sor of health­care lead­er­ship and as­so­ciate dean Univer­sity of Ken­tucky Col­lege of Pub­lic Health

whole point of di­ver­sity is di­ver­sity of per­spec­tives that will al­low a richer mix of view­points and some­times dif­fer­ing views to en­hance the qual­ity of de­lib­er­a­tions and qual­ity of de­ci­sions,” said Lawrence Pry­bil, a pro­fes­sor of health­care lead­er­ship and as­so­ciate dean at the Univer­sity of Ken­tucky Col­lege of Pub­lic Health.

At Catholic Health Ini­tia­tives, the 13-mem­ber sys­tem board in­cludes 10 women and two African-Amer­i­can mem- bers, and the sys­tem’s CEO is Kevin Lofton, who is once again on the list of Mod­ern Health­care’s Top 25 Mi­nor­ity Ex­ec­u­tives. Christo­pher Lowney, CHI’s board chair­man, said the sys­tem board’s di­ver­sity com­mit­tee sets di­ver­sity goals and strate­gies and works with the boards at each of the sys­tem’s 89 hos­pi­tals to achieve greater di­ver­sity among lead­ers and staff.

Slow turnover

One rea­son for the slug­gish progress on di­ver­sity na­tion­ally is slow turnover among board mem­bers, Combes said. Trustees and di­rec­tors hold longer tenures than hospi­tal CEOs—an aver­age of nine years, com­pared with four years for CEOs.

More im­por­tantly, boards too of­ten do not iden­tify di­ver­sity as a ma­jor goal, un­like tar­gets for fi­nan­cial per­for­mance and qual­ity of care. In 2011, two out of three hos­pi­tals sur­veyed by the In­sti­tute for Di­ver­sity in Health Man­age­ment and the Health Re­search and Ed­u­ca­tional Trust had no for­mal goal for their boards to re­flect the di­ver­sity of their pa­tients.

Ex­perts say boards should in­cor­po­rate di­ver­sity goals into the an­nual self-as­sess­ment, by­laws and com­mit­tee char­ters and tools used for trustee and di­rec­tor re­cruit­ment. The Cen­ter for Health­care Gov­er­nance en­cour­ages hos­pi­tals to in­clude di­ver­sity of race, eth­nic­ity, gen­der, pro­fes­sion and age in board mem­ber se­lec­tion cri­te­ria.

The Greater New York Hospi­tal As­so­ci­a­tion launched a net­work­ing ef­fort nine years ago to con­nect hos­pi­tals with a more di­verse field of gov­er­nance can­di­dates. Hos­pi­tals have re­cruited 30 new trustees or di­rec­tors through the pro­gram, said Lee Perl­man, the or­ga­ni­za­tion’s ex­ec­u­tive vice pres­i­dent. “It doesn’t hap­pen by ac­ci­dent,” he said.

The de­gree to which a sys­tem’s ex­ec­u­tives and board mem­bers strive for an in­clu­sive cul­ture mat­ters a lot, said Ver­netta Walker, vice pres­i­dent of con­sult­ing and train­ing for ad­vi­sory firm Board-Source and head of its di­ver­sity pro­gram. In­clu­sion must be so­cial as well as func­tional. Adding a board mem­ber to be po­lit­i­cally cor­rect “doesn’t pay off,” she said.

Henry Ford’s Sch­licht­ing said she worked to ex­pand her

Trustees and di­rec­tors hold longer tenures than hospi­tal CEOs— an aver­age of nine years com­pared with four years for CEOs.

own pro­fes­sional net­work by meet­ing with a broader group of di­verse board can­di­dates. “I did a lot of lunches,” she said. It’s a lit­tle like rolling a boul­der downhill. As Henry Ford’s boards be­come more di­verse, the re­cruit­ing net­work grows broader and more di­verse. “There are al­ways tal­ented people,” she said.

Still, limited board di­ver­sity across the coun­try won’t change as long as board mem­bers re­main com­fort­able with a largely ho­moge­nous mem­ber­ship and they don’t es­tab­lish clear di­ver­sity tar­gets, Best on Board’s Cur­ran said. So far, pres­sure for change from lead­er­ship has been lack­ing. “Mostly, I think that ig­no­rance is bliss,” she said.

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