Hospital Boards Lay the Foundation for Quality and Safety

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Tom Haederle
America's very first hospital opened its doors in Philadelphia in 1752. And in that first model the hospital's board members or overseers were responsible for its finances, while doctors and medical staff were charged with issues of quality and safety. That set the pattern for the next 200 years. It wasn't until the advent of Medicare in the 1960s that hospital boards were assigned primary responsibility for quality and safety as a condition of participation in the program.

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Tom Haederle
Today, those responsibilities have only grown in size and scope.

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Tom Haederle
Welcome to Advancing Health, a podcast from the American Hospital Association. I'm Tom Haederle with AHA communications. In this Safety Speak series podcast hosted by Sue Ellen Wagner, vice president of Trustee Engagement and Strategy with AHA, she speaks with Jamie Orlikoff, National Advisor on Governance and Leadership to the American Hospital Association and one of the nation's leading experts on the role hospital boards can play in supporting quality and safety efforts within their organizations.

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Tom Haederle
As Orlikoff notes, the basic question hasn't really changed much since that first hospital took in patients so long ago. Now, as then, the challenge remains: how can laypeople who are not nurses or clinicians get comfortable with their roles on the board and actually improve quality and safety?

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Sue Ellen Wagner
Thanks, Tom. I'm very happy to be with Jamie Orlikoff today, who's going to be talking to us about laying the foundation for the board's role in quality and patient safety. Jamie Orlikoff is president of Orlikoff and Associates Incorporated, which is a consulting firm that specializes in health care governance and leadership strategy, quality, patient safety and organizational development.

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Sue Ellen Wagner
And he's also the national advisor on Governance and Leadership for the American Hospital Association. Jamie, thank you for joining me.

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Jamie Orlikoff
My pleasure. Well, I'm happy to be here.

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Sue Ellen Wagner
Would you tell folks a little bit more about a lot of your accomplishments that you've had over the several years?

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Jamie Orlikoff
Accomplishments I don't know if I'll emphasize, but I'll talk a little bit about my engagement in this topic. You know, the board's role in oversight and quality. I'm doing a little research and prep for this podcast came across a book that I and a colleague of mine wrote, Mary Totten is her name - back in 1991, which was called the Board's Role in Quality of Care, and it was the very first book written about this topic that we're going to discuss.

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Jamie Orlikoff
And in looking over it, I didn't know whether to be horribly embarrassed or, you know, shocked at how naive much of the content was. But some of it is still right on track. The essential concept that the board bears the responsibility for quality, which we can chat about if you're interested. So I would just mention that and then that I've spent, you know, a good, good portion of my career addressing this challenging issue.

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Jamie Orlikoff
You know, how can a board that is composed primarily of lay individuals, i.e. people who are not clinicians, they're not physicians, they're not nurses. How can they, first of all, get comfortable with their responsibility to oversee the issues of safety and quality and then to effectively improve, you know, act as a board to effectively improve the quality of care that's provided in their organizations and the safety profile within their organization?

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Jamie Orlikoff
And so I've been approaching that from many different perspectives for 40 years. I don't know if you'd call that an accomplishment. Sometimes I feel like Don Quixote tilting at windmills, but that's all I'll say on that.

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Sue Ellen Wagner
Well, and also, you get to practice what you preach. You've been on boards, you've chaired a couple of boards. You just want to mention that.

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Jamie Orlikoff
Yeah. Well, right now I just stepped down as board chair of the Saint Charles Health System at the end of 2023. I'm still on the board, and I am chair of the board's Safety and Quality Committee. So I'm still very, very engaged in this particular issue and specifically in the interface of the board and the organization in terms of its oversight and quality.

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Jamie Orlikoff
So I will tell you, being a consultant to boards and also being a board member, it's much easier to be a consultant than it is to actually be a board member. It's very challenging, very difficult. It really gives you a very good perspective on the issues and the challenges.

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Sue Ellen Wagner
Good. Well, again, very happy that you're here with me today. So can you provide some background for the board's responsibility and role in quality and patient safety? And can you specifically speak to the CMS requirements of the governing body? I think this will be a really great foundation for some new board members.

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Jamie Orlikoff
I think the question you're asking is a really important one. And that notion is who is responsible for quality? And in the last it's really well understood. The default perspective and the incorrect perspective is the board takes care of finance and the medical staff takes care of quality. And that's not true. It used to be true. And that's the problem: is for many, many years, going back to the founding of the nation's first hospital by Ben Franklin in 1752, the role of the board was primarily raising money, and then later on managing that money.

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Jamie Orlikoff
The responsibility for quality, such as it was, rested with the medical staff, and they typically then just deferred that to the individual physician. That didn't change until the 1960s, as a result of a series of malpractice cases, the most famous one being from Illinois, the Darling vs.Charleston Memorial Hospital case, where the hospital was sued by the plaintiff, saying the hospital made some errors in failing to effectively oversee the physician and allowed the physician to injure

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Jamie Orlikoff
you know, the patient who became a plaintiff. And that was upheld at the Supreme Court level, where the court basically said that modern day hospitals do more than simply furnish facilities for treatment and very specifically said when a patient avails himself of the services of a hospital, he expects, at a minimum, that the hospital will endeavor to protect him from injury and more importantly, the hospital will attempt to keep him well.

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Jamie Orlikoff
And then here was the line that began to change everything: the public must be protected. From whence does this protection come? It comes from the Board of Trustees. Boom! That suddenly changed everything. Now, the case law was still kind of inconsistent with the state hospital licensing statutes. And remember, this is 1965. So Medicare legislation had just passed. But because of this case, it sent reverberations through the American health care system.

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Jamie Orlikoff
And within three to four years by 1969, all hospital state licensing statutes had been changed to say that the board bears the ultimate responsibility for quality. That the board oversees the medical staff and the medical staff reports to the board. So they're not separate, co-equal authorities, but there is a hierarchical relationship. And then to your point, you know, Medicare legislation passed in 1965 and then became effective in 1966 or right around that time, the kind of worker bees of government, the non-elected people had to write the Medicare regulations.

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Jamie Orlikoff
They said, you know, we're spending all this money. It's going to cost a lot of money. How do we oversee quality? How do we make sure there's good quality? Who is in charge of quality at the hospital? And they basically said, oh, look what just happened in Illinois. Look at the Darling case and look what state statutes are doing.

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Jamie Orlikoff
So they put into the very, very first Medicare rules, conditions of participation, which is basically a contract between a hospital and the federal government. They said the board bears the ultimate responsibility for quality. So that didn't change legally until 1965. Since then, it has become more codified in the law. In case law, and the Medicare regulations have become much, much more specific.

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Jamie Orlikoff
So now if you take a look at the conditions of participation, you go to their section 482.11 and 422.22. And they very specifically say, number one, there must be an effective governing body that's legally responsible for the conduct of the hospital. And then they immediately go in talking about it is the board who oversees the medical staff.

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Jamie Orlikoff
The board ensures that the medical staff is accountable to the governing body for the quality of care provided to patients. So right now, the Medicare regs make it very, very clear that it is the board that bears the ultimate responsibility for quality and more specifically, when a hospital gets in trouble with the federal government, when the government issues a what's called a 23-day letter, you know, basically saying you're out of compliance with the conditions of participation, you have 23 days to fix it.

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Jamie Orlikoff
And if you don't, if your remediation plan is not sufficient, you could lose your status to be eligible for Medicare reimbursement. Which is basically a death sentence for a hospital, because all of their commercial contracts specify that in order to be eligible for commercial reimbursement, they must be in good standing with the Medicare program. But whenever Medicare does this, and they do it more frequently than many hospital board members think, the number one citation when they say it was determined that you continue to be out of compliance

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Jamie Orlikoff
is that a regulation that I quoted to you, 482.12, the governing body that the board failed to fulfill its obligation to effectively oversee quality of care or oversee the medical staff in the provision of the quality of care. So that's a little bit of the history. And that's also kind of an emphasis that, you know, from a legal and a regulatory perspective, it is the board.

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Jamie Orlikoff
They bear the ultimate responsibility for quality. But yet many board members don't really understand that. Many medical staffs don't understand that. I'm amazed. Just within the last two years, the chief of the medical staff of a fairly, you know, decent-sized system told me the medical staff is responsible for quality. Wow. And I said, no, no, no, it's the board.

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Jamie Orlikoff
He said, no, no, no, no, it's the medical staff. So that is a factual issue which should not be open for debate. Now the other issue which we'll talk about, you know, perhaps later in this podcast or another podcast, is once that's understood, how does the board then effectively oversee quality? But in order to do that, everyone in the organization needs to understand that the board is responsible for quality.

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Jamie Orlikoff
What that means. And then you need to start to overcome some of the conceptual barriers to effectively being able to have governance oversight of quality. Don't you have to be a physician to understand quality? It's amazing how many board members kind of retreat to that defensive perspective. No one - you never hear anyone say, don't you have to be a certified financial professional to understand finance?

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Jamie Orlikoff
You never hear anyone say that, but you will frequently hear board members say, no, no, you've got to be a doctor or a nurse to understand quality. So the first step is really understanding that the board is.

00;11;00;20 - 00;11;28;11
Chris DeRienzo, M.D.
Thank you for tuning in to this episode of Safety Speaks, the podcast series dedicated to patient safety, brought to you by the American Hospital Association. I'm Dr. Chris DeRienzo, the AHA’s chief physician executive and a champion of the Patient Safety Initiative. The AHA patient safety initiative is a collaborative, data driven effort that lifts up the voices of individual hospitals and health systems into the national patient safety conversation.

00;11;28;14 - 00;12;00;14
Chris DeRienzo, M.D.
We strive to catalyze and connect health care professionals like you across America in your efforts to innovate and improve, and to bolster public trust in hospitals and health systems by helping you share your successes. For more information and to join the 1,500 other hospitals already involved, visit aha.org/patient safety or click on the link in the podcast description. Stay tuned to hear more about the incredible work of members of the AHA’s Patient Safety Initiative.

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Chris DeRienzo, M.D.
Remember, together, we can make health care safer for everyone.

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Sue Ellen Wagner
So when you're a hospital CEO and you know you have your board chair, you have new board members coming on. They should be explaining all of this to the new board members so that they understand that they're accountable, that they're responsible, that they don't need to be a physician, correct? So there needs to be some great lines of communication that come through so that new board members understand what they do.

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Sue Ellen Wagner
And it's probably not a bad idea for the CEO and board chair to remind the medical staff of the requirements too, that who's responsible and why.

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Jamie Orlikoff
Great points, Sue Ellen.  And what you're really talking about is one of the characteristics of effective governance is a really good mandatory new board member orientation process where this issue is discussed, you know, in some detail. And the same thing is true for a new orientation process for elected medical staff. So everyone understands it. And I'll give you a point.

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Jamie Orlikoff
I was facilitating a board self-evaluation session in the last six months, and one of the board members said, well, I'm really concerned because I think we're a micromanaging board. We spend all this time on medical staff credentialing, on approving the privileges of individual physicians. We shouldn't do that. That's management's job. Oh, man. So it's like, whoa, wait a minute now, how long have you been on the board?

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Jamie Orlikoff
And this person had been on board three years. Wow. How can you be on a hospital board for that length of time and not understand one of the basic concepts that the medical staff does not report to management. It reports to the board. That management doesn't make decisions or even recommendations regarding medical staff credentialing. And that's a board decision.

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Jamie Orlikoff
So that really emphasizes your point. You don't want board members to hopefully, you know, pick this up, you know, organically by going to meetings. You want to really emphasize this in the orientation process, because this is a responsibility of a board, which is unlike any other governance responsibility in non-health care organization. So there's really no equivalent to it.

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Jamie Orlikoff
And so that's where it really needs to be emphasized as you smartly point out.

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Sue Ellen Wagner
Great. Thank you so much. Any lasting comments Jamie on the history of quality and what boards should know.

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Jamie Orlikoff
Yeah, I would say if you really want to go back, you know, because I'm kind of a nerd on this topic, you know, and you want to take a look at origins of the interest in quality and safety. It goes back to ancient Babylonian in 2000 B.C., or about 4000 years ago. And, there was an emperor named Hammurabi who's famous for codifying the first set of written laws after cuneiform writing, the first written form of language came about. And one of the laws that he passed was a law establishing avenues for patients to redress grievances for perceived acts of malpractice against physicians.

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Jamie Orlikoff
And the law basically said, and this is a quote, if the physician has made an incision in the body of a free man and so has caused the man's death, or has opened a carbuncle in the man's eye, and so destroys the man's sight, they shall cut off the physicians for him, you know. So boom, there's a big problem there for several perspectives.

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Jamie Orlikoff
Number one, you see the punitive aspect that has been in existence for so many years. If there's a problem with quality or safety, that means someone did something wrong and they should be punished. And it's taken us years to get past that thinking and move into the concept of systemness and a just culture where we now begin to recognize that the majority of issues which cause injury to patients, preventable injury,

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Jamie Orlikoff
you know, that that cause less than optimal quality, are not individuals doing something wrong. There are problems in systems and systems which make it either impossible or very difficult for, you know, a provider to do the right thing. So that's one thing to take from that. And that's also a very important concept for boards to understand, because it helps them understand, oh, I get my job as a board to oversee a system and to look for levers which will improve a system.

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Jamie Orlikoff
So that actually is very helpful for many board members to get more comfortable with their responsibility for quality and safety. Now, the other really important issue in this law which we still deal with is these two different terms, safety and quality. And what's the difference? Boards really need to kind of understand this difference because they're related but different. Safety basically is not injuring the patient or the or a staff member, "doing no harm."

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Jamie Orlikoff
So safety equals the absence of injury. Quality, on the other hand, is doing all and only the care that we know will help the patient. So they're related but different. How? Just because you are not injuring patients does not mean you have good quality care. But if you are injuring patients, you cannot have quality care. So a good way of thinking about this is safety is like the floor, you got to have safety.

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Jamie Orlikoff
Quality is the ceiling. So it's important for board members to understand the difference because frequently this responsibility is integrated. Look at the name of the board committee that I chair, the safety and quality committee. So the board is responsible for both. But it has to be very, very cautious to make sure it understands both the relationship between these two very important concepts, but also how they are different so that they can work very effectively to say, okay, do we have safe care?

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Jamie Orlikoff
Because the answer is no. That's where the board's going to spend most of its attention until they get safe care. And then once they get that to a level where there is no or very, very low levels of, you know, preventable patient injury or preventable patient mortality, when they get to that point, then they can start to focus on making certain that they're providing all and only the care that, you know, science shows will benefit the patient.

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Jamie Orlikoff
So that's a little bit of the more of the background and the nuance and the history. But it also points out that, you know, going back to Hammurabi, you know, this law is 4,000 years old, and that was before there were hospitals. So the concern, society's concern for quality, for safety has been evident in every civilization since that time.

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Jamie Orlikoff
And board members are kind of the linchpin between the concern for society and the expression of it in their individual hospital.

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Sue Ellen Wagner
Well, thank you so much, Jamie, for joining us. Really appreciate it. That great background. And hopefully folks will be able to use this as a good part of their orientation.

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Tom Haederle
Thanks for listening to Advancing Health. Please subscribe and write us five stars on Apple Podcasts, Spotify, or wherever you get your podcasts.