Tag Archives: health care reform

CEO Linda Hunt - AZ Business Magazine Mar/Apr 2011

Linda Hunt, CEO, St. Joseph’s Hospital And Medical Center

CEO Series: Linda Hunt

Title: President
Company: CHW Arizona/St. Joseph’s Hospital & Medical Center


How is St. Joseph’s preparing itself to meet the changes being brought on by national health care reform and the state’s budget crisis?

We’ve been on the ground from the very beginning. Catholic Healthcare West, our parent company, has really been involved with the Obama Administration in looking at different ways to provide health care, and we know that health care has to change. The most important thing for us has been quality — providing the high quality access. We have a lot of people without care or without access to care. So when you look at how do we do that and how do we lower our cost of delivering care, those things have been driving forces for St. Joseph’s and CHW to be intimately involved in what needs to occur.
It’s a tremendous strain if we have the (state) budget cuts that are proposed. About 44 percent of our patients are AHCCCS (Arizona Health Care Cost Containment System ) patients, and this will be anywhere between $25 million to $31 million for just our organization alone that we will see decreased.
We also are part owners of Mercy Care Plan, so for us it’s a real concern. Mercy Care Plan has 386,000 lives, and about 60,000 of those lives (coverage) will be eliminated if the state budget crises and the state waiver go through.

The mass shooting that took place in Tucson really put attention on the work of Level I trauma centers, such as the one at St. Joseph’s. What message has that sent to Legislators and the community?

Tucson was a great example of why Level I trauma centers are needed. It truly is the life-saving component of life care. If we would not have had the hospital in Tucson, if we would not have had the trauma surgeons, the neurosurgeons right there ready, a number of those people would not have survived. I think Gabby Giffords can really say one day, “I owe my life to these people and to the quick response that they had.” We have very limited funding. As you know, it’s not about money coming in from the federal government or the state government for Level I. It’s really thanks to a number of our patients who have insurance and the variety of people who give to us to make sure we can continue to have the resources available to provide that kind of care.

How has St. Joseph’s evolution mirrored that of the state’s health care industry?

When the (Sisters of Mercy) got here in the 1890s, they found a very small community of people who were working here, but also many other people who had come here because they were ill. (The sisters) came here to teach, and all of a sudden they looked around and said, “My gosh, it’s not about teaching. We have to provide health care for these people. They’re dying in the streets.”

So, I feel we are the beginning of health care in this community and have continued for almost 116 years. When you look at the number of firsts that were done at St. Joseph’s, many times we brought health care and progressive health care to this community. When you look at the first residency, the first pharmacy in-house, the first NICU, the first MRI, the first CAT scan … it truly is a jewel to be treasured in this community.

Is health care a cooperative effort in the Valley?

I think we all compete. We are businesses. But I think it’s a camaraderie because we’re all about taking care of people in this community. When you look back, there are a lot of great friendships that you have with the other CEOs. And we do share. We share resources. When we get in trouble as a Level I trauma center, when we’re overwhelmed, everyone pitches in and we fan out patients. We do a number of things together. If we need equipment, we lend it to each other. So in a way we compete, but we are all here to serve this community and I think that is very important.

How does St. Joseph’s work with rural communities?

Look at Children’s Rehabilitative Services, which we have been a partner of the state with in caring for children. We have clinics all over the state. We work with the Indian communities; we work with Flagstaff, Prescott; Yuma and Tucson work together with us. So right there is a perfect example of that collaboration. We have outreach clinics throughout the state, especially in the rural areas. We train residents and new physicians, which we think is a very important part of training the next generation of caregivers. We are training a lot of the physicians that will be practicing in rural Arizona and other rural areas of this country.

The Roman Catholic Diocese of Phoenix has stripped St. Joseph’s of its Catholic standing. how does that affect the average patient?

If you came into our hospital in early December and you came in today, we would look no different. The one thing we cannot do is Mass in the chapel. We still have worship services, they’re just not Catholic worship services. But we do have rosaries, we have spiritual hours, we have people who are there to allow you to pray and to provide that spiritual comfort, just as we did in the past. … We acknowledge that (Bishop Thomas J. Olmstead) has the authority to no longer designate us a Catholic hospital. We’re all very sad about that. … But we will always take care of people who are here and do what we can do to make sure they are safe, and that they receive the care that they deserve. … it came down to we had to save the life we could and we did.


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Vital Stats: Linda Hunt

  • Service Area President, Catholic Healthcare West
  • President, St. Joseph’s Hospital and Medical Center
  • Bachelor of Science in Nursing from William Carey College in Mississippi
  • Master of Science in Nursing Administration from the University of Colorado Health Sciences Center
  • Graduated from the Johnson & Johnson Fellows Program in Management at the Wharton School at the University of Pennsylvania
  • Was on the faculty at the University of Colorado Health Sciences Center and Regis University in Denver
  • Active in Greater Phoenix Leadership and the Greater Phoenix Economic Council

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Arizona Business Magazine Mar/Apr 2011

Health Care Reform in Arizona - AZ Business Magazine Nov/Dec 2010

Business And Community Leaders Are Trying To Figure Out What Health Care Reform Will Mean In Arizona

For government and business, providers and patients, the U.S. health care reform legislation promises a new world of costs and care.

Most individuals without insurance will be able to get it. Those who have insurance already probably will have to pay more for it. Hospitals, doctors and others in the front lines of health care will begin to change long-established ways of doing business. State governments and many businesses, already battered by recession, will face new costs and possibly some benefits.

But beyond these generalizations, little is certain about what health care reform will mean in Arizona and across the country. The bill is vague in many areas and leaves important details of implementation to be determined by federal regulators and other officials in the weeks and months ahead.

“Quite frankly, we won’t know the financial impacts until we move through the process and see what the federal government and insurance companies do,” says Donna Davis, chief executive officer of the Arizona Small Business Association (ASBA).

Barry Broome, president and chief executive officer of the Greater Phoenix Economic Council (GPEC), says it is too early know what the bill will mean.

“It sounds very good to be able to cover the uninsured, but what the costs are and how they are going to be distributed are still not clear,” he says.

Marjorie Baldwin, director of the School of Health Management and Policy and assistant dean at Arizona State University’s W. P. Carey School of Business, says it is important to note that the law’s primary purpose is to cover the uninsured.

“This bill is about access,” Baldwin says. “It’s designed to cover the uninsured. There is much less in it about quality of care and little about cost controls.”

On what the price tag for health care reform will be, Baldwin says, “The one safe prediction is that it is going to cost much more than anticipated.”

Hospitals and doctors
Whether the health care overhaul is ultimately deemed a success will be determined to a large extent by what happens inside the nation’s hospitals, clinics and doctors’ offices.

Peter Pavarini, a health care lawyer for Squire, Sanders and Dempsey and an adviser to health care organizations, believes hospitals are actually well-positioned to adapt to the new law.

“Hospitals have been anticipating something happening for some time,” Pavarini says. “Hospitals have the resources to prepare better than some of the other players in the health care system.”

Several provisions in the law are expected to lead to a dramatic shift in the way hospitals are paid by insurance. Under the existing system, providers receive set rates for specific medical procedures. The new law moves toward a system in which hospitals receive a set amount for treating an overall condition or a so-called “bundled payment.” This shift is expected to require more detailed treatment plans, coordinated care and closer cooperation among hospitals and physicians.

“With the bundled payments, you have to have a more integrated approach and an approach that aligns physicians and hospitals,” says Suzanne Pfister, vice president of external affairs at St. Joseph’s Hospital and Medical Center in Phoenix.

The hospital already has been moving in this direction, according to Pfister. St. Joseph’s has forged a series of partnerships with area health care organizations, including outpatient and short-stay providers United Surgical Partners and SimonMed Imaging
.
“We are continuing to look at moving from acute care to a continuum of care,” Pfister says.

Pavarini believes the new payment systems for Medicaid and Medicare will bring big changes to care at hospitals. When the system is in place, hospitals will get a set payment for delivering all of the care a patient receives from 72 hours before admission to 30 days after discharge, he notes.

“That’s a whole different model from what we have now,” Pavarini says. “This means it’s not good enough just to get the patient in and out of the hospital. It means testing can’t be duplicative. And it means patients better be ready for discharge when they’re released.”

Pavarini says doctors and hospitals will need to cooperate more closely as the law is implemented. He sees hospitals forging formal alliances with physician groups and appointing more practicing physicians to their boards of directors.
A more basic concern for hospitals is how much they will be paid. Because expansion of Medicaid is a key feature of the law, hospitals are concerned about long-term revenue.

“Payments are going to shift more to the level of Medicaid, and Medicaid has not been a particularly good payer,” Pfister says.

Officials at Phoenix-based Banner Health, one of the largest nonprofit health care systems in the country, are still examining the legislation to assess its consequences.

“This reform is primarily about health insurance, not health care reform,” the organization said in a statement. “It will result in expanded AHCCCS (Medicaid) coverage in Arizona and access to insurance, but the need remains to address reducing the cost of health care.”

The bill includes a number of provisions that will increase the role of primary-care physicians. Medicaid fees will go up for primary-care doctors, who also will be eligible for bonuses from Medicare.

St. Joseph’s is concerned about being able to find enough physicians as health care reform is implemented in the coming years, according to Pfister.

“Arizona has fewer physicians per capita than the national average, so we face that already. Arizona does not have enough primary-care physicians and even some specialists,” she says.

The larger hospitals that have formal ties to physicians and other providers probably will fare best under health care reform, according to Pavarini. But he believes smaller, more isolated hospitals will struggle and some will close.

“Arizona has a number of smaller hospitals in less populated areas,” he says. “I think the outlying hospitals in rural communities could have difficulty.”

Businesses
While all businesses will be affected by the health care reform law, some will feel it more than others. Probably least affected will be firms that already provide health insurance now and have a pool of employees large enough to allow the companies to self-insure.

“For most large businesses, fundamentally there’s not a lot of change,” says Keith Maio, president and chief executive officer of National Bank of Arizona. “For us, we’ll have to be a little more paperwork conscious.”

ASU’s Baldwin says the principal effect on large employers will be slightly higher expenses, as they absorb some of the cost of the system’s expanded coverage.

“For larger employers, the law is not going to mean a big difference, but they are going to see their costs go up,” she says.

Smaller businesses though will face new uncertainties, and, for some, significant new costs.

“I would say that there is a cloud of concern generally for small businesses,” says Maio, whose bank has many small business customers. “People who have been through the recession and are still slugging it out have learned to survive. But they still have trouble seeing how they can get back to where they were . That’s why something like the health care bill can have such an impact.”

The law offers a complex mix of incentives and penalties designed to spur employers to offer health insurance. In 2014, employers with 50 or more workers who do not provide coverage will face penalties of $2,000 or $3,000 per employee. Some employers who provide insurance and have fewer than 50 workers will be eligible for tax credits.

“In a sense there is both a carrot and a stick,” says Bradford Kirkman-Liff, professor in the School of Health Management and Policy at W. P Carey. “The idea is to create a very strong incentive to provide insurance.”

The tax credits could offset as much as half of the insurance costs for some employers, Kirkman-Liff notes.

“Arizona has a high number of small employers. Many of them don’t provide health insurance, but some do. This would give them a reason not to drop it,” he says.

The law also instructs states to establish insurance exchanges, where small employers and individuals can purchase policies from insurance companies. The exchanges are designed to bring down the cost of insurance by combining groups of buyers into large pools.

But even with government subsidies and insurance exchanges, some businesses will find the burden too large, according Maio.

“The greatest impact will be on those that employ entry-level employees,” he says. “Arizona has a lot of lower-wage businesses who won’t be able to afford to provide insurance. I think some will opt to pay the fine. Then what have you accomplished?”

Another problem that Maio sees is the 50-employee threshold for the coverage requirement. Employers with fewer than 50 can escape penalties for not providing insurance.

“Have you given them a disincentive to adding people?” he asks.

Davis at ASBA says most business owners are focused on short-term challenges and do not have a clear picture of how the law will affect them.

“For some small businesses who fit the prescribed requirements, it will help offset some of their costs,” Davis says. “For others, it simply won’t.”

State Budget Cuts Will Hit Arizona Hospitals - AZ Business Magazine Sept/Oct 2010

Despite Restoring Some Funds, State Budget Cuts Will Hit Arizona Hospitals

It was looking pretty grim at 1700 W. Washington St., as Gov. Jan Brewer and a badly splintered Arizona Legislature struggled to cobble together a state budget that would have the appearance of being balanced.

Taking a follow-the-money tactic, policymakers targeted programs such as education and health care that annually receive large sums of taxpayer dollars. The budget Brewer and Republican lawmakers put together, addressing a $3.2 billion shortfall for fiscal year 2011, sent shock waves throughout the health care community.

The Arizona Hospital and Healthcare Association (AzHHA) estimated the cuts would reduce hospital revenue by $1.15 billion in state and federal funds in FY 2011, which began July 1, and cost the overall health care community $2.7 billion. For example, the budget package eliminated coverage under the state’s Medicaid program — Arizona Health Care Cost Containment System (AHCCCS) — to 310,500 adults and children, and eliminated KidsCare, ending health care coverage for 47,000 children. KidsCare provides low-cost insurance for the children of parents who earn too much to qualify for Medicaid, but are still considered the so-called working poor.

Before the ink was dry on the bills the governor had signed, officials learned that the landmark health care reform bill passed by Congress prohibited such budget cuts under the threat of losing federal funds. So lawmakers passed another bill to restore money stripped from AHCCCS and KidsCare. Failure to have taken the follow-up action, officials said, could have cost Arizona more than $7 billion in federal money for health care.

AzHHA strongly supported the governor’s push for a temporary 1-cent sales tax increase, which voters approved by a 64 percent to 36 percent margin. The tax increase remains in effect until May 31, 2013, and is expected to generate about $3 billion over three years to protect education, public safety and health and human services from further cuts.

Despite avoiding a funding disaster, hospitals still are forced to deal with a considerable loss of government dollars. Laurie Liles, president and CEO of AzHHA, says hospitals sustained $50.1 million in cuts to the Disproportionate Share Hospital (DSH) program, which provides special funding to hospitals that treat a significant number of AHCCCS and uninsured patients. The state cut $16.7 million, resulting in a loss of $33.4 million in federal funds. The federal stimulus act of 2009 matches state dollars three-to-one for DSH, so when the state trims $1 from the program, the total loss is $4.

Hospitals also lost some $37.3 million in funding for graduate medical education, which helps pay for physician instruction programs.

“There is no funding for 2011,” Liles says. “That is a huge loss for Arizona, considering the significance of our physician shortage.”

In addition to those losses, the Legislature authorized AHCCCS to reduce all provider payments, including those to hospitals, by up to 5 percent for fiscal 2011.

“We don’t know what percentage cut that hospitals will receive,” Liles says. “Hospitals are planning on the full 5 percent, but we’re hoping it will be somewhat less.”

Since 2008, Arizona hospitals have sustained several hundred million dollars in payment cuts and freezes, which impact hospital employees — medical and non-medical, Liles says. The association has been monitoring how its member hospitals are dealing with the recession.

“We have found that hospitals are managing through a variety of ways,” Liles says, “with some staffing reductions, delays in capital construction and services to the community. Hospitals have had to make some very hard choices about services. Strategies that hospitals have been forced to employ affect all Arizonans.”

For example, Liles says, when hospitals are underpaid, either by AHCCCS or Medicare, hospitals shift those costs onto commercial health plans to make up the difference.

“We call that cost shift a hidden health care tax,” she says. “That results in higher premiums for businesses and families. We all end up paying for the cost shift that hospitals are forced to make.”

Liles, who previously was the chief lobbyist for AzHHA, says she spent a lot of time over the past few years visiting with legislators regarding the impact of the hidden health care tax.

In 2009, the Arizona Chamber Foundation, an affiliate of the Arizona Chamber of Commerce and Industry, determined that all purchasers of health care coverage pay 40 percent more for hospital care through commercial insurance as a result of underpayments from AHCCCS and Medicare, Liles says.

“We look for more of the same,” she says.

Hospitals are counting on Congress to continue funding AHCCCS at an increased level.

“We have shared our concern with our congressional delegation,” Liles says. “The enhanced federal medical assistance percentage is absolutely vital to Arizona.”

The increased funding amounts to about $480 million — money needed to cover the expanded AHCCCS population — that the state is mandated to continue covering as a result of national health care reform. Without additional federal funding, Liles wonders: “How are our Legislature and governor going to pay for that? We are concerned about the care we provide. There are only so many places our state can cut.”

By The Numbers: Health Care Cuts

  • $50.1 million in cuts to the Disproportionate Share Hospital (DSH) program
  • $37.3 million in funding for graduate medical education
  • AHCCCS can reduce all provider payments by up to 5 percent

Arizona Business Magazine Sept/Oct 2010

Marinello standing in front of a building

CEO Series: Anthony Marinello

Anthony Marinello
CEO, Mountain Vista Medical Center/IASIS Healthcare

What will be the impact of Arizona’s budget cuts on hospitals in particular and the health care industry in general?

All hospitals are going to feel the impact. There are several areas: education, economy, jobs, general medical education; and it’s just going to take a big effect on us. It’s really going to change the way we do things. But we are still going to be here to take care of our patients and give them high quality of care. The cuts this year, that just occurred in March, are going to cost several millions of dollars, which will drastically impact patient care and patient’s ability to come there. But, like we say, we’ll be open and still take care of our patients.

What will be the effect of the recently signed federal health care reform?

I think everybody agrees that we need health care reform. There’s no doubt about it. The key with this will be to continue to build and strengthen relationships with our physicians, who ultimately have the relationships with the patients. It’s so new right now, that I think everybody is trying to grab it and grasp onto what the effects are going to be. You have physicians that are nervous; you have hospitals trying to figure out what (it will mean to them). It’s going to be interesting. The key part we all really agree on is the electronic medical records, which is good for the transparency and being able to avoid duplications of testing and things like that. We are currently, at Mountain Vista, way ahead of the curve on our electronic medical records, and physicians like that. It’s a very good tool to be able to see the records from the hospital or even your office, because it’s Internet based. So it’s been very, very good for us.

We’ve heard much about the nursing shortage in Arizona. Has there been any improvement in that situation?

There will always be a need for nursing. Per se, we haven’t really seen much of a shortage here. We’ve been able to attract a lot of the new graduates coming out. IASIS as a company, since 2005, has been engaged with schools and several universities. We’ve seen about 350 students coming through, which we work with them and eventually employ them, so we have been very, very fortunate in that part. We always have people looking to become a nurse. You have certified nursing assistants that want to go to the next level, so that ability is there where we provide assistance for them.

What are the areas where Arizona’s health care industry is really excelling?

In the short time I’ve been in Arizona, where I’ve seen (the health care industry is excelling in) is education. (Arizona State University) has a health school, (University of Arizona), (NAU), A.T. Still (University), Midwestern University. And actually our facility is partnered up with Midwestern University for the medical student program for physicians, and we’re looking at what the future can be to keep education and future physicians in this area. So we are really proud to be partners with them and just continuing to grow. We just engaged in this last July, so it’s very new to us.

In these changing times, what does a C-level executive need to succeed in the health care industry?

You have to build strong relationships. You have to be a good communicator. You have to be honest. You have to be up front. If something can’t be done, you’ve got to tell it. You can’t just leave things alone. You have to be visible, high visibility. You have to be able to talk to all staff, from your environmental services person to the president of your company to every physician. It’s just very, very important to think outside the box, to listen to what people have to say, because there are a lot of people with good ideas out there. That’s something I’ve prided myself on and the team I work with and our C-level here that our doors are open, we’re always there, we want to hear, we want to listen. The relationship building has been a strength for us here.

Vital Stats: Anthony Marinello

  • Named CEO of Mountain Vista Medical Center in Mesa in 2008
  • Served as CEO of IASIS’ North Vista Hospital in North Las Vegas from 2005 to 2008
  • Served as hospital administrator for Desert Springs Hospital Medical Center in Las Vegas
  • Began career in 1979 as a hospital laboratory manager
  • Received MBA from the University of Phoenix
  • Member of the American College of Healthcare Executives
  • www.mvmedicalcenter.com
nurses, healthcare, doctors

The State’s Health Care Industry Is Strong, But The Recession Is Taking A Toll

Although I have only been in Arizona 11 years, St. Joseph’s Hospital and Medical Center has been providing high-quality care to Valley residents since 1895. And for the past century, St. Joseph’s has been known for two primary missions: Service to the poor and underserved; and outstanding care, particularly in the neurosciences, driven by groundbreaking innovation.

In the past 25 years, the innovations at St. Joseph’s have been significant, and other hospitals in the state have seen significant growth and expansion of services, as well. We have had unprecedented growth in the Metro Phoenix area, and hospitals have tried valiantly to keep up with the demand for acute care services. In the past 25 years, we have seen many new hospitals built, particularly in the suburban areas, and central hospitals have continued to expand.

Arizona was the very last state in the country to adopt a state Medicaid program in the early 1980s, but the Arizona Healthcare Cost Containment System (AHCCCS) has since been considered a national model of cost effectiveness. We missed out on substantial federal funds for the Medicaid system by being the last state to join, but we have nonetheless run an efficient system with the public dollars Arizona has received.

The health care system has continued to evolve in very interesting ways during the past quarter century. We have seen a clear movement to reduce the length of hospital stays, and many procedures are done in outpatient settings that were once only performed in hospitals.

We have made extraordinary progress in diagnostics and minimally-invasive procedures, which help people recover faster and get treated earlier when disease occurs. In a past era, patients who needed lung surgery had to have their ribcage cracked open and had weeks of extended recovery; now they have it laproscopically and are up walking around the very next day. Cancer used to be a death sentence; now it is often a chronic illness that can be virtually cured. We are better at treating chronic illnesses such as diabetes and heart disease, and we now know how important prevention is to limiting the impact of disease.

But significant challenges still remain. We have evolved into a system of “sick care” not “health care,” and although we know prevention pays dividends, that is not what physicians and hospitals are reimbursed for. The system rewards us when we treat the sickest patients, but not always for keeping them well.

In America, the concept of employer-sponsored health care is considered foundational to our economy. Yet, more than 46 million Americans do not have health insurance, and many of them are vulnerable children. In Arizona, the majority of employees work for small businesses that are under a tremendous strain to provide affordable health insurance. When people transition to public insurance, the reimbursements are declining so much that community physicians are refusing to accept new Medicaid and Medicare patients, while safety-net hospitals struggle to treat all who present themselves at their doors.

The boom-and-bust cycle is hard on the economy, but it is also hard on health care providers. We face a physician shortage in the Valley and a dearth of key sub-specialists for a region this size. In a recession, more people turn to public assistance at the same time the state is trying to cut budgets to compensate for diminished reserves.

Still, I remain hopeful for our state and our industry. Health care continues to be a strong economic engine for Arizona; good paying jobs, great career paths for a wide variety of disciplines and many avenues for innovation. Catholic Healthcare West, of which St. Joseph’s is the flagship hospital, is actively working with the new president and Congress to help shape health care reform so all Americans can have affordable and accessible health coverage. I believe there has never been a time when so much good is possible, and that change can help all of us live better.

A New Study Provides Lessons On Enhancing Hospital Board Effectiveness

A New Study Provides Lessons On Enhancing Hospital Board Effectiveness

It’s no secret that nonprofit hospitals, which account for the majority of hospitals in the U.S., are under growing scrutiny from legislators and regulators. In exchange for being exempt from paying taxes, nonprofit hospitals must provide benefits to their communities, including charity care. As health care reform efforts are beginning to get underway, an increasing emphasis has been placed on tax-exempt hospitals, and legislators are questioning the level of benefits actually provided to the local communities. At the core of this debate is how these hospitals are governed. Consequently, effective health care governance has never been more important.

So, what should health care systems be doing to maximize governance effectiveness? And what can these organizations learn from the governance practices of the most-effective community health systems?

According to a recent study, “Governance in High-Performing Community Health Systems: A report of trustee and CEO views,” which Grant Thornton co-sponsored in collaboration with the University of Iowa, College of Public Health and the American Hospital Association, there are a number of important lessons to consider. The study examines the governance of community health systems based on feedback from 123 hospital CEOs, and follow-up visits and onsite interviews with CEOs and trustees of 10 “high-performing” systems. The “high-performing” systems were selected from a set of performance and governance metrics.

Six principal factors emerged from the study as critical to effective governance at high-performing systems:

Strong values-based CEO leadership and effective management teams
Effective CEO leadership is vital to achieving and maintaining a high level of health system operating performance. Among the specific attributes mentioned by interviewees were a commitment to the system’s mission and values, excellent communication and relationships with the board and medical staff, expertise in financial management and cost controls, a passion for improving the system and its patient care, and strategic vision. They also cited the importance of a strong, effective management team with expertise in the full range of management functions.

Well understood systemwide mission, vision and values
Interviewees emphasized that key internal and external stakeholder groups must understand and support a meaningful systemwide mission statement, a compelling vision for the system’s future and a clearly stated set of core values. These expressions of organizational mission, vision and values can be powerful in unifying the stakeholders and galvanizing energy toward established goals and standards, but only if they are consistently reinforced by organizational leaders throughout the system. Interviewees also recognized that building the understanding and support of key constituencies within the system, and in the communities the system serves, requires continuous attention by the board and management.

A highly committed and engaged board of directors
Trustees commented that a highly committed, well informed and proactive governing board is extremely important to achieving and maintaining organizational success. The board should work collaboratively with the CEO and physician leadership. In addition, many board members stressed the importance of well organized and staffed board committees, the leadership role of the board chairperson and a mutually supportive relationship between the board chair and the CEO. They also noted the need for trust-based relationship between the board of directors and its CEO.

Strong clinical leadership and capabilities
The majority of interviewees underscored the need for committed, competent clinicians as a critical determinant of operational performance. They commented that without strong physician leadership, no hospital or health system can achieve enduring success. A number of interviewees also noted the importance of excellent nursing leadership. Also critical were strong, mutually beneficial partnerships between the system and physicians.

Clearly defined organizational objectives, targets and metrics
Interviewees stressed the importance of working toward well defined organizational targets and evidence-based metrics. These enable the board, management team and clinical leadership to monitor actual performance in relation to established standards in key aspects of system operations. Metrics should include the health systems’ community benefit program, financial performance and quality of patient care.

Healthy organizational culture
Interviewees frequently mentioned the importance of organizational culture. They commented that the prevailing culture within their systems included broad-based commitment to excellence in patient care and operating performance.

In addition to the importance of these six factors, there is ample room for improving board performance, particularly related to boardroom culture, board evaluations and community benefit programs. We recommend the following:

Devote time and energy to serious reflection and dialogue about the board’s fundamental role, responsibilities and the overall caliber of its performance in recent years. Then, develop a concrete strategy for creating a better, more proactive and more effective board.

Reexamine the organization’s current board size and composition. Consider adding greater racial and gender diversity, as well as respected and experienced nursing leaders as voting members. Keep in mind that large boards can be unwieldy; nine to 17 members is considered ideal.

Take a hard look at existing board-development programs. On that basis, adopt a strong commitment and a concrete plan for improving them.

Initiate an overall review of the present board evaluation process. Objectively assess the value it has provided for the organization and determine how to improve its effectiveness. Board evaluation must not be a pro forma exercise with minimal value.

Give careful attention to the boardroom culture and determine steps to make it healthier and more effective. Board members must feel free to express their views and constructively challenge each other and the system’s management team. Directors should actively engage in discourse and decision-making.

Devote attention and resources to meeting emerging benchmarks of good governance for community benefit responsibilities. Establish formal measurable policies and measurable objectives for community benefit plans, with regular reporting on the achievement of those objectives. It’s also important to collaborate with other organizations in ongoing community needs assessment and to provide thorough reports to the communities served regularly at least once per year.

Current and emerging benchmarks of good governance for nonprofit hospitals and health systems should be reviewed, refined and compiled into authoritative, consolidated documents to provide guidance for trustees and CEOs as they strive to meet these benchmarks.

With growing attention from the IRS, Congress and the media, forward-looking health care organizations are taking steps to examine their governance and identify opportunities to strengthen it. Organizations that are committed to continuous improvement not only will enhance their performance, but also improve their systems’ contributions to the communities they serve. The time has never been better to apply these lessons learned.

Rhonda Forsyth President and Chief Executive Officer John C. Lincoln Health Network

CEO Series: Rhonda Forsyth

Rhonda Forsyth
President and Chief Executive Officer
John C. Lincoln Health Network

How would you characterize the health care industry in the Valley?
When I think of health care for the Valley, for the most part we’ve been a growth industry. We have had incredible new facilities that have been built and new partners that have come into town. … But we’ve also been experiencing the downturn in the economy right now, so we are struggling like every other business, and it’s somewhat concerning. Hospitals in particular have been a safety net for our patients, for families, for our community for quite a long time and that is being threatened because of changes in the economy.

Is the health care industry recession-proof?
A lot of people think health care is recession-proof. From our perspective though, we find that we still have people coming in for services … but many people don’t have the ability to pay for their care, and that is why we’ve experienced a downturn; people can’t pay their co-pays, a lot more people are uninsured, so they still need our services and we are here to provide for them … So, I don’t think we are recession-proof. We’ve gone through changes, we’ve had to reduce expenditures, we’ve had to look very critically at some of the services that we provide and assure that they are still mission critical.

What are the major legislative and financial issues facing the Valley’s health care industry?
Well, it’s unclear right now from a legislative standpoint, both how health care reform is going to manifest itself and then on more of a local level, what’s going to happen … the (state) Senate has passed a bill that includes pretty dramatic payment cuts for hospitals, and also reduces accessibility for many people in our community. There are proposals right now to eliminate coverage for a number of children with KidsCare. So those things are really concerning. However, nothing is in its final form and we don’t know. I would just encourage our legislators and our congressmen to really look at what it is that health care provides in the community and be thoughtful about changes that are being proposed.

What are some of the new trends in health care delivery?
It’s an exciting time to be in health care. … one of the great things that has happened is really bringing biosciences and biotechnology to Arizona, and we have really benefited by having those kinds of partnerships with researchers and with some of our scientists in the community. So, when you look at health care out in the future, you really see the opportunity to treat you as a patient on much more of an individual level, so that, through biosciences, we understand you at a molecular level, rather than just say, ‘Well, you have heart disease and the standard treatment for heart disease is X, Y, Z.’ Now we’re saying … ‘We’re looking at you and molecularly this is how you will respond to this kind of drug or this kind of treatment and we know what will work and what won’t work.’

As baby boomers age, what type of competitive edge does that give local health care facilities?
It does concern me — obviously there’s opportunity — but it does concern me from the standpoint that we have people who have far more diabetes, we’re seeing more incidences of certain types of cancers and heart diseases, and many more chronic diseases. So when you look at baby boomers aging and the incidences of chronic disease, there’s opportunity in treating those people, there’s also concern about it potentially overwhelming the health care system. We’re going to need many more nurses, physicians, facilities, and we’re going to need to be smarter about how we take care of people.

How has health care evolved locally?
The most exciting thing that I’ve seen in health care in Arizona is that providers recognize … that we do a much better job of taking care of patients when we work more closely together. So a lot of our initiatives are really bringing a health care team together to look at you as a patient and say what’s going to make sense through an entire continuum of care, and make sure you get the right treatment at the right time. Also, that we work much more cooperatively with you to do preventative work.

To what do you attribute your success at the C-level?
I think I have a great passion for John C. Lincoln and a great passion for our mission. I feel so honored to come to work every day and to work for people who are really making a difference in people’s lives. … I think I’m also analytical, I like to think strategically, I try to think beyond what are the issues of today, but look to where do I want John C. Lincoln, where do I think we should be five years from now, 10 years from now. I also very much value getting the right person in the right job, and we just have some excellent, excellent people here at John C. Lincoln. While I can look to things where I really feel I’ve made a difference here at John C. Lincoln, I know I’ve done that in the context of a really fabulous team of people.

    Vital Stats





  • Appointed president and CEO of John C. Lincoln Health Network in April 2009
  • Joined the network in 1987
  • Held executive posts at both network hospitals
  • The network includes John C. Lincoln Deer Valley Hospital and John C. Lincoln North Mountain Hospital
  • Under her leadership, North Mountain Hospital was recognized for excellent patient care by U.S. News and World Report
  • Earned a Maser of Science in business administration from Arizona State University
  • Is involved with the Better Business Bureau, the Phoenix Boys Choir and the American Cancer Society