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E-Briefings – Volume 16, No. 1, January 2019

Welcome to The Governance Institute’s E-Briefings!


This newsletter is designed to inform you about new research and expert opinions in the area of hospital and health system governance, as well as to update you on services and events at The Governance Institute.


Click here to download the full PDF version.

Healthcare Forecast: 10 Trends (and Implications) Board Members and Senior Leaders Need to Know


Looking forward, there are several key trends emerging that will affect hospital and physician providers. Some trends represent threats, others opportunities, but all must be factored into strategic plans and boardroom discussions. This article provides a list of top issues that providers should consider this year and tips for tackling them in the boardroom.

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By Steven T. Valentine, M.P.A., Vice President of Strategic Advisory Services, and Guy M. Masters, M.P.A., Principal, Premier Inc.


Key Board Takeaways


Questions for the board to consider include:

  • What is our strategy regarding optimal size for our organization in terms of overall revenue, geographic footprint, and breadth and mix of services to offer?

  • How will we significantly differentiate ourselves relative to our competitors?

  • Where do we stand on the transition continuum of fee-for-service to value-based payment models? What is the anticipated pace of change, and what strategies do we have to protect and increase patient volume and revenues as the shift occurs?

  • Do we have appropriate strategies to continuously improve quality and patient experience?

  • What can we do to make two-sided risk and value-based payment a core competency? How can we lead in areas such as ACO/CIN and bundled payment performance with physicians as partners vs. as competitors?

  • How can we become more meaningfully engaged in the community, especially to appropriately address social determinants of health with other partners and stakeholders?

Looking forward, we see several key trends emerging that will affect hospital and physician providers. Expenses will continue to increase faster than revenue, and pressures will continue to push providers into delivering better value for the money spent. Physicians and patients will become more engaged in healthcare with both having incentives to manage costs and spending. New start-up companies, digital platforms, telehealth, and data analytics will have a more significant impact on healthcare delivery than in prior years. Hospitals and health systems will focus on new payment methods, new care models, increasing market share, driving down costs, and driving better value through improved quality outcomes and an enhanced patient experience. Some trends represent threats, others opportunities, but all must be factored into strategic plans and boardroom discussions. What follows is our list of the top issues that providers should consider this year.


1. Provider Shortages: Physicians, Nurses, and Allied Professionals


The baby boomers are finally retiring and/or cutting back on their workloads. To address the shrinking workforce, technology and automation solutions are coming to the fore. A range of companies have introduced digital tools to deliver care, such as telehealth and virtual visits that both improve access and enhance throughput. These technologies are getting an additional boost by CMS, which is starting to reimburse providers for virtual services, recognizing their potential to enhance access and reduce total costs.


In the boardroom:

  • Monitor workforce vacancies in key professional positions and ensure that attention is focused on effective recruitment and retention activities.

  • Update succession plans for key leadership positions including physicians, nurses, allied professionals, C-suite leaders, and board members.

  • Ensure that your strategic plan addresses how telehealth and digital care capabilities can improve productivity, access, throughput, and patient convenience, at a lower cost.


2. More Vertical Integration: Opportunity or Threat?


We have seen many health systems already vertically integrate into the post-acute care (PAC), ambulatory, physician practice, and health plan space, including direct contracting with employers. Non-traditional players are also vertically integrating in market-disruptive ways, such as Walgreens acquiring Humana, Amazon acquiring PillPack, CVS acquiring Aetna (in process), Apple buying medical groups, and Walmart and others opening health centers in their stores. There is a strong push for new market entrants to invade three areas: 1) providing additional and non-traditional access points, 2) integrating to reduce costs, and 3) improving convenience and the patient’s experience. There will also be more consolidation in the industry as vertical integration threatens and alters traditional referral patterns.


In the boardroom:

  • Some providers have taken a “partner” approach to new market entrants, such as contracting with Walmart and others to staff in-store clinics, or to open their own “minute” clinics in retail spaces. Assess the feasibility of non-traditional access points, relationships, and technology (telehealth) as appropriate in your market.

  • Consider selling underperforming assets or business ventures.


3. Continued (Extreme) Focus on the Consumer


As baby boomers age into Medicare and millennials begin to use healthcare more, hospitals and health systems are actively targeting the consumer and trying to create stickiness to their brand and services. Successful healthcare organizations are pursuing strategies that include a dynamic, interactive patient Web portal, “live chat” assistance online, membership clubs (discounts), apps, easy access, and direct engagement with the consumer. An essential capability will be enabled consumer access to their electronic health records to schedule appointments, pay bills, receive test results, access health articles, and learn of educational or screening opportunities. As more people sign up with high-deductible health plans, pricing and cost will impact a growing percentage of the population. While price transparency has not grown as fast as predicted and consumers have been slow to use transparency tools, employers have been taking up the slack. More employers are using this data to justify direct contracts with health systems. These deals remove third-party payers and added administrative costs from the equation, creating customized plans with high-value networks or centers of excellence for their employees to use. Not only do these networks reduce the number of non-appropriate procedures, they also compress variations in common procedure costs.


In the boardroom:

  • Ensure your organization is focusing heavily on the consumer experience, and consider the following questions:

Do we have a robust social media plan?
Do we use technology, digital tools, and processes to facilitate ease-of-access and increase patient engagement and value?
Can consumers access appointments, information, test results, take care of administrative tasks, and “comparison shop” as easily as they can rent a car, buy an airline ticket, or book a hotel?
  • Monitor what your competitors are doing in these areas and provide better consumer solutions.


4. Slowing Pace of Consolidation


While consolidation among providers will continue, the pace may be slowing, as the most advantageous targets have already been taken. In addition, research has thrown a wet blanket over the fast pace of mergers/acquisitions because the goals of lower costs, increased revenue, and scale needed to move into the value-based care/payment world, have remained elusive. Poor performers or those in bad markets will find it much harder to attract partners/buyers, which will almost certainly lead to an increasing number of bankruptcies. (We still believe that one out of 10 hospitals is at risk of closing in the next five to seven years.) Hospitals lacking critical mass or relevance in their markets will have to redefine their purpose and restructure themselves to be more of an ambulatory provider that utilizes telehealth, digital tools and apps, artificial intelligence (AI), and possibly a Federally Qualified Health Center (FQHC) or Rural Health Clinic (RHC) designation in order to capture supplemental funds needed to stay open.


In the boardroom:

  • Be vigilant in creating financial projections that model multiple scenarios including shifts in payer mix, case mix index, declines in inpatient volume, shifts to outpatient settings, increases in expenses, and other variables.

  • Develop contingency plans (including ambulatory or PAC services) to respond to changing market dynamics in advance of potential changes.

  • Engage in strategic discussions that include whether to grow, align, divest, or take other action as an integrator or integratee.

  • Determine what “control” and “independence” mean for the organization relative to the mission and future vision.


5. Growing Applications of Artificial Intelligence/Machine Learning Are Here


AI platforms will improve productivity by automating certain non-clinical tasks such as appointment scheduling and no-shows, revenue cycle, billing, claims, eligibility verification, and supply chain process. AI will also assist clinicians in improving diagnoses and the development of treatment plans. Areas attracting particular interest include diagnostic imaging, drug discovery, cancer care, risk analysis applications, and infection prevention and/or clinical decision support. These AI applications can run on cloud-based platforms (such as those offered by Google, Microsoft, Amazon, and IBM Watson). The cost of AI will start to come down over time, and major health systems and academic medical centers will increasingly be able to afford and leverage AI. Keep an eye on the four companies mentioned above and Alibaba (China) and Tencent (China).


In the boardroom:

  • Monitor developments in AI. Be willing to pilot applications that could improve operational efficiencies and patient experience.


6. Branding and Co-Branding: More to Come


Hospitals and health systems must continue to develop and refine their brand. For academic medical centers and specialty hospitals, this is their holy grail. With a strong brand, healthcare organizations are able to charge fees for clinical trial participation, access to clinical protocols, use of name, access to telehealth services, and consults and business development support. In particular, we expect name brand cancer centers will continue to co-locate in hospitals and extend their reach into a growing number of local markets. As patients get more sophisticated and discerning about where they get their care and from whom, branding will become more important. Expect specialty hospitals and academic medical centers to push hard on improving their brand, with a focus on quality outcomes and patient experience scorecards, followed by a significant effort to build reputation and name recognition.


In the boardroom:

  • Explore the potential benefits of aligning with a nationally recognized organization for high-end complex services (or, if you are one, expand your influence and the benefits you can provide to patients in other geographic markets).

  • Ensure that your strategic plan addresses “brand management” in ways that attract more volume and create brand loyalty to high-value services.


7. Value-Based Care and Payment Models Will Continue to Grow Significantly


There are now nearly 700 commercial and Medicare ACOs providing care to approximately 9.4 million beneficiaries. The CMS bundled payment initiative now has around 7,000 participants. There are approximately 42 states with Medicaid/CHIP programs that are planning patient-centered medical homes, and 27 states making medical home payments. Commercial health plans have also moved in this direction, including Anthem, Aetna, Humana, Cigna, and United Healthcare. Even some employers have directly contracted with health systems and their affiliated physicians using value-based contracts. Leadership at CMS has also stated many times that they are moving payment systems to risk-based methodologies. Moving to value-based care is no longer an option, and hospitals and health systems must prepare for new models that will require two-sided risk.


In the boardroom:

  • Focus on improving quality and the patient experience.

  • As payment and care models evolve, make sure that management adjusts operational processes, tools, and incentives to engage physicians.

  • Care model changes should align with market and payment shifts as economic risk is included in payment models.


8. Cost Reduction and Management Activities


Many organizations will see volume growth remain stagnant, at best. Market share movement is becoming more difficult than in the past. Per capita inpatient admissions are declining, and outpatient growth is being driven by payment models and economic incentives that encourage physicians to redirect business to ambulatory centers. Therefore, health systems must have standardized staffing, cost-center benchmarking, and best practice tools to assist with reducing costs. Analyzing work and patient flow to optimize resources must be a primary focus. We have also seen more aggressive moves by healthcare organizations to reduce their drug costs (greater leverage by pooling buyers, substituting generics, strict adherence to drug formularies, etc.).


Additionally, for those health systems that have clinically integrated networks (CIN), some have taken advantage of Hospital Quality and Efficiency Programs (HQEP) to align and engage physicians to reduce costs primarily through the reduction of resource use, staffing, patient and work flow, etc. These HQEP programs are a tool to provide economic incentives for physicians to reduce costs.


In the boardroom:

  • If you have a CIN and have not yet done so, explore implementing an HQEP initiative to identify key areas where physicians and the hospital can align incentives to achieve cost and quality improvement.

  • Track per-unit revenues and costs (benchmark and trend horizontally), total cost of care, contribution margin by service line, and other financial metrics to identify trends and areas of focus.


9. Declining Utilization: A Significant Trend That Continues


As more providers adopt clinical protocols and digital tools, as well as optimizing the use of allied health professionals, per capita admissions are now flat to declining for entire market areas. Instead, care is shifting from inpatient to ambulatory and home health sites of care. Lower cost sites like post-acute care providers have been effective in reducing costs and utilization. Many organizations use hospitalists, case managers, intensivists, laborists, and SNFists to effectively manage down the resource consumption, while improving quality outcomes and patient experience. Health systems should plan on continued lower overall volume and seek to have a robust strategic plan in place to gain market share and/or be an aggregator in the market to buy/merge and reduce the excess capacity in the market.


In the boardroom:

  • Monitor shifts in your inpatient use rates (as well as payer mix). Use financial scenario modeling to estimate economic impacts; use this information to adjust your cost profile and strengthen strategic marketing and growth initiatives.

  • Focus on developing new clinical care models with quality, outcomes, and economic incentives for physicians.

  • Explore alignment options with other organizations if there are perceived opportunities to grow market share, reduce duplication, and create economies of scale. Be willing to make tough choices.


10. The Genome Impact Is Arriving


Genomic information has the potential to improve healthcare outcomes, patient experience, and total costs. The proper use of genome information will require the use of electronic health care/medical records, data warehouses, AI diagnostic and treatment algorithms, and possibly integration with resources from the Precision Medicine Initiative. Early success has been identified in prenatal and newborn patients, and soon professionals expect that it will be useful with childhood and adult patients. Genomic analysis has been used as a screening tool that can more precisely characterize health conditions and improve medication and therapy selection. Expect to see children’s hospitals and academic medical centers to be leaders in this area, with some partnering with pharmaceutical companies to further advance treatments using genomic information.


In the boardroom:

  • Monitor developments as discoveries and applications of genomic science become more prevalent and beneficial. Assess potential applications, alliances, and opportunities to co-brand in these areas as appropriate.

  • As a board, be prepared to address potential ethical and other concerns that may arise.


The View Ahead: Governance Concerns and Opportunities


Governing boards will be faced with more complexity, as well as challenges and exciting opportunities that will require thoughtful consideration of non-traditional services, alliances and partnerships, decisions about allocating resources, and making choices consistent with the mission. Maintaining and strengthening alignment across all stakeholders will be essential in order for the board to meet its fiduciary duties and successfully guide the organization in this rapidly changing healthcare environment.


The Governance Institute thanks Steven T. Valentine, M.P.A., Vice President of Strategic Advisory Services at Premier Inc., and Guy M. Masters, M.P.A., Principal at Premier Inc. and Governance Institute Advisor, for contributing this article. They provide keynote presentations on trends, implications, and case studies at board retreats and conferences, and facilitate impactful strategic planning processes. They can be reached at Steve_Valentine@premierinc.com or (818) 512-0349 and Guy_Masters@premierinc.com or (818) 416-2166.



Minding the Mental Health Gap


The country’s current mental health infrastructure is struggling to meet the growing demand for psychiatric services. Meanwhile, the number of providers in the United States continues to decrease. This article provides some steps boards can take to help their communities with this challenging issue.

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By Nancy Howell Agee, President and CEO, Carilion Clinic


Key Board Takeaways


Key steps boards can take to help address mental health needs in their communities include:

  • Energize the discussion about mental health at the local level.

  • Consider innovative collaboration with dedicated providers and strong community partners (e.g., schools, social services agencies, family courts, etc.).

  • Prioritize communication and projects that aid in reducing the stigma of those with mental illness or substance use disorders.

  • Reevaluate your care delivery models, asking questions such as:

Are there interdisciplinary opportunities we need to be exploring?
Are we effectively utilizing psychiatric and mental health nurse practitioners?
Should we expand investment in areas such as telepsychiatry and teletherapy?

Nestled in Virginia’s Blue Ridge is the sole tertiary/quaternary care center serving southwest Virginia—a service area of more than 4,300 square miles. Our nationally ranked facility is a resource for nearly one million Virginians, West Virginians, and North Carolinians—many of whom will at some point in their lives have a mental health need.


Carilion Roanoke Memorial Hospital is the flagship hospital for Carilion Clinic, a not-for-profit healthcare delivery system where I am privileged to serve as President and CEO. My experience with Carilion combined with my service as board chair for the American Hospital Association in 2018 reemphasized the challenges our peers face nationwide when providing access to mental health services.


The country’s current mental health infrastructure is struggling to meet the growing demand for psychiatric services. Meanwhile, the number of providers in the United States continues to decrease. The majority of psychiatrists (59 percent) are 55 or older. If you serve your community on a hospital board, you know that the impact of inadequate access to mental health services reaches far beyond healthcare. Depression and anxiety alone lead to an estimated $1 trillion per year loss in productivity in the U.S.


We all agree we need to do something. Yet this challenge may seem insurmountable. This article provides some concrete steps boards can take to help their communities.


The Board’s Role in Addressing Mental Health Needs


As leaders in the community, I challenge board members to energize the discussion about mental health at the local level. Big problems require big solutions. Chipping away at the problem will require innovative collaboration with dedicated providers and strong community partners that share a goal of making a positive impact. Identify important community stakeholders. Start small and lead through example. Prioritize communication and projects that aid in reducing the stigma of those with mental illness or substance use disorders. By encouraging community engagement, healthcare systems can create partnerships, trust, and mutual investment in increasing capacity for local mental health resources at the environmental, educational, and organizational levels.


I also encourage boards to take a fresh look at care delivery models. Continue to incentivize psychiatry and behavioral medicine residencies for physicians, but also consider the increased role of psychiatric and mental health nurse practitioners and appropriately trained physician assistants. Look for interdisciplinary opportunities, increasing collaborative and integrative care between primary care and behavioral health. Expand investments in telepsychiatry and teletherapy. Take these opportunities to be nimble in a time when there are limits to the traditional psychiatry workforce. And when you find something that works for your organization, share those lessons learned with your peers and continue the discussion.


Partnering for Success


Whatever you decide to do, know that you cannot do it alone. Hospitals and health systems will need strong internal and external partners. Here are a few ways providers and leaders can partner to address mental health needs:

  • Partner with school systems by embedding nurses, social workers, and psychologists in primary care settings at or near schools.

  • Explore formal educational partnerships with local school systems. For instance, we are working with elementary school students on a new mindfulness curriculum.

  • Partner with social services agencies to address the social determinants that contribute to trauma, abuse, and neglect.

  • Provide alternatives to police intervention and arrest.

  • Work with family courts to address mental health issues and divert children from justice involvement.

  • Expand the role of peer recovery specialists that empower those with a lived experience of mental illness or substance abuse a pathway to recovery and community reengagement.

One particularly successful approach Carilion has taken recently is also one of the most inspiring to me. The sheer number of individuals suffering from substance use disorder can be daunting. For us, a ray of hope appeared in our peer recovery specialist program.


Let me introduce you to a young woman I’ll call Sarah. Sarah is just 28 years old, but her mental health journey has already inspired a culture shift in our organization. In college, Sarah fought to conceal depression, anxiety, and an eating disorder that she had struggled with from a young age. She always felt like the outsider, not fully understanding how to cope until she was introduced to a campus support group for students. For the first time, she was able to share her challenges with peers and recognize that others were experiencing similar struggles.


A lightbulb went off. Her passion to help others with mental health needs moved her to approach me with the idea to create a program that would train peer recovery specialists to help patients struggling with mental illness and substance use disorder. I was sold.


In her short time with Carilion, Sarah has kickstarted our peer recovery specialist program (the first in the Commonwealth of Virginia), training 42 individuals recovering from substance use disorder to offer emotional support to patients still tackling similar challenges. This coming year, we plan to hire some of Sarah’s trainees. Others who have gone through her program still volunteer their time as a way to continue their own recovery.


As a true testament to the work that Sarah and her colleagues do, staff have informally renamed the hospital unit where the peer recovery specialists work the “hope floor.”


Yes, your job as a hospital board member is to ensure your organization can continue to provide the best medical care possible to your community. When it comes to mental health, though, make sure you inject some hope in the community, like Sarah, in part, has done for us.


The Governance Institute thanks Nancy Howell Agee, President and CEO, Carilion Clinic, for contributing this article. She can be reached at nhagee@carilionclinic.org.



Philanthropy as an Imperative Revenue Stream: Strategic Planning and Design


Philanthropy can be the key to a strong hospital, securing a competitive advantage and spurring growth. This article explains how boards can fuel and steer their hospital’s philanthropic success in many ways—not only by giving or getting funds themselves, but by influencing organizational culture, priorities, and resource allocation in ways that position philanthropy as a significant, valued revenue source.

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By Bill Mountcastle, President, Health Giving


Key Board Takeaways


10 Ways Board Members Can Support Philanthropy Strategic Planning

No single approach to philanthropic strategic planning works for every organization. As a board member, you have choices of how involved you (and the rest of the board) will be. Making smart decisions can help to ensure the philanthropy strategic plan’s success. The board should:


Set the vision.
Authorize a budget.
Ask for internal and external research and benchmarks.
Support the creation of a philanthropic case for support.
Set a logical timeline.
Understand the hospital’s supporter base.
Foster the creation of philanthropy goals, strategies, and key performance areas.
Help identify superstar volunteers, supporters, and philanthropists.
Govern and lead and don’t micromanage.
Monitor and revise.

Pennsylvania Hospital—our nation’s first—was founded in 1751 by Dr. Thomas Bond and Benjamin Franklin, two inventive, strategic thinkers. Building it, however, wouldn’t have been possible without Franklin’s ability to inspire community philanthropy, convincing private citizens of Philadelphia to invest the 2,000 pounds needed to make it happen.


Today, philanthropy still funds hospital construction, but it also helps alleviate narrow profit margins, squeezed by low reimbursement rates, among other industry challenges. It can strengthen the bottom line, and, in an ever-changing healthcare environment, philanthropy is becoming more important than ever before.


Philanthropy can be the key to a strong hospital, securing a competitive advantage and spurring growth. Plus, it has an admirable ROI. The Association for Healthcare Philanthropy reports that it costs hospital foundations only 31 cents to raise a dollar, while Moody’s Investors Service officials say it costs hospitals themselves 97 cents to raise a dollar.


Most importantly, however, philanthropic investment can transform an institution by funding expansion and renovation projects, critical treatments and healthcare services, investment in new service lines, innovative technology applications, patient care facility renovations, and nursing excellence. It might fund endowments for key positions, a factor in attracting and retaining key clinical leaders. It can be a source of unrestricted funds, empowering leadership to make immediate impact, when and where the need is greatest. Most significantly, philanthropy can ensure the hospital’s ability to deliver community benefits, such as charity care and community health education, not to mention offsetting unreimbursed costs of care for the most vulnerable patients.


But successful philanthropy programs don’t just happen on their own. They require alignment and shared focus across all levels of the organization’s leadership.


Most hospitals and health systems have separate philanthropic foundations led by separate boards—others may have only a governing board with a designated philanthropy committee or fund development committee. Regardless of structure, these volunteer governance leaders must understand their roles in maximizing philanthropy’s benefits to the hospital or health system and the communities it serves.


Boards can fuel and steer their hospital’s philanthropic success in many ways—not only by giving or getting funds themselves, but by influencing organizational culture, priorities, and resource allocation in ways that position philanthropy as a significant, valued revenue source. Philanthropy has always been an imperative revenue stream for America’s non-profit hospitals and health systems, and leaders must tend to it thoughtfully if they wish to see it thrive.


Know Your Role as Board Leader


The board’s role in philanthropy includes strategic planning to set the hospital’s fundraising goals, and to specify parameters for conduct within which the managers will operate. As a board member, you must be highly vested in the hospital or health system’s work, as well as in its mission. You serve as a steward of the organization’s advancement. Not only should you make a personally significant financial contribution, you should also set the tone for an organization-wide culture that supports philanthropy.


The board needs to remain focused on philanthropic revenue targets, not fundraising tactics. In other words, the board should keep an eye on anticipated outputs, rather than operational strategies. It’s critical to consider philanthropy as an important, indispensable source of revenue, and challenge the organization’s capacity to fundraise.


Once a philanthropy strategic plan has been approved, board members should monitor performance against the plan’s benchmarks. Review progress regularly, and actively discuss performance metrics with the CEO and the fundraising management team.


Board members are responsible for establishing the organization’s mission and driving its fulfillment. You must ensure that the strategy is grounded in and consistent with the mission. It’s up to the board to drive the organization to accomplish the vision it describes.


Understand the Philanthropic Strategic Planning Process


As a board member, your understanding of the philanthropy strategic planning process and how you can most effectively participate is a tremendous asset. The more familiar you are with your role in the planning process, the better prepared you are to guide the hospital toward achieving success.


Adhere to an Organized, Systematic Approach


Since an organization-wide philanthropy strategic plan is important for successful, efficient fundraising, an organized, systematic approach is crucial. You must understand and navigate the organization’s future possibilities and uncertainties. The process should consider measurable outcomes, policies, and resource requirements. It demands commitments of time and talent from the CEO, the board, and other stakeholders invested in the process. It looks several years ahead, at both tangible goals and measurable objectives. It takes time, effort, and thought to build, and usually accounts for all philanthropy activity that takes place over three to five years.


Build Confidence


A philanthropy strategic plan signifies to donors that your hospital or health system is forward-thinking. It demonstrates that you are visionary in your approach to philanthropy and shows you have what it takes to succeed. It builds confidence in the philanthropy program and gains respect from sophisticated prospects and other influencers.


Donors prefer philanthropy offices that focus on the future, working toward measurable goals and sustainable programs. Reasonably, sophisticated philanthropists and foundations are often wary of hospitals and health systems that do not have a strong philanthropy plan. They want to know that their investment will be spent wisely but just as importantly, that the organization is going to survive for the long-term.


Follow an Essential Road Map


A philanthropy strategic plan is an essential road map that provides a planned route to achieving the mission and the vision of the hospital or health system. This road map:

  • Helps you evaluate the present environment and the organization’s position within it, and then craft a plan to achieve defined success.

  • Ensures you have the right resources in place, from financial to human, to manage fundraising operations effectively.

  • Considers the policies and procedures that ensure the hospital’s fundraising is run according to its values, while succession planning and risk evaluation help you to manage the unexpected.

  • Helps align fundraising strategy and strategic development.

  • Leads to integration between philanthropy and organizational direction, ultimately leading to better results.


Take a Step-by-Step Process to Financial Goals


An organization-wide philanthropy strategic plan determines your exact goals and targets, plans out your methods, and creates a deliberate step-by-step process to achieve financial goals. It outlines what your team will be doing, when they will do it, and what results they expect to create. It takes the guessing game out of philanthropic revenue.


Be Proactive


A philanthropy strategic plan keeps the hospital and philanthropy team out of crisis mode. It makes your organization proactive by initiating deliberate fundraising strategies with carefully thought-out steps. A philanthropy strategic plan:

  • Alerts the hospital to risks associated with external and internal environmental forces and demands that the organization intimately understands—and clearly articulates—its opportunities.

  • Clarifies why philanthropy is critical to the mission and clarifies your audience.

  • Allows you to ask important questions such as, “Why are we doing it this way?” and “Should we be investing our time here, or not?”

  • Enables your team to follow best practices, rather than rushing and hoping for the best.

  • Prevents distractions, such as new “pop-up” fundraising ideas being offered by well-meaning leaders and volunteers.

  • Helps leaders understand the wisdom of keeping on a planned course while shifting the hospital from being reactive to proactive.

With a plan in place, professional philanthropic fundraising staff will be empowered to execute the strategy that everyone’s already agreed upon.


Stay Dedicated to Strategy


Without a philanthropy strategic plan, the hospital or health system risks appearing to be rudderless when it comes to fundraising. As a board member, don’t pass up this opportunity to gain an understanding of your organization’s philanthropic priorities and what role you can play in moving the work forward. A plan brings focus to board meetings and gets the board on the same page regarding direction and philanthropic priorities while building a sense of teamwork along the way. Developing a philanthropy strategic plan captures the synergy of various and diverse stakeholder insights and opinions.


Nurture a Culture That Embraces Philanthropy


As a board member, you need to create and nurture a culture that welcomes and embraces philanthropy and the opportunities it offers. The philanthropy strategic plan must be accepted and utilized as a strategic asset. Allot adequate time on board meeting agendas to discuss philanthropy, its strategic plan, and emerging trends, issues, and challenges that could impact philanthropic investment from individuals, grateful patients, foundations, businesses, and the community.


Finally, board members should be inventive, strategic thinkers. Benjamin Franklin once said, “By failing to prepare, you are preparing to fail.” Board members play a unique and important role in the philanthropy strategic planning process, and in its ongoing success. Board members are leaders, motivators, and catalysts. They should govern, lead, and guide the philanthropy strategic plan—not create or manage it—but to do so, they must understand the basic concepts of philanthropic strategic planning and become familiar with the process. Board members should bring their unique perspectives to the table and initiate the philanthropy strategic planning process with the organization’s management to secure the survival and future success of the hospital’s mission. At the end of the day, the hospital’s philanthropy strategic plan will only be as strategic as you, as a board member, and your hospital makes it.


The Governance Institute thanks Bill Mountcastle, President, Health Giving, for contributing this article. He can be reached at wmountcastle@health-giving.com. Mr. Mountcastle will be speaking at our January Leadership Conference on the same topic on Monday, January 21, 2019, from 1:00 –2:30 P.M.



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