# Presentation: 919950

## Rural Hospital Networks: Stability and Growth in Challenging Times

- Larry Clifford
- Rural Wisconsin Health Cooperative
- GHPC Technical Assistance Call
- March 21, 2007

## Rural Wisconsin Health Cooperative

- Incorporated in 1979
- Owned and operated  by 31 diversified rural hospitals (in aggregate $500 M; 2,000 hospital & nursing home beds)
- 16 independent, 5 outside managed, 8 system/affiliate
- $5M budget (90% fees from services, 3 dues, 7% grants)

## RWHC Vision & Mission 

**Vision (Our Ideal) **The Rural Wisconsin Health Cooperative (RWHC), begun in 1979, supports and enhances rural health and quality of care. RWHC is a strong, innovative and mutually supportive network of hospitals with diversified services who combine their strengths to meet local community health needs through advocacy and high value products and services.
**Mission (Our Approach) **RWHC will continue to be a member owned and operated cooperative that serves rural Wisconsin hospitals in a number of basic ways - (1) local and national advocacy for rural health (2) clinical/management products and services tailored to the needs of individual Members and (3) collaborative managed care & other insurer contracting.

## Benefits of Membership

- Local/national advocacy
- Networking opportunities
- Shared programs and services
- Collaboration

## Founding Principle: Strength in Numbers

## Networks AreBuilt on Relationships

- Make Yourself a Partner Who Can Be Trusted
- Respect the Need to Effect One's Own Future
- Involve All in the Planning Process
- Assure All Participants Know They Are Needed
- Share Your Big Picture
- Agree on Methods of Accountability Up Front
- Assure that a Fair System of Arbitration is Available
- Participation Must Makes Sense

## Strategic Networking Requires Ongoing Art & Science

**Strategic Networking Requires Ongoing Art & Science**

**Listen**

**Promote**

**Produce**

**Adjust**

**Value**

- Strategy:
- “The art and science of employing the political, economic and psychological forces of a group to afford the maximum support to adopted policies.”

## Belief #1:Not Every Group Is a Network

- A rural health network has a written agreement that defines the roles and responsibilities of the members and the purposes of the network
- It performs collaborative activities according to an explicit plan of action
- It is not owned or controlled by one entity

## Belief #2:It’s About Entrepreneurship

- Rural networks have attracted significant government, foundation and local investments of time and money
- But network development is an entrepreneurial activity and as such success is not certain. The odds can be increased if all participants understand that networks are businesses, albeit typically “non-profit”
- A key responsibility is to NOT become a small business startup that closes after running through its initial grant or capital

## Belief #3:Rural Networks Are Advocates

- Networks are well positioned to advocate for their communities in both private and public sectors
- The governance and management of advocacy and shared services use the same organizational structure and skill sets
- Advocacy, particularly around a common threat, is a powerful glue that can hold a network together
- Advocacy is both external and internal; network leaders, while subordinate to their board also have the obligation to challenge the board with information and expectations from the “outside”

## Belief #4:Sustainability Starts Yesterday 

- Need to achieve a basic level of financial stability
- Sustainability is more than one of those annoying              questions at the end of most grant applications
- Good strategic and business planning is fundamental
- ALL network decisions must include consideration of how they will help the network achieve financial stability

## Belief #5:Leadership Must Be Developed

- Most administrators have little experience/training regarding leadership within the network context
- “Typical” administrative responses frequently come out of traditions that may be inconsistent with those needed to support networking
- Collaborative processes require more time up front to build trust
- Enlightened self-interest is necessary for members to begin and continue working together

## Communication as a Core Competency

- Everyone Participates, No One Person Dominates
- Listen As An Ally–Work To Understand Before Evaluating
- An Individual’s Silence Will Be Interpreted As Agreement
- Assume Positive Intent First When Things Go Wrong
- Minimize Interruptions And Side Conversations

## Board Agenda: Explicit & Growth Focused

## External Relationships Embedded in Board Agenda

- American Hospital Association
- Area Health Education Centers
- Bioterrorism Preparedness Advisory Committee
- CAH Coalition Committee
- La Crosse Medical Health Science Consortium
- National Rural Health Association
- Rural Health Development Council

- WI Hospital Association
- WI Health & Educational Facilities Authority
- WI Academy of Family Physicians
- WI Association of Homes and Services for the Aging
- Wisconsin Council on Long Term Care Reform
- WI Primary Care Association
- WI Quality Steering Com.

## Communication Requires Planning & Follow Through

| Frequency | Examples |  |  |
| --- | --- | --- | --- |
| Annual | Satisfaction Survey/Needs Assessment |  |  |
| Quarterly | Strategic Plan/Balanced Scorecard |  |  |
| Monthly | Roundtables/Other Meetings |  |  |
| “    ” | Newsletter |  |  |
| Ongoing | Staff-to-Member Phone/Email  |  |  |
|  “    ” | RWHC Web Site |  |  |
|  “    ” |  |  |  |
|  | 3rd Party Word Of Mouth |  |  |

## Strategic Plan:Accountability to Network Board

## RWHC Balanced Scorecard Helps Us Focus 

- _Financial/Business_
- What we must do to achieve vision?
- Profit Margin Variance
- Days in Accounts Receivable
- Non-Member Revenue
- Advocacy Strategic Objectives Met
- _Customer_
- What must we do for our customer?
- NCQA Credentialing Satisfaction
- RWHC Roundtable Satisfaction
- Wide Area Network Usage

- _Internal_
- How will we do it, internal focus?
- Member CEO Participation
- Operational Strategic Objectives Met
- _Investment_
- What investments/learning must occur?
- Staff Satisfaction
- Staff Training
- Staff Annual Reviews

## RWHC Balanced Scorecard

## 
Discovered by accident but now at core of RWHC Mission
External Credibility
Similar Infrastructure
Shared Services Profits Contribute to Operating Margin
Shared Services Informs Advocacy
Advocacy Needs to Be Data Driven
RWHC “Brand Familiarity” Translates from Advocacy to Services to Non-Members
Advocacy Is Not Just Political—Also With Private Payers 

- Discovered by accident but now at core of RWHC Mission
- External Credibility
- Similar Infrastructure
- Shared Services Profits Contribute to Operating Margin
- Shared Services Informs Advocacy
- Advocacy Needs to Be Data Driven
- RWHC “Brand Familiarity” Translates from Advocacy to Services to Non-Members
- Advocacy Is Not Just Political—Also With Private Payers

** ****Advocacy & Shared Services**** Support Each Other**

## Seek A Mixed Portfolio of Developing Services

- Green: _Low_ risk, _high_ value added products/services.
- Yellow; _Low_ risk, _low_ value added products/services help maintain network member interest in the short run and _high_ risk, _high_ value added initiatives are needed to provide substantive value over the long run.
- Red: No starter.

## Network Services:General Principles

- Network goals frequently satisfied by shared services
- They must produce real member benefit
- Member and “network” perspectives may differ
- They are shaped by the environment (market, technology, member proximity and relationships)
- Successful services help to build trust to build service
- The decision to offer a service and the decision to use a service are determined by financial & other criteria
- More complex services require more complex structures
- Shared services increase network cohesion

## Network Services: Basic Planning Questions

- What are key areas which determine network success?
- How attractive is the opportunity?
- What is the payoff for the network, for the members, for the communities?
- What is the timeframe?
- Chances of success?
- What are the risks? Are they acceptable?

## Network Services: More Than One Way to Skin Cat

- Contract with a vendor
- Create and manage a joint venture (include hiring staff) among some or all members to share service
- Coordinate a shared service that is owned by a member or members
- Negotiate terms of a master contract with vendors for members to sign bilaterally with vendors