CEOs are leaving hospitals and health systems in record numbers. In January, their exits hit a four-year high; by May, departures were up 70 percent from the same time period of 2022.
Industry challenges — high inflation, low reimbursement rates, staffing shortages — are undeniably widespread. But not all CEO exits can be chalked up to this. Many have years, even decades, of dealt-with dilemmas under their belt; helming a healthcare organization has always required persistence, and most chief executives are not primed to quit.
Here are five reasons why CEO exits might be flaring, drawn from trends in Becker's reported moves.
Postponed retirements
We covered over 60 CEO exits in the first half of 2023, more than one-third of which were retirements.
In news releases announcing their departures, multiple CEOs said they had considered passing the baton for years. When COVID-19 struck, long-tenured leaders put off retirement to lead their teams through one last unprecedented challenge.
The pandemic national emergency ended in May; as restrictions ease and cases no longer dominate hospital beds, CEOs are cashing in that well-deserved rest.
System combinations
Some health systems are looking to merge, pooling their resources to weather industry storms as a stronger entity. But even if two strong systems combine, there can only be one chief executive.
Sioux Falls, S.D.-based Sanford Health and Minneapolis-based Fairview Health Services are in the process of combining. James Hereford, CEO of Fairview, has already planned to step down from the joint system after one year as co-lead with Bill Gassen, CEO of Sanford — pending regulatory approval.
Similarly, St. Louis-based BJC HealthCare and Kansas City, Mo.-based Saint Luke's Health System aim to integrate by the year's end. If all goes according to plan, Melinda Estes, MD, CEO of Saint Luke's, will retire and leave Richard Liekweg, CEO of BJC, to steer the ship.
Acquisitions
Stronger health systems are also acquiring smaller ones, often as a form of rescue from financial struggle. In these cases, the CEO role can be affected as new entities take charge.
At the start of the year, Carole Peet, MSN, RN, stepped down from her role as CEO of Yakima (Wash.) Valley Memorial. The hospital had recently been acquired by Tacoma, Wash.-based MultiCare.
In June, Tiffany Murdock, DNP, MSN, resigned as CEO of Singing River Health System, which has hospitals in Ocean Springs, Pascagoula and Gulfport, Miss. Baton Rouge, La.-based Franciscan Missionaries of Our Lady Health System is expected to purchase the system by mid-July.
Family obligations
A number of CEOs who stepped down this year cited "family reasons" or chose to move closer to loved ones.
The COVID-19 pandemic recentered many Americans' focus on family matters, as exemplified by a push toward flexible work. In the fall of 2022, a survey of CEOs found that 20 percent felt they had less work-life balance than they did in 2021, with 40 percent reporting more work-related stress and anxiety.
Chief executives are not exempt from this desire for balance, but in the turbulent healthcare setting, it is harder for many to achieve.
Heading in a "different direction"
Although industry stressors aren't to blame for all CEO exits, they could be a factor for a notable few who are moving away from healthcare entirely. Leigh Sewell, a longtime hospital CEO, quit her role as president of two Bon Secours hospitals last month to become a boutique franchisee. Jeremy Ensey, CEO of St. Luke Hospital and Living Center in Marion, Kan., shared plans to resign during a May board meeting.
"It's been tiring. So [my wife] and I have talked about it, especially the last six months if I was going to do something else," Mr. Ensey said. "I don't know what that something else is. All I know is healthcare. All I know, my adult life anyway, is healthcare. But I just felt God leading me a different direction."