Leaders are supposed to navigate their organizations through tumultuous times, build alliances with physicians and other providers, improve quality and cost efficiency, and serve patients better. Where have the loyalty and commitment gone?
In one way, the news that hospital CEO turnover reached a staggering 20 percent in 2013 comes as little surprise. The data from the American College of Healthcare Executives showed the "churn rate" for hospitals CEOs last year was the highest since the ACHE began tracking turnover in 1981, but in fact it's a continuation of an upward spike in the past couple of years.
With the need to provide value under reform, new competition from retail clinics, the rise of high-deductible health coverage, tough regulations on meaningful use and ICD-10, and more-aggressive anti-fraud programs, the CEO post is a pressure cooker.
That's all true, but I and a number of other observers think the data reflect a lack of will and commitment. Faced with a once-in-a-lifetime opportunity to overcome the siloes, inefficiencies and quality problems plaguing American hospitals, more and more CEOs are making a beeline for the exit, hefty retirement packages in arm.
Deborah Bowen, the head of the ACHE, sees a complex mix of factors behind the turnover numbers. CEOs leave for better jobs, retirement, because of hospital sales or involuntarily when boards see the need for change. All are certainly a factor, but hardly explain the surge of the past few years.
Bowen admits that "there is a lot going on in the industry right now," and some executives might not have the enthusiasm to contend with all this change.
A friend of mine who runs one of our nation's leading health systems, puts it much more bluntly: "A lot of [CEOs] have been living off the fat of the land for many years, and now that they have run into some flak they are opting to take their substantial retirement packages and run for the hills."
Another friend, who runs a top healthcare consulting firm, put it somewhat differently a year or so ago: "For many people who make CEO of a hospital or system, it is like winning the lottery. You make a half million or much more a year, way more than you thought you could ever make. You spend your career thinking, 'Why rock the boat when this is so good?' The problem is, the boat is being rocked from the outside, and most are unprepared to handle this much change and adversity."
Whether those statements are completely fair or not I leave to the reader to decide, but I do look at the ACHE report with profound disappointment. Leaders are supposed to navigate their organizations through tumultuous times, build alliances with physicians and other providers, improve quality and cost efficiency, and serve patients better. Where have the loyalty and commitment gone?
Over the years I have know the giants of the industry, people such as Bob Cathcart, who served Pennsylvania Hospital in Philadelphia from 1949 to 1991, rising to CEO and providing unwavering commitment to the charitable mission; Bernie Lachner, the talented and sophisticated CEO who led Evanston Hospital on the North Shore of Chicago to prominence over several decades; Jim Varnum, who served as president of Mary Hitchcock Memorial Hospital in Hanover, N.H., from 1978 until his retirement in 2006 and founded and led the Dartmouth-Hitchcock Alliance from 1983 to 2006; and Steve Reynolds, who joined Baptist Memorial Health Care in Tennessee as an administrative resident in 1971 and worked his way up to become president and CEO in 1994 (he’s still there).
These men have shown a passion for this industry and reveled in the challenges they faced in order to grow their institutions and make them some of the finest hospitals in the world. They were very conscious of their roles and they all seemed to exude a humility about their service to the patients they served.
Maybe those were less complicated times, and maybe the challenges are fundamentally different today. And yet, that doesn't explain why other CEOs aren't shrinking from the challenge. I know many fine leaders who are on the forefront of change, taking risks and forging new alliances across the continuum of care. Toby Cosgrove is building a national healthcare alliance through the Cleveland Clinic. Glenn Steele, not content with Geisinger Health System being a national healthcare quality pioneer, is forging a new organization with AtlantiCare. Dan Wolterman has committed Memorial Hermann Health System to eliminate medical errors and win on quality.
We need more leaders like them, people with fortitude, who are willing to take risks, who want to be ahead of the curve and make things happen, who see opportunity when others see roadblocks, who truly care about patients and their communities.
To anyone running a healthcare organization, I say: This is your time, make the most of it! You always wanted to be a leader, and right now your industry needs you to act like one. This is not a time for cowardice, nor is it a time to sit still and wait to see which way the wind is blowing. This is the chance to stay the course and improve healthcare for generations to come. Be a part of it, or end your days wishing you had.