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I Have to Learn This, Too?

Molly Rowe, for HealthLeaders Magazine, March 13, 2008
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Why healthcare executives major in leadership and minor in everything else.

Brian Keeley is an expert in property insurance, real estate and affordable housing, but he's never been to insurance broker school or received his real estate license. He's a healthcare system chief executive officer--which means he specializes in just about everything. Most senior leaders will tell you that running a healthcare system or hospital is a job that can't be learned from a book or a class. Sure, it helps to have a business degree or past clinical experience. But the traditional master's in healthcare administration does little to prepare today's CEOs for issues like housing shortages, physician contracting and union disputes. To effectively lead in today's healthcare landscape, the typical administrator--if there is such a person--must be an expert in dozens of specialties. And in most cases, that expertise is gained not through schooling, but through often painful experience.

Specialty No. 1: Insurance and real estate

After Hurricane Andrew hit Florida in 1992, property insurance premiums soared, and healthcare systems like Baptist Health South Florida suddenly faced multimillion-dollar insurance deductibles. "I looked at the paper in front of me and said, 'Where's the insurance? I don't see any insurance here.' The economic base was such that it didn't make any sense to insure . there's no economic basis for us to go out and pay these outrageous rates for minimal coverage," says Keeley, Baptist's president and CEO.

After a crash course in captive insurance, Keeley and his team found it was more affordable to form Baptist's own insurance company and self-insure the system's five Miami-based hospitals rather than go outside for windstorm insurance. They also formed their own malpractice insurance company to provide affordable insurance to Baptist's physicians.

When Baptist's leadership decided to beef up their facilities to prevent future hurricane damage, Keeley had to educate himself in yet another field: construction. The system formed a construction division with 50 full-time people rather than use general contractors to tackle the billion-dollar building project. And in an effort to offset Miami's affordable housing shortage, Keeley also added "real estate brokerage" to Baptist's umbrella. Keeley's senior staff includes two licensed real estate brokers, which enables Baptist to purchase housing at wholesale prices (without paying commissions) and offer affordable housing to staff.

Specialty No. 2: System leadership

When Keeley entered the field of healthcare, the term "healthcare system" was virtually unknown. Most facilities were standalone hospitals, and their executives were standalone leaders, managing daily operations, relationships with medical staff, and answering to the board on a quarterly basis.

When hospitals began consolidating into systems in the 1980s, once standalone hospitals became part of large systems--and once independent CEOs reported to system CEOs or became heads of multiple institutions overnight.

"I evolved from a hospital CEO to a system CEO. That is, in my estimation very, very profound. It's a big leap going from running a hospital to running a system," says Keeley. System CEOs must manage more staff, more physicians, and a larger supply chain. In some cases, they work with multiple boards. And where Keeley once spent his days worrying about the day-to-day crises at one hospital, he now focuses on long-range capital and strategic decisions for five facilities, each with a unique set of needs and challenges. All of these responsibilities leave less time for interaction with the medical staff or clinical affairs.

Specialty No. 3: Sociology

The move from hospital CEO to system CEO means more than just a change in leadership focus. It means a lot more red tape.

"When you're in an individual hospital, it's much more hierarchical. You're the boss, and everybody there pretty much understands that. You can push hard to get things done," says Warren Green, president and CEO of LifeBridge Health, a three-hospital system in Baltimore. Not so in systems. What were once quick decisions are suddenly reviewable by multiple leaders and boards. A system CEO must navigate multiple stakeholders while ensuring the process is as efficient as possible.

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