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Strategies for Hospital C-suite Organization

Philip Betbeze, for HealthLeaders Media, September 14, 2010
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We all know who holds the ultimate power in the C-suite, but what's the ideal balance of power among its other leaders? How does the boss delegate work responsibilities in his or her inner circle? What's the best way to structure executive decision-making? How do you get your top lieutenants working together as a team rather than as little tyrants lording over their healthcare fiefdoms?

While there's obviously no one set way things work, hospitals and health systems have certain practices of how the CEO gathers the best information from which to make the big decisions. However, there are usually commonalities among successful organizations, and we talked to five top CEOs from some of the best hospitals and health systems of a variety of sizes to help determine the best answers.

Creating a functional culture
Some CEOs want individual go-getters to blaze their own path through a variety of new initiatives, but most seem to favor a team-based approach to decision-making, mirroring the way many hope to organize their clinical employees into team-oriented, cohesive wholes, rather than loose collections of free agents protecting their own turf.

It's an important point, says Harris M. Nagler, MD, president at Beth Israel Medical Center in New York, because lots of healthcare systems don't really function as systems, culturally.

"We do share some elements of the IT infrastructure and an electronic order entry system that contributes to 'systemness,' and we have experienced difficulties that are not unexpected but they have been solvable in the collaborative environment within which we exist," he says.

One of the advantages of having a physician leader as a president is that Beth Israel's chief looks at himself as "the alignment" between the business and clinical sides of the organization.
"My job is to make sure that we maintain the perspective of both groups, so that they collaborate to ensure our success."

Nagler says he can use that perspective as a calling card when he has to make difficult decisions on sharing risk. Historically, the concept of sharing risk hasn't really existed in academic medical centers, he says, and so it involves new initiatives, new positions, growth strategies, and—critically—personal ownership of those risks, he says.

As a new president and CEO who took over for a 25-year veteran at Heartland Health, Mark Laney, MD, didn't want to start making cultural changes right away, before he understood how the current teams interacted at the St. Joseph, MO, 350-licensed-bed integrated delivery system.

"I wanted to spend the first six months listening and learning about the organization and not having any preconceived notions," he says. "We had a very high-performing team and one that bonded together very quickly, but I was brought in to lead the culture and strategic planning and develop an alignment with the physicians, which was not as strong as we wanted it to be."

Every CEO has to put his or her own stamp on the executive team—how they want information delivered, or how meeting-centric the culture needs to be, for example—but they all stress that taking one's time when making substantive changes in those areas is critical to long-term success. Paul Kronenberg, MD, was brought in to lead Crouse Hospital in Syracuse, NY, after it emerged from bankruptcy several years ago. He admits he leaned heavily on his lieutenants to help him figure out what was most important, but he bristles a little when a reporter calls this approach "humble."

"Perhaps leaning on them at the beginning was humble, but I like to say that I'm going to make the final decision but I need everyone's input. That input has to be with respectful disagreement," he says. "You have to create an environment that allows people to have that discussion and candor."

Does he think he's great at it?

"We continue to get better as we've worked together," he says, with humility. "We've had the current team together for 21/2 years, and I know that people embrace this approach. I think that keeps them from being so territorial."

Steven P. Johnson, president and CEO of Susquehanna Health in Williamsport, PA, values teamwork above all other attributes of his leadership team.

"What I'm looking for are individually talented people who have a strong, experienced background, but who are very good at working together," he says. "If I can't have someone with both, I'll default to a better team player."

That means finding a delicate balance of often competing personality traits, he says.

"Are they candid with each other in a constructive way? People who avoid conflict don't do well, and people who are lightning rods aren't solid either," he says. "What keeps them on the same playing field is a commitment to the mission."

Making changes to the team
Most of the hospital and health system CEOs interviewed for this story, not surprisingly, inherited their leadership team structure from a predecessor. But that doesn't mean they hesitate to put their own stamp on their team, whether that means a wholesale reorganization or tinkering with titles and personnel.

Big changes are coming for hospital revenue streams, and the ones that are able to best incorporate clinicians into leadership roles in the hospital system have an early-mover advantage as payers on both the commercial and government sides push greater coordination of care through more targeted financial incentives. But often, such changes are a longer-term initiative for a new CEO. A new leader may want to evaluate and make changes to the inner circle slowly, and with more circumspection. For Beth Israel's Nagler, who was initially hired on an interim basis before being made permanent this past spring, "the team was largely in place. In an interim role I didn't want to make draconian changes."

Still, in just the past few months, Nagler has hired a new vice president of finance. He places large trust in his chief operating officer and his chief medical officer, and has been working closely with another senior VP who traverses all those domains. Many CEOs refer to such deputies as a "chief of staff," but Nagler is reluctant to use that title, "because it denotes a sense of grandiosity about me that I'm not willing to put out there." Still, many healthcare organizations have moved to add the chief of staff title to their executive teams as a way to remove some of the bickering and influence-peddling that might subvert a team-based approach to executive decision-making.

Heartland Health's Laney is happy to delegate important functions to his team, which he thinks makes for a more integrated corporate structure.

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