Healthcare Reform Creates More Slots in the C-Suite

Nobody had ever heard of a hospital having a chief experience officer until just a few years ago. Now qualified clinician-executives are at a premium. So are chief strategy officers, familiar in other industries, but new to healthcare and hospital administration.

Healthcare reform and its many permutations are creating new and more specialized leadership roles into the C suite.

Nobody had ever heard of a chief experience officer until Cleveland Clinic coined the phrase just a few years ago. Now qualified clinician-executive candidates for the post are in high demand, says Travis Singleton, senior vice president at Irving, TX-based physician recruiters Merritt Hawkins.

"It's an example of a provider executive that didn't exist two years ago [or] maybe even one year ago, and now it is one of the best paid, most common, and popular executive positions—and necessary—in this new environment," Singleton says.

"Those infrastructure C-level positions get more into the profit center management and it's highly complex. You may have had a large health system two and three years ago, but it only employed 10% to 15% of physicians, whereas now they can employ 70% to 100% of physicians. That brings on a whole other realm of experience, management oversight, compliance, and integration."

Singleton says the chief experience officer looks at hospital operations "through the patients' eyes," managing flow and care contact points.

"They are going to be centered around things like patient satisfaction and HCAHPS scores," he says. "For example, these large academic medical centers are grappling with the fact that nobody wants to drive 45 minutes into town, spend 20 minutes parking, go through the maze of hallways and floors when you can be seen in a tertiary or regional type system. They are competing now for that experience."

In addition, these chief experience officers are dealing with healthcare metrics in the age of transparency with the government, the public, and competitors.

"You have this information so readily accessible and so open—at least it will be—as far as what these patients are encountering," Singleton says. "I know we are only at 1% but that is soon going to rise to 3% on readmissions. These are real dollars now. These are potentially tens if not hundreds of millions of dollars that these health systems will face. You not only need an executive in place to manage the process, you also need someone with provider experience, management experience, and infrastructure experience. All of those things."

Physicians First
Right now qualified chief experience officers are at a premium, and Singleton says he doesn't see that changing anytime soon. So, where are these new chief experience officers coming from?

"There is a renaissance of physician leadership we have seen over the last two or three years," Singleton says. "It used to be a small segment of the market with providers that usually came up through academia. They were usually deans and vice chairs and they would go on to manage health systems in some cases. The other cases would be physicians who worked their way up."

"Now we see physicians who understand the need for additional schooling," he says. "They are going back to get their MBA, their MHA. They are going to get specialized training on how to run these clinical networks. They are going through apprenticeships. There are now career tracks that are almost explicitly nonclinical that these physicians are recognizing. There is more of a systematic way to prepare them for it. It's a growing candidate segment, but I would be lying if I said there are enough of them out there. There aren't. They are hard to find."

Revenue Finders Wanted
Another up-and-coming C-suite title in healthcare is the chief strategy officer. That position has been around for decades in other industries, but has only recently gained a broader beachhead in healthcare and hospital administration.

Rachel Polhemus, a senior partner at the executive search firm Witt/Kieffer, says CSOs are rapidly becoming key players at the highest levels of hospital leadership as health systems become more complex and competitive. "You are not getting the same types of revenues you once did on fee-for-service model in a bricks-and-mortar hospital setting," Polhemus says.

"Finding new ways of generating additional revenue is a huge factor. If it's no longer about bricks and mortar, maybe it's about building a physician enterprise, or a post-acute care service line, or affiliations and joint ventures, staying competitive, having that market advantage over your competition, and looking at the health plan side of things, the risk side of things, and driving innovation."

Polhemus says many of the CSO are coming to healthcare from outside industries and are not afraid to challenge basic assumptions and standard operating procedures. "They have much more of a for-profit mindset as far as what is true strategy," she says.

"They don't understand healthcare and so they are able to ask questions and poke holes and look at things differently where healthcare leaders traditionally have not."

Polhemus says C-suite status is critical for the success of a strategy executive. "They should be the CEO's right-hand person because together they are helping to drive innovation and growth and where the organization is going in the future," she says. "So to be a few layers down wouldn't have that influence."

Experience Matters
Chief experience officers usually have a clinical background, which winnows the selection process considerably. However, Polhemus says many CSOs come are MBAs and MPHs who come with backgrounds in consulting.

"But it's not necessarily about the credentials or education. It's about the experiences they have had and the organizations they have been a part of and whether or not the organization they are looking to move to values what knowledge and skills and experience they have," she says.