Healthcare consolidation is eliminating many hospital CEO jobs. With coordination and cooperation within health system operations the order of the day, those top executive jobs are being sharply redefined.
What's your expiration date?
If you're a hospital or health system CEO, it might be sooner than you think. That's because healthcare leadership is flattening in lots of ways. Where a multi-state hospital system once may have had a CEO for each hospital in its portfolio, that's not always the case anymore.
Many organizations are selecting presidents that oversee many hospitals in a given region, for example. Even if they do maintain a strictly local CEO, those people are often no longer rulers of their own kingdom. They've always taken some marching orders from corporate, but with coordination and cooperation within operations the order of the day, their roles are transitioning.
Presidents might instead be more focused on the public face of the organization, and in getting the pieces that make up the local health system to work together. But they're no longer the boss of the chief medical officer or even the maintenance staff. Those bosses are at corporate, and the CEO is there to make sure they work together.
It's a role shift many CEOs might welcome. One told me recently that he was energized by the fact that his role has moved more toward building relationships locally and away from perusing revenue cycle reports on a daily or weekly basis.
Much of this comes from the idea of developing a sense of "systemness"—that local CEOs are no longer free to run their organizations as though they are independent franchises.
As CEO of a hospital in such an organization, you may not be able to go off the reservation and use your own consultants or implement your own patient management system, or even hire your own chief nursing officer. You'll need to work much more closely with your peers and with corporate on local strategies.
And you might not even be called the CEO anymore. After all, it's confusing to outsiders if the corporate head shares your title. How's that for a shocker?
Couple the continuing development of systemness with the expected shrinkage of hospitals in general, and independent hospitals specifically, and you have the recipe for a diminished market for hospital and health system CEOs, at least CEOs as we're used to defining the job. The problem is that much of the data needed to confirm trends—outside of anecdotal evidence—is four to five years old, says Deborah Bowen, president of the American College of Healthcare Executives.
"There isn't a lot of good data about this, so what we've got right now are frankly a lot of assumptions and perspectives that may or may not be true," she says.
Still, some trends among executive leadership seem locked in, at least for now.
For instance, a lot of emphasis within systems is directed at cultivating clinical leadership to work hand-in-hand with CEOs and other senior leaders within hospitals and health systems. That's a big shift. Though these folks might lead locally in tandem, their respective bosses are both off-site.
A lot of this change results from the convergence of running the business and managing patient outcomes, which have until recently been two very separate goals—important in their own way, but not dependent on each other's success. And let's be honest: patient outcomes really weren't the hospital's or the health system's worry—at least they didn't directly affect revenues or margin. That's rapidly changing too.
"It's true that the transformation of care has driven leadership further into the organization," says Bowen. "That's why you see more conversations about developing clinical leaders and making them more accountable to outcomes and safety on the front lines."
But, she cautions, just because we may see fewer people with the CEO title in the future, doesn't mean that the requirement for good leaders will be diminished in healthcare. In fact, quite the opposite is likely.
"The transformation of care has driven leadership further into the organization," she says. "The concept of leadership is evolving. New titles include chief transformation officer, chief learning officer, [and] chief strategy officer. We're doing a study about these new titles, but the face of the C-suite is changing."
Somewhat surprisingly, many CEOs seem to welcome that change.
Philip Betbeze is the senior leadership editor at HealthLeaders.