Hospital Leadership 'Success,' Redefined

Healthcare consolidation is changing and eliminating the role of the hospital CEO. But there are still opportunities for strong leaders—they're just not always going to come with the title of CEO attached to them.

I wrote several weeks ago about the disappearing hospital CEO, and the column struck a bit of a nerve. Though I didn't have much more than anecdotal material to back up my claim that CEO jobs are getting scarce, I hit a nerve. Others who are observing the same phenomena started to get in touch with me.

I spoke with one headhunter who told me that it's scary out there for those who are looking to lead hospitals as consolidation really takes hold. Lots of good jobs are going away or transitioning into something different than how they've been defined for decades. Before you're overcome with the doom and gloom, however, there are still opportunities for strong leaders—they're just not always going to come with the title of CEO attached to them.

Can you handle that, especially if you've already been to the mountaintop, so to speak?

"I was having lunch with a CEO of a system that has 10,000 employees," says Andrew Chastain, managing partner of the southeast region for executive search firm Witt/Kieffer, who says at least in that person's instance, that title, and many of the responsibilities that go with it, is going away.

"He told me 'we'll be a subset of a larger system. And my job will be employee relations.'"

Too Young to Retire
That can be a tough pill to swallow, especially for someone who's been the leader of his or her own hospital or health system for a number of years. For many, it's the signal to retire or change jobs. But some CEOs aren't fortunate enough to be able to retire young, and almost certainly there won't be the number of available jobs at the CEO level as they might expect.

They might have to tough it out with what many see as a reduction of responsibilities and status.

For some, the title might remain, but day-to-day life will change dramatically, says Chastain. Where once you were master of your organization's destiny, now you might just be a cog in a bigger system's executive framework.

"There will be fewer and fewer of those positions," Chastain says, adding that as an executive recruiter, he's struggled along with his clients to define a way forward for those who have always defined success as attaining the CEO job at a hospital or regional health system.

"What's the ray of hope? The best I've come up with is we'll have to redefine what success looks like," says Chastain.

Not exactly the most satisfying of answers.

Matrixed Management Structures
It's almost like managing a franchise, instead of managing a company, he adds. If that's the case, success might mean something else going forward indeed.  

Larry Tyler, chairman and CEO of Tyler & Co., an executive search firm specializing in healthcare, says he's seeing a lot more interest by boards at growing health systems in matrixed management structures, where the titles may be widely variable, but also where title is not nearly as important as the number of pieces of the enterprise that report to the executive on a dotted-line basis.  

"We're seeing a lot of matrixed operations. As they're trying to flatten the management structure and take out the overhead, you're getting people in concurrent positions, so they are combining jobs," Tyler says. "I was in a health system last week and their chief nursing officer is also the COO."

It's part of the mandate to take costs out of the system wherever and whenever possible, he adds.  

Another sign of hope: Many systems are experimenting and reorganizing along the capabilities of the individual involved instead of the other way around. The system's not necessarily going to follow the established c-suite pecking order, and the division of duties, including whom reports to whom, is much more variable.

'A Lot of Analysis'
Tyler relates recent experience in job searches for organizations that are very different from those he was getting just a year or two ago. For instance, he conducted a vice president of finance/operations search for a large hospital that's part of a system, in which the duties once associated with the CFO position have been removed from the job description. Revenue cycle and payroll, for example, are not there. But what is there is a lot of analysis, and the directors of the cardiology and ED service lines, just to name two, report to this vice president.  

"The org structure starts looking really strange," he says. "You might report to somebody you wouldn't normally think of. In that sense, it's a good trend because it gets people out of the silos and helps broaden them so they understand what life's like in a different area.

In the end, Tyler's recommending a new definition of success for the hospital or health system executive too.

"You can't necessarily aspire to be the CEO anymore because there aren't enough jobs," says Tyler. "Not long ago, if you had a master's in health administration, you automatically had a job and most were CEOs by age 40. The most many can aspire to now is being a vice president, because [there just aren't] those job opportunities."