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Carving Out a New CEO Model

Philip Betbeze, for HealthLeaders Magazine, November 12, 2009
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That seems like an overly simplistic statement that makes common sense, but many CEOs are used to boards that have little interest in matters outside of financial performance or capital planning. That's partly a function of their part-time role with the organization and partly the result of focusing on looking at trends at an extremely high level. However, it's also a function of perhaps trusting the CEO too much to let them know if something's not quite right.

"The CEO very much is in a position to help shape board education," says Foster, "and if you're not having input on the things they should be focused on, you're not doing your job. A lot of CEOs are playing defense right now with their boards."

But the ones best set up for future success are trying to educate so that they have help in leading the organization through difficult times, says Garrett. And responsible CEOs should encourage board members to drill down below the surface of the reports they receive from management to test and probe their CEO's mastery of the concepts that will ensure future success.

"A healthy change is that boards are more engaged than a few years ago," he says. Of course, it's important that the board is getting appropriate information from the CEO and management team, such as dashboard reports in a variety of key areas, such as quality, patient safety, patient satisfaction, physician satisfaction, and financial trends that help the board understand what is being done at the 30,000-foot level. But if that information is the baseline, they can easily drill down.

Quality is in your hands
Quality measures, whether they are compiled by Medicare, individual states, private payers, or private companies such as HealthGrades, are perhaps the biggest influencer in changing the role of the hospital CEO in recent history, says St. David's Foster. That's because quality can be quantified much better now, and reimbursement is ever more frequently being directly tied to how well the organization measures up against its peers on quality scores.

"Over the past several years, we're spending as much time discussing quality as strategy and financial results," Foster says. "I've been in a number of organizations, and they usually focus on the financials and give a quick look at the quality report."

The CEO is in a position to shape the board's focus on quality, if he is proactive on that front, says Foster, whose system's own quality scores were robust enough for him to feel comfortable recommending that his board spend as much time discussing its implications on financial results and strategic direction.

In his role as an executive coach, Pryor says he's working with several hospital CEOs on how best to integrate quality as a tool to break down silos within the organization. In other words, convincing disparate stakeholders that quality is everyone's job, at all times. One client in particular stands out to him in this initiative in that he helped the CEO realize that although his senior management team was a solid operating group, "he was lacking the kind of creativity in business development, new idea generation, and clinical and quality improvement excellence that he needed under the new paradigm," he says. "One of the things he and I worked out was a new organizational structure that would preserve important roles for the solid people he had, but added several significant new roles to his leadership team."

For his part, Hackensack's Garrett says integrating quality accountability into the health system doesn't stop at the hospital walls. To help ensure that its joint ventures are also focused on the metric, he's formed a separate joint venture board tasked with working collaboratively with physicians to be sure the quality goals for the entire health system are being met.

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