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Rise of the Chief Strategy Officer

Philip Betbeze, for HealthLeaders Media, November 25, 2013

What that means for Carmichael is tricky work, such as changing the way the organization approaches partnerships with physicians, developing its retail strategy, and moving away from the traditional campus into more accessible locations.

"We're looking at what types of services we need to put there to make our community more healthy," she says. "How do we evolve our payer strategy to accept different kinds of reimbursement? How do we develop new partnerships with payers in the marketplace? And there's always something going on around M&A. So the scope here is fairly broad."

Carmichael adds that while St. Vincent's hospital business is still strong—and a key piece to its mission--she suspects that as the organization pivots toward a focus on managing populations and taking financial risks on those populations' health status, "I'm not sure the majority of our margins will come from inpatient care. People are busy and want to access healthcare closer to home so transitions are important."

She says making those changes in strategy is so complex that health systems that are larger than one or two hospitals need the role of CSO to sequence strategies properly, if nothing else.

"Hospitals are not reputed to be the most nimble organizations, but that requirement is changing," she says. "Adding a CSO might be critical to retooling capabilities so we can do those things well and quickly."

If a CEO assumes his or her existing talent has the time to design and execute strategies that are different than the business as it exists today, that might be a big mistake, Carmichael says.

"Everyone's plates are really full on top of running a hospital or being responsible for operations. It's not easy to find time to focus on the future," she says. "Of course it varies from organization to organization, but if someone is struggling to execute on strategy, then a CSO might be a good addition."

Driving accountability

Intermountain's most visible internal initiative, says Poulsen, distinguished from accountable care, is called shared accountability.

Poulsen is charged with inculcating that philosophy organizationwide.

"The concept of accountability needs to span all the providers of healthcare—docs, hospitals, and ancillary providers—but also needs to engage the consumers of healthcare—patients or prospective patients—which we don't think have adequate visibility in the accountable care framework. The role of the CSO should be aligning people's interests and engaging all parties in dialogue and discussion."

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2 comments on "Rise of the Chief Strategy Officer"


Dike Drummond MD (11/29/2013 at 2:32 PM)
Chief strategy officer from outside of healthcare ... that is just one more member of the C-suite that has no concept of the stresses of the front line providers. With physician burnout rates at an average of 1 in 3 on any given office day regardless of specialty ... and the CSO clueless about what it takes to see patients ... my fear is they will recommend profit goosing moves that simply add to the stress on the doctors and nurses ... then scratch their head and wonder what is wrong with those people. If the CSO brings the mantra that exists in so many other industries - you know, this one: "We hire the best people we can find and take really good care of them" ... they might do some good. If they are just another clueless business mind that thinks healthcare is identical to running a manufacturing business [INVALID]- let's just make sure the current C-suite actually does some strategic planning twice a year. My two cents, Dike Dike Drummond MD TheHappyMD (dot) com

Donald G. Bellefeuille (11/25/2013 at 1:29 PM)
We've all been seeing more and more positions posted for Chief Strategy Officers. On the face of it I should welcome this recognition of the importance of our discipline in healthcare. But I just can't bring myself to do it. I argue in my blog,The StratEx Crossroad: Where Healthcare Strategy and Execution Meet, that our profession has to become more involved in the execution side of the equation. And that's what I don't see in a Chief Strategy Officer. By placing strategy at the center of the title and assigning chief to it you have essentially eliminated any possibility of getting involved in execution. Because any person in this role will want to maximize the amount of strategy they do, right? It's only natural because they are the Chief. And doing a lot of strategy means you are doing next to no execution. Then there is the problem of all the other chiefs popping up: operating, marketing, technology/information, medical, development, etc. How's that cliché go? Too many chiefs spoil something or other. So what is a poor Chief Executive Officer supposed to do? He is a Chief and, presumably, the head chief and execution is part of his title. So who is the Chief Strategic Execution Officer then? The CEO, the CSO, the COO? Who is the chief if everyone is a chief? I said in a previous post (Reorganization Is the Last Thing You Should Do) that the work should determine how you organize. And it's still good advice. The plethora of CSO postings sounds like just the opposite: That organizations are re-organizing themselves before they even know what the work in the new era of health reform entails. So be careful what you wish for as a Chief Strategy Officer. You may find yourself wanting more control over execution because when execution goes badly strategy gets blamed.