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Presidents, CEOs, and the New Leadership Model

Philip Betbeze, for HealthLeaders Media, May 13, 2014
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"That was not easy to do when functions were siloed and separated," Thompson says.

Moreover, that reorganization of roles is the start of moving from what Thompson calls a "loose confederacy to a single operating company." The other major change in management philosophy is that SSM plans to operate in three distinct business units to help ensure cohesiveness: a hospital unit, a physician group unit, and a health plan unit. Restructuring the leadership at the corporate level also allowed SSM to bring aboard more physicians leadership roles.

"In particular, physicians are underrepresented in leadership," Thompson says. "When they were subordinate to hospital operations, their goal was to keep the hospital filled."

Two of SSM's unit leaders are physicians, and Thompson says they will work together because at the system and regional levels, they all have exactly the same goals and objectives as part of their performance evaluation.

"For instance, we expect to see 5% growth in patient service revenue, and certain levels of performance in quality, safety, and satisfaction, across the continuum," Thompson says. "Our expectation is that those business unit leaders will sit at the table and together determine the best opportunity for growth as a system. Working together, how can we lower the cost?"

Balance and pace of change is critical. Some 80% of SSM's systemwide revenue is still fee-for-service.

"We are still rewarded financially by having more admissions or providing more MRIs," Thompson says. "This type of strategic planning, and the reason to implement it now, is for when we reach a tipping point where we move from hospitals being the primary drivers of revenue into a capitated methodology where we assume not only performance but financial risk of delivering care to populations."

The success metric

Ultimately, systems like SSM will be evaluated on whether they can attract and retain patients. The "success metric," as Thompson calls it, will be the number of covered lives in the population for whom SSM is responsible.

"Regardless of the financial model, people will still go to providers who make it easy for them to get an appointment, who can reduce wait times, and who can make fewer mistakes and errors," he says. "That's a model we can implement today that will also be successful in the future."

But Thompson concedes it's been a difficult transition with some of the local talent. Selling the message that local leaders weren't being devalued by shrinking their responsibilities, resources, and autonomy is difficult.

"One of the ways we're positioning it is that we're not taking things away from the hospital presidents so much as giving them more time to do the things they do well," he says.

Sometimes, such leaders don't see it that way. The broader issue, and what Thompson is convinced is best for the organization in the long term, is that hospital presidents don't necessarily need to be engaged in the broader strategic plan for a region.

"While it is important for regional hospitals to participate in the strategic conversation, it is more critical that they spend their time implementing and improving strategic performance," he says.

Although the health system has not yet rewritten job descriptions to reflect the new reality locally, Thompson says they're working on it.

"We purposely don't use the term CEO, but we focus on the need to deliver high levels of service within the four walls of the hospital they're responsible for," he says, offering three areas of interest. "They still have to focus on that episode of care within the hospital, and second, he or she has to be fully engaged with physicians and employees because he or she doesn't deliver care at the bedside. Third—and this goes hand in hand with delivering quality and value—they have to be very strong expense managers."

Thompson says that's because the resources SSM—and, indeed, all health systems—will be able to devote to inpatient care will be challenged in the future. How to do it with fewer resources is the question he wants his hospital presidents to try to solve every day.

Communicating the message

Thompson and the board at SSM, for example, don't want local presidents to have to worry about things like human resources, a job that can be done more cost-effectively and with better standardization across the system.

"Or if we have an outstanding person in marketing, why not leverage that across the entire system?" he argues.

But he realizes such concepts can ring hollow to a certain cohort of leaders who are used to running their own show.

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