Strategy around technology may be influencing leadership changes this year.
Following a significant jump in CEO turnover at hospitals and health systems in 2023, this year has kicked off with several other leaders exiting organizations.
As hospitals shape their long-term vision to include more technology and innovation, that approach is affecting the makeup of the C-suite. CEOs also continue to deal with overwhelming challenges that are contributing to voluntary exits and retirements.
In January, hospitals and health systems reported 11 CEO changes, according a report from executive coaching firm Challenger, Gray & Christmas. While that figure marks a 52% decrease year-over-year, the 23 exits announced in January 2023 were the most for the sector since August 2018 (24).
Last month’s 11 changes were a slight increase from December 2023, when 10 CEOs departed to close out a year that featured 146 changes. That total represented a 42% increase from the 103 exits announced in 2022.
For January, the hospital sector finished behind only government/non-profit (48), healthcare/products (22), and technology (21) for most CEO exits among 29 industries.
In total, companies experienced 194 CEO changes, which was down 5% from December 2023 (204) but up 73% year-over-year (112). It’s the highest amount of turnover to start a year since 219 CEOs departed in January 2020.
Technology’s growing presence could be impacting these moves, with companies wanting leaders in place who can stay ahead of the curve.
“Companies’ priorities are cost savings and digital transformation in 2024, and that often means choosing new leadership to implement these plans,” said Andrew Challenger, senior vice president of Challenger, Gray & Christmas.
For hospital CEOs, embracing investment in technology can be worthwhile for both your organization and your tenure, even if return on investment is not yet fully realized.
A recent survey of payer and provider executives by Ernst & Young found that while 71% of respondents haven’t seen lowered hospital expenses yet as the result of new technology implementation, 96% believe that the investment is worth the cost.
Jay Asser is the contributing editor for strategy at HealthLeaders.
KEY TAKEAWAYS
January saw 11 CEO changes at hospitals and health systems, which was a sizeable drop-off year-over-year but an increase from the previous month, according to a report by Challenger, Gray & Christmas.
Across all companies in 29 industries, 194 CEO exits were reported for the month, marking the most turnover to start a year since January 2020.
All organizations, including hospitals, could be making these moves with the importance of leading digital change in mind.