Special report: COOS take on more responsibilities, career risks
COOS have seen their responsibilities shift and expand with changes in healthcare and growing demands on the chief executive
Added responsibilities may allow chief operating officers to rightfully assume part of the glory when their hospital or health network flourishes. But as the job continues to expand and evolve, the role also leaves the COO more vulnerable in case of failure. They’re the ones increasingly being held accountable for overall outcomes at their organizations.
The level of scrutiny doesn’t surprise John Haupert, the new CEO at Grady Health System in Atlanta. The system includes 689-bed Grady Memorial Hospital and six neighborhood health centers. He says COOs require the skills of a diplomat coupled with financial prowess and leadership skills as they navigate the needs of doctors, administrators and board members.
“As a senior executive in a large organization, part of what you signed on for is being an ambassador, a messenger for the organization,” says Haupert, who started this month as CEO. “Being at that level, you take the heat as well as the accolades, if there are accolades to be taken.”
Haupert knows a bit about sitting in the cross hairs. He came from Parkland Health & Hospital System in Dallas where, since 2006, he worked as COO. The CMS threatened to terminate Parkland from the Medicare program earlier this year, and the 672-bed public hospital reached a $50,000 settlement with HHS’ inspector general’s office for allegedly violating the Emergency Medical Treatment and Active Labor Act (Sept. 5, p. 16). Haupert’s mentor, Dr. Ron Anderson, will step down from his role as Parkland’s president and CEO at year-end, a nearly 30-year tenure.
There’s a varied set of expectations for COOs. Some depend on the CEO’s workload, while other factors include the size of the organization and the area it serves. “It’s different at every hospital,” Haupert says.
Haupert says he knew Anderson for 15 years before he began with Parkland, as they knew each other professionally while Haupert worked as executive vice president for the four-hospital Methodist Health System, also in Dallas.
When Anderson sought Haupert out for Parkland’s COO post, he says he was the only candidate. Parkland went through a management reshuffling, Haupert says, with Anderson needing to fill several vacancies in the C-suite.
The established relationship proved critical as Anderson and Haupert made sure their roles were well-defined, Haupert says.
“I read a long time ago about how conflicting the COO can be if there isn’t a clear understanding between the CEO and COO about the role he wants you to play,” says Haupert, who was tasked with focusing on certain areas of operations, both clinical and nonclinical, often acting as a bridge between the two. “He wanted an operator.”
To head off any potential conflict in his new role at Grady, Haupert says he plans to meet soon with his COO to outline his expectations for the job.
Haupert’s days solving financial challenges at Parkland may prepare him for similar situations at his new job. Grady relies on county funding, which has dipped in recent years, leading to staff reductions. The last time Grady turned a profit was fiscal 2009. Former CEO Michael Young arrived in 2008, and for that fiscal year, the hospital posted a loss of $35.1 million, according to its financial reports, compared with a $33.3 million deficit in fiscal 2007. Grady has again budgeted for a deficit for fiscal 2011, according to the system.
New demands on the CEO
The executives interviewed for this article all agreed that changes in the CEO position also dictate the COO’s role, and much of that is being buoyed by healthcare reform.
The new emphasis on holding providers accountable for quality and safety is requiring CEOs to spend more of their time interacting with officials outside the hospital setting. That might mean dealing with legislative pressures that require them to spend more time on advocacy. It’s also handling more outreach; responsibilities include attending community events, fundraising and forging partnerships.
Consolidating resources to save money has also increased sharing of duties between the CEO and COO, such as managing the increased number of doctors employed at hospitals and overseeing implementation of pricey information systems.
CEOs were already considered too busy reviewing day-to-day operations, but these added burdens often mean the COO has to take a much more visible role with staff. At many organizations, the COO is now the C-suite
John Haupert, the new CEO at Grady Health System in Atlanta, had been COO at Parkland Health & Hospital System, Dallas, since 2006.