Hos­pi­tal CEO turnover stays high in pres­sured new cli­mate

Modern Healthcare - - CLASSIFIED MARKETPLACE - By Michael Sandler

The tough chal­lenges fac­ing hos­pi­tal and health sys­tem CEOs as they steer their or­ga­ni­za­tions through the shoals of rapid health­care change have led to a high ex­ec­u­tive turnover rate. Last year, hos­pi­tal CEO turnover was 18%, ac­cord­ing to the Amer­i­can Col­lege of Health­care Ex­ec­u­tives.

While that rate was lower than the record high of 20% re­ported in 2013, it still ranks among the high­est rates over the pre­vi­ous 15 years, ac­cord­ing to the ACHE.

Hos­pi­tal and health sys­tem boards want to keep up with the com­pe­ti­tion in ar­eas such as tele­health, health in­for­ma­tion tech­nol­ogy, pop­u­la­tion health man­age­ment and fi­nan­cial risk con­tracts. And CEOs are ex­pected to im­ple­ment ini­tia­tives in those ar­eas rapidly and ef­fec­tively, said Thomas Giella, chair­man of health­care ser­vices at Korn Ferry, a Los An­ge­les-based ex­ec­u­tive search firm. Those who don’t show enough progress may be forced out, he said.

This new cli­mate is caus­ing more C-suite reshuf­fling, with av­er­age CEO ten­ure now last­ing less than four years, Giella said. In the past, hos­pi­tal CEOs would typ­i­cally serve 10 to 15 years.

One pos­i­tive side ef­fect of shorter tenures, Giella noted, is that health sys­tems are more will­ing to hire older, more ex­pe­ri­enced ex­ec­u­tives who can pro­duce re­sults in less time. On the other hand, the faster pace of change also can lead to the de­par­ture of older CEOs, who may not have the de­sire to lead their sys­tem through a dra­matic trans­for­ma­tion, said Stephen Ge­lin­eau, ex­ec­u­tive vice pres­i­dent of GE Health­care Cam­den Group.

The CEO or the hos­pi­tal sys­tem may de­cide to have some­one else lead such a ma­jor ef­fort.

An­other fac­tor in the higher CEO turnover rate is sim­ple de­mo­graph­ics. Many hos­pi­tal lead­ers are baby boomers headed into re­tire­ment, said Paul Bohne, se­nior part­ner and vice chair­man of the health­care prac­tice at Witt/Ki­ef­fer.

Hos­pi­tal con­sol­i­da­tion also trig­gers more CEO turnover, Bohne said.



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