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Healthcare Hiring: Six Reasons Running a Hospital is Different with Senior Leadership Retention

March 1, 2012

Hospital senior leadership turnover is a problem.  It makes it is difficult to implement long term strategic plans.  It’s hard to get buy-in from physicians and staff on operational changes when they believe the leadership team won’t be around to see it through.

A recent article points out that hospital CEO turnover continues to outpace other sectors. Healthcare organizations saw the heaviest CEO turnover among all industries in 2011, according to Challenger, Gray & Christmas; 187 CEOs left their posts at an average of 16 per month.

Compounding the problem is that hospital leaders must now face the uncertainty of accelerated healthcare reform.  "We're seeing a growing number of executives kind of throw up their arms and say, 'I've gone through major changes in health care, and I'm not really in a position where I want to go through this major change again,'" Mark Madden, senior vice president of executive search of recruiting firm B.E. Smith, is quoted in The Fiscal Times.

Even without the uncertainty of recent healthcare reform efforts, running a hospital is not like running other businesses:

  1. It is a highly complex organization.  The staff and services under a hospital roof are complex and diverse.  There is no clear “product” or “service” around which the business is built.
  2. Nearly everyone in the organization has expertise that exceeds that of the CEO -  A hospital CEO must have enough confidence to accept that he or she likely is not a physician, or a hospital finance expert, a nursing expert, a process improvement expert or a patient satisfaction expert.  The competencies that predict success are more about vision, leadership and communication.
  3. Success metrics are unclear – In other industries, success is clear – sell more widgets, improve the revenue and margin, etc.  We are just getting our hands around what “success” means for a hospital.
  4. The Board may be of little assistance – More so than perhaps any other sector, the Board of Directors simply cannot understand the complexities of hospital operations.
  5. The Regulatory Environment.  It sometimes seems that every idea that makes good business sense and would be ideal in another industry, is prohibited in healthcare.
  6. Business pressures must be balanced with community responsibilities.  Particularly in non-profits, the right business move may be the wrong move with regard to the hospital’s mission.

Given all of these factors, you’d think that the selection process for senior leadership positions is structured, thoughtful and effective.  Unfortunately, this is one area where healthcare is not adopting best practices from other industries.  The GEs and Toyotas of the world spend great deal of time and energy vetting senior leadership candidates, often relying on structured, proven executive assessment programs.  The same approach has not gained traction with hospitals.

We talk a lot about “evidence-based” medicine.  Perhaps we need to talk about “evidence-based selection” in order to improve senior leader retention and performance?

Want to read more? Check out our eBook, Healthcare Hiring Essentials.

Bryan Warren Bryan Warren was the former Director of Healthcare Solutions at PSI. He was responsible for developing and promoting tools and services designed specifically for the unique challenges faced by healthcare organizations.