Hospital CEO wanted: No health care experience needed.

Two-thirds of CEOs hired this year are expected to have minimal health care experience

Hospital boards are increasingly seeking out executives with perspectives from outside the health care industry, with many recent hires coming from the finance, business development, and technology sectors, Christopher Gearon writes for U.S. News & World Report.

Fundamental changes in care delivery and payment reform under the Affordable Care Act (ACA) are expected to alter hospital staffing needs, increasing the demand for primary care physicians and general practitioners and altering the skill set required of a hospital's C-suite.

"It's about managing health now, not care," says Doug Brown, managing director of Black Book Rankings.

A recent Black Book survey of 1,404 human resource officers and health care board members projects that two-thirds of hospital CEOs hired this year will have minimal health care experience—a major increase from 19% in 2009.

Hospital boards and HR directors are searching for leaders who have a background in business development and financial management, and technological expertise is a bonus, too. Individuals from productivity-focused sectors that have endured consolidation are uniquely situated for running today's hospitals, Brown says.

The heightened focused on population health management, value-based payment, and clinical integration has also promoted interest in non-industry hospital CEOs, says Paul Esselman, executive vice president and managing principle at Cejka Executive Search.

Outside-the-industry CEOs offer unique perspective, skill sets

Outside CEOs often are willing to make "transformations from the bottom up," Brown says. For example, many eliminate non-core product lines, purchase supplies differently, cancel expensive legacy arrangements, and renegotiate contracts.

Similar strategies helped Miami's Jackson Health System achieve its financial turnaround, according to U.S. News.

After taking the helm in May 2011, Carlos Migoya—a career banker—concluded that Jackson was lacking budget accountability and expense controls, and the system was unable to collect on certain revenue streams. As a result, Jackson had lost $428 million in the previous four years and "there was no business plan going forward," Migoya recalls.

Migoya instituted several operational reforms, bringing in "a lot of people with for-profit experience" to maintain expense controls, monitor operations, and collect payments. He realigned procurement procedures, adding incentives that "dramatically improved" Jackson's process, time, and costs. The system also outsourced pharmaceutical management, saving nearly $15 million annually.

Last year, the system reported a bottom line of $45.7 million. Jackson has also launched an $830 million, decades-long renovation and infrastructure upgrade and solidified relations with the University of Miami, whose physicians the not-for-profit health system relies on. Migoya also has reinvigorated Jackson's community-based urgent care and clinics.

"The health care industry is going through major changes," says Migoya, adding, "Sometimes, if you're in the forest, you don't see the trees" (Gearon, U.S. News, 1/28).

How to build tomorrow's leaders, today

The HR Investment Center's latest study, A New Starting Point for Workforce Planning, offers tools and tactics for hospital leaders trying to transform their workforce to succeed under value-based care. 

The study directly addresses one of the most pressing issues for health care leaders: Organizations that fail to adjust their workforce blueprint to account for the changing demands of value-based care risk being caught off-guard—and without the type and number of staff they’ll need to succeed.

See our archive of resources on leadership development and succession management, too.

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