Prescription for Change

Modern physician executives: Not your father's CMO

by Zachary Hafner, MBA

Over the past decade, the chief medical officer quietly has become one of the most important people at the health system executive table. Ask a CMO why, and she or he will tell you that the core issues and concerns are much the same as they have always been—quality, patient safety, and bridging the gap between administration and medical staff. These remain the bread and butter of a CMO's agenda.

So what has changed? Everything around them. The transformation of health care is fundamentally altering the environment in which health systems function, placing the CMO squarely at the center of a new reality where concepts like value, population health management, and outcomes-based payment are becoming key drivers of success.

Here are just a few of the ways in which health care has shifted in a way that amplifies the importance of the CMO's perspective and influence:

  1. The move away from "heads in beds" economics. In a world where reimbursement is tied to quality, outcomes, patient satisfaction, and other clinically driven metrics, the medical staff has an ever-greater role to play in generating and protecting health system revenue. In a fee-for-service world, administration could drive volumes through marketing and improved access, for example. Under value-based payment, optimizing revenue means designing and implementing new clinical processes—and that requires clinical leadership.

  2. Expanded health system focus on the entire continuum of care. For health systems to be successful over time with value-based payments and a population health orientation, they need to think more holistically about care models and more longitudinally about care delivery, coordination, and management. This involves buy-in, support, and ongoing involvement from the medical staff—and that requires clinician leadership at the table.

  3. The advent of potentially transformative technologies that require physician utilization. Intensified effort to deliver higher-quality care at lower cost means health systems need to advance the uptake of technology and use it in novel ways. For example, innovative use of EMRs, virtual care platforms, and care management engines can be a boon to population-health management—but only if the medical staff uses them effectively.

  4. The financial and clinical mandate to eliminate unwarranted variation. In today's health care environment, every health system must have eliminating unwarranted clinical variation as one of its strategic imperatives. Unwarranted must be emphasized, not simply variation; we want a health care system that is smart and caring and adjusts to individual patients. But unwarranted variation affects quality, predictability (which is relevant for risk arrangements), and cost. Addressing the factors that cause it means taking a close look at every aspect of how patients are treated. Cooperation and behavior change on the part of the medical staff is needed. It often falls to CMOs to build and sustain openness to this "culture of change."

  5. Shifting regulations and governance structures. Rapidly changing dynamics in the physician world such as formation of clinically integrated networks, which brings new performance metrics, and evolving payment models affecting physician income—MACRA, for example—are having a profound effect on physician practice and compensation.

Winning the trust and cooperation of the medical staff can be notoriously difficult. It almost always requires a strong physician at the helm. As a result, many boards and their executive search committees have begun to seek out physician CEOs, a trend that may make it even more important to have CMOs there at the table, involved in making strategic decisions, rather than being asked to justify them after the fact.

This is not a knock on your father's CMO. But today's CMO is gaining prominence in overall health care system strategy and success. The father would be proud and maybe just a little bit envious.

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