The executive recruiter thought he knew exactly what health system CEO Jack Buckley was looking for.
"If I can bring you four candidates and three of them are physicians, will that be OK?"
"No," Buckley replied emphatically. "All four have to be physicians."
Buckley was looking for a chief operating officer for Southern Illinois Health, a Carbondale-based system that serves 10 rural counties through six hospitals and an assortment of long-term-care, home health and hospice facilities.
He changed recruiters and late last year hired Tom Firestone, M.D., a physician board-certified in family practice and emergency medicine. Firestone had been an area medical director with Kaiser Permanente in Ohio for two years.
Firestone's appointment put him at the forefront of an emerging trend: Physicians are taking operations executive positions at health systems with an eye on the corner office as their next career move.
Officials at the American College of Physician Executives, which has approximately 14,000 physician members, say they are seeing movement into operations positions. Although most physician executives still hold titles such as vice president of medical affairs, many observers say doctors in senior-level operations positions are the wave of the future.
Doctors who take such jobs carry out many duties traditionally performed by nonphysician executives, but they also are expected to provide stronger ties to the system's doctors and be able to integrate issues surrounding cost and quality of care. Some physician executives obtain MBAs or other degrees to help them cope with their financial duties; others rely on the know-how of staff members. The trend is new enough that it's difficult to generalize about physician COOs.
For Firestone, the lure was having a significant role in shaping and implementing changes under way in healthcare.
"I see a major role for physicians in bridging information and medical practice," he says. "We want to send a message to our community that quality of care and outcomes are very important and will distinguish us in the marketplace." Several months into his position, Firestone is still charting his own path and developing relationships in the system and community that he needs to advance his ideas.
"Physicians who are in a position of political power can influence the quality of care more than nonphysicians," says Harvey Price, a Boca Raton, Fla.-based independent healthcare consultant.
Price says this is a reality some top executives find difficult to face. "Many CEOs feel threatened and believe that if they bring in a physician COO, their contribution will be reduced," he says. "But if they don't change, they will become the curator of their hospital rather than its CEO. If an organization doesn't have a physician at this level, they'll just muddle through."
Buckley recognizes the importance of having a physician near the top. "We were looking for ways we could integrate physicians into management and felt we needed someone at the highest level of the organization to help bring our physicians to the table," he says. "I wanted to find a physician who had some years in clinical practice and knew what it was like to practice medicine. And I wanted someone with some management experience who was ready to move up. In short, I wanted someone who could walk on water and leave footprints."
He says a vice president for medical affairs could not accomplish what he wanted because he or she would be a peer of all the system's executives and would have nearly a dozen bosses to answer to. Adding someone at the senior level overcame that problem.
Several months into the experiment, Buckley professes great pleasure with its results, although it's still too soon to talk about specific programs or accomplishments. He says Firestone "has done an exceptional job for us. He's able to spend much more time with the medical staff and talk to them in ways the rest of us cannot. He walks a fine line between clinical leader and operations leader and is able to always keep the patient at the center of our focus. We now see other physicians becoming engaged (in operations), giving us a broader pool of people truly involved in the total operation of the organization."
Firestone also thinks it's been a good beginning. "We're charting new courses, and there aren't many scripts to follow," he says. "I've been relying heavily on my strong operational background with managed care." Firestone learned about managed care by dealing with physicians on reimbursement and medical necessity issues at Kaiser.
"The physicians at Southern Illinois Health have responded well because they know I want what's best for their patients and for the system," he says. "There are some who are resistant and unsure what it all means, and we've been opening an honest dialogue with them. The goal is to shift the culture and create more value for the folks here."
Roger Schenke, the ACPE's executive director, says it makes sense that "if you have someone who understands and can manage clinical processes and train that person to manage operational processes, there would be value added."
The notion of adding value by using his experience as a physician was what brought Donald Manning, M.D., to his position as vice president for operations of Crozer-Chester Medical Center in Upland, Pa., one of the five hospitals in Crozer-Keystone Health System. Manning also has systemwide responsibility for geriatrics and behavioral health, arising from his training as a psychiatrist.
"The physician has a natural view of who the consumer is, and advancing that view provides a unique, value-added component," he says. "My real role lies in my ability to integrate care and management. I'm in a system that's remarkably flexible and creative, and it's been supportive and helpful to me."
Manning has an MBA and is a candidate for Tulane University's master of medical management degree. He believes such academic training is not critical but can be useful for a physician in an executive operational position. "The financial area of the health system has difficulty relating to physicians and physicians to them," he notes. "My business training helps ease that relationship."
Before joining Crozer-Chester, Manning was vice president at an academic medical center and managed "a few small departments" there. He says he is not yet at the end of his career but is unsure what his next step will be. "I signed on to complete a building and restructuring task that Crozer-Chester recognized as important," he says. "And that task is not complete yet."
When it is complete, he sees the possibility of becoming a systemwide CEO, COO or senior vice president. "Clearly, I have options open to me."
For Larry Shoemaker, M.D., executive vice president and COO of East Valley Regional Health System in Chandler, Ariz., the motivation to enter the executive ranks was a bit different. After years in private practice as a family physician, Shoemaker saw the move as an opportunity to take on new challenges.
While in practice in Colorado Springs, Colo., he started working at Centura Health-St. Francis Health's drug and alcohol unit as a way to give something back to the community. The hospital's CEO offered him a part-time position as administrative director, which led to an invitation to join the staff full time. Shoemaker decided to sell his practice and become a hospital executive.
He started with the hospital's for-profit subsidiary, which was establishing new businesses as part of the hospital diversification and restructuring movement that was rampant in the mid-1980s. "A lot of hospitals' subsidiaries went bust," he says, but his unit started a lot of different programs and made money. It even won an award from the Healthcare Forum, a San Francisco-based group now affiliated with the American Hospital Association.
Shoemaker also earned an MBA while running his companies and then decided to work directly in the hospital, first as an operations vice president and later as an administrator. He then moved to Philadelphia and spent five years as chief medical officer at Frankford Hospital before moving to Chandler two years ago.
He sees a system CEO position as the next rung on his career ladder, although he admits he's not sure he wants to give up being a COO. "I have my finger on the pulse of everything that's going on in the hospital," he says. "I know the nuts and bolts; I know the staff; I know the patients."
Like his colleagues in executive operational positions, Shoemaker believes his value to the system is his ability to understand and relate to both sides. That eases the difficult task of balancing the financial welfare of the institution with the healthcare needs of patients, he says.
He also has credibility with physicians. "They may not always agree with my decisions, but they know why I'm deciding things the way I do," he says.
He believes a combination of academic training in business and strong people management and relationship skills is necessary for a physician aspiring to a system executive office. "The physician COO has to be as good in financial matters as any nonphysician," he explains. "But that's something that can be learned. The ability to interact well with people is hard to learn out of a book or a class. If you don't already know how to do that, you're probably not going to be successful in this position."
Jennifer Grebenschikoff, vice president of Physician Executive Management Center, a Tampa, Fla.-based physician executive search firm, says system boards are becoming more willing to consider doctors for executive slots.
"They say they need to be well-positioned with the physicians in their community, and having a physician executive gives them credibility. At the same time, boards often fear it will be too expensive to bring a physician in as COO and ask if the extra cost will bring the value they want."
Mary Frances Lyons, M.D., a senior consultant with Witt/Kieffer, Ford, Hadelman & Lloyd in Kirkwood, Mo., says the notion of physician executives "still is very controversial because getting M.D. behind your name doesn't mean you know how to manage anything other than patients. Physicians theoretically can integrate clinical practice and operations because they know the mandates of care-management issues, but even raising the concept can generate lots of controversy."
One question that arises is whether physicians should be looking at a CEO or COO role.
Sue Cjeka, president of Cjeka & Co., a St. Louis-based healthcare recruiting firm, says she believes more physicians will become CEOs than COOs.
"Usually the COO is a finance and operations position, and physicians don't have that background," she says. "Rather than business skills, what's needed is to be able to speak to the hearts and minds of physicians about the need to change how we deliver care."
Lyons also thinks more physicians will become system CEOs but "not the systems of the past, with buildings and FTEs and revenues. Physicians will lead a delivery system that is decentralized, has multiple access points, has physician members, and has revenues for physicians and all other aspects of the system flowing through it."
Firestone of Southern Illinois Health looks forward to the day when he can be a CEO but is not sure he's ready. "There are probably very few physicians out there who could step right into a CEO position," he says. "The new CEO may need to be more of a strategist and planner. Most medical directors aren't ready.
Quite a few have business degrees or management degrees, but they don't have experience."
Support from the top doesn't hurt, Firestone says. "It's good to have a mentor like Jack Buckley, someone who's not threatened by this arrangement," he says.
"There's still fear in a lot of old-school CEOs because business schools still haven't changed how they teach people to be CEOs."
John G. Hope is a Harrisburg, Pa.-based freelancer who frequently writes for Modern Physician.