In the context of shortages of almost everyone who works for them, the idea that there isn't even a strong cadre of willing and able administrators seems overwhelming. After all, the pay and perks are excellent, the educational requirements aren't too onerous and the jobs are interesting.
So is there really a shortage of up-and-coming chief executive officers?
With no empirical data to go on, it's been a hotly debated question ever since a group of professional organizations and academic groups organized a summit in February 2001 to discuss ways to improve the development of healthcare leaders.
Some assert that there is a dearth of middle managers with the skills and background to take over for today's generation of chief executives. They point to reports of longer times for executive searches, particularly for top positions at large systems. CEO salaries have been increasing at a healthy clip, indicating that organizations are trying hard to recruit and keep talent at the top .
But just as many, including some recruiters and leading professional organizations, deny a leadership shortage. They say rising stars are overlooked because they work at smaller systems and stand-alone hospitals.
A leadership shortage was the premise for the National Center for Healthcare Leadership, a not-for-profit organization formed after the summit by high-profile industry leaders including former American Hospital Association Chairmen Gary Mecklenburg and Gail Warden. The NCHL has received grants from the Robert Wood Johnson Foundation, the W.K. Kellogg Foundation and, most recently, GE Medical Systems to promote leadership development.
Your perspective may depend on where you sit.
Jordan Hadelman, chairman and CEO of executive search firm Witt/Kieffer, Oak Brook, Ill., says CEO search times have continued to increase-by about 20% since September 2001-because of the poor economy and general reluctance of executives to make major life changes. That's on top of a shortage of candidates for top jobs that appeared as the industry encountered more financial challenges, he says.
"I do think that the number of candidates is fewer and those candidates have more choices in terms of opportunities," Hadelman says.
But others-including some at rival recruitment firms-say those assertions are just plain wrong, not to mention demoralizing to those who are working their way up.
Mark Neaman, president and CEO of three-hospital Evanston (Ill.) Northwestern Healthcare, says he was encouraged by the many talented managers he met during his tenure as chairman of the American College of Healthcare Executives, which ended in March. Neaman believes some systems might have a hard time filling top jobs because their criteria are too stringent-such as considering only candidates with previous CEO experience at a major medical center.
"The future looks pretty bright," Neaman says. He adds that it sends an "arrogant message" for industry leaders to assert that there isn't enough talent in the lower ranks. "Believe me, I can be replaced."
Regardless, the debate focused attention on a perceived need to improve leadership training. In recent years, Neaman's own system has formalized its mentoring program and stepped outside the usual healthcare circles to hire two key managers-its chief financial officer and human resources chief-from other industries.
Two years ago, Texas Children's Hospital in Houston created a "Leadership University" with monthly discussion groups, guest speakers and assigned readings to foster internal networking and management. Twelve people have participated in the program, spokeswoman Laura Frnka says.
Internal initiatives such as mentoring are critical, especially given limited budgets for external education programs at many healthcare organizations. The NCHL's leadership development programs cost more than $20,000 per executive and are designed for teams of as many as six senior executives from a single organization.
"It's obvious there's a limited segment of the industry that's able to make that kind of investment," says William Jessee, president and CEO of the Medical Group Management Association. For those that can't afford such elaborate programs, he says, "We have to find ways of serving their needs."
Educational and professional organizations also are examining their approaches. The Accrediting Commission on Education for Health Services Administration, Washington, plans to approve new criteria for health management programs this summer, with an emphasis on ensuring that graduates have basic competencies in a variety of areas including human resources.
Six professional organizations in the Healthcare Leadership Alliance-the ACHE, the American College of Physician Executives, the American Organization of Nurse Executives, the Healthcare Financial Management Association, the Healthcare Information and Management Systems Society and the MGMA-are studying ways to integrate their certification examinations, perhaps creating one basic certification for all areas in addition to specialized exams. Jessee says the goal is to increase career mobility.
"One of the problems the industry has always had is that people get into silos which they know really well, but they are oblivious about how it relates to the rest of the system," he says.