Hospital CEO turnover climbs to 20%

The turnover rate among hospital chief executives hit 20% in 2013, the highest rate since the American College of Healthcare Executives first began collecting CEO turnover data in 1981. The rate stood at 17% in 2012 and an average 15.5% annually for the prior 32 years.

While expecting some increase from 2012, executive recruiters said they were surprised by the magnitude of the jump.

More hospital consolidation and aging baby boomer retirements are likely factors behind the trend, they said. That suggests the higher turnover rate may not be limited to one year. “If the acquisitions and mergers continue, I think we are going to continue to see this,” said Mark Madden, senior vice president of executive search for B.E. Smith.

Hospitals acquired by health systems may see turnover as some chief executives exit after deals. Reorganization and centralization within multi-hospital health systems may replace CEOs at each hospital with regional chief executives who oversee more than one facility. Another driver is trustees and directors seeking to fill top spots with physicians.

“We can confirm that there's a lot of moving chairs,” said Donna Padilla, a senior partner with executive search firm Witt/Kieffer.

The churn may continue, she agreed, as top jobs undergo reorganization or elimination at hospitals grappling with consolidation and pressure to cut costs. “A year isn't enough to flush that out,” she said. “It's not getting any easier out there.”

“I think we all intuitively think that turnover is inching up,” agreed Deborah Bowen, ACHE's president and CEO.

This year's uptick should underscore the need for succession planning, Bowen said. Abrupt departures of top executives can interrupt and delay adoption of long-term strategic goals.

ACHE determines the turnover rate by examining chief executives listed for 4,546 hospitals in American Hospital Association records.

Follow Melanie Evans on Twitter: @MHmevans