Hospitals hire more doctors as CEOs as focus on quality grows

With record-high turnover among hospital CEOs last year and an intensifying focus on clinical quality, a growing number of healthcare organizations are appointing physicians to their top executive positions, experts say.

The trend “is being driven by the need for hospital and health systems to have closer alignment and the recognition that future success will rely on changing the design in which healthcare is delivered,” said Dr. Andrew Ziskind, managing director at Chicago-based Huron Healthcare and former president of Barnes-Jewish Hospital in St. Louis.

While only 5% of hospitals are led by a doctor, according to the American College of Physician Executives, some of the most prominent systems in the country have physician CEOs, including Dr. Steven Corwin at New York-Presbyterian University Hospital of Columbia and Cornell (No. 17 on Modern Healthcare's 50 Most Influential Physician Executives and Leaders list); Dr. Toby Cosgrove, CEO the Cleveland Clinic (No. 10); Dr. David Feinberg, president of the UCLA Health System (No. 49); Dr. John Noseworthy, president and CEO of the Mayo Clinic (No. 2); Dr. Paul Rothman, CEO of Johns Hopkins Medicine; and Dr. Peter Slavin, president of Massachusetts General Hospital (No. 46).

More recently, Dr. Richard Gilfillan, No. 1 on the Most Influential Physician Executives and Leaders list for 2014, was named president and CEO at 82-hospital CHE Trinity Health. Dr. Mark Keroack took over as CEO of the Baystate Medical Center, Springfield, Mass. Dr. Ram Raju (No. 29) just became CEO of New York City Health and Hospitals Corp. Dr. John Jay Shannon succeeded Raju at the Cook County Health & Hospitals System, Chicago. And Dr. Stuart Marcus became the new president and CEO of St. Vincent's Health Services, Bridgeport, Conn.

Physicians also are being chosen to lead major non-clinical organizations. Dr. Susan Desmond-Hellmann (No. 13), former chancellor of the University of California at San Francisco, was appointed CEO of the Bill & Melinda Gates Foundation. Dr. Jim Yong Kim left his post as Dartmouth College president to become president of the World Bank in 2012.

Physicians see top management positions as a powerful perch for leading the drive for improved quality of care, patient safety and clinical efficiency, said Dr. Gary Gottlieb, president and CEO of Partners HealthCare in Boston, who is No. 11 on the Most Influential list and is the only person to make the list all 10 years of its existence. “Physicians are pursuing management roles to a greater degree than before,” he said. “They get the bug because they realize how they can make things better.”

One advantage is that physician executives often have greater credibility with clinicians than nonphysician administrators on clinical issues.

The American College of Physician Executives, which helps groom doctors for management and leadership roles, published a white paper in April titled, “The Value of Physician Leadership,” explaining some of the reasons for the rise of physician executives. The redesign of clinical-care models aligning payment with clinical excellence and improved outcomes puts physicians “at the center of this stage,” according to the paper, which was co-written by ACPE President and CEO Dr. Peter Angood (No. 30) and Susan Birk. “Physician leadership is critical to shepherd healthcare into the future, creating a delivery system grounded in better health and better healthcare at lower cost.”

Traditionally, physicians have tended to be disinterested in management and leadership roles. But that is changing, and physicians are applying and training for these positions in greater numbers.

Dr. Gary Kaplan (No. 3), chairman and CEO of Virginia Mason Health System in Seattle, said historically, physicians saw administrators as “bean counters.” More physicians now are participating in leadership roles because they have opportunities to implement organizational change and vision, create clinical integration and design workflows, he said.

While statistics on the overall number of physician executives are not available, Dr. Andrew Agwunobi, director of hospital performance improvement for the Washington-based Berkeley Research Group, said he sees more organizations appointing physician leaders.

“There is no doubt this will be an accelerating phenomenon,” said Agwunobi, former CEO of Providence Healthcare in Spokane, Wash., and former CEO of Grady Health System in Atlanta.

And there are now more opportunities for physicians to step into hospital leadership roles given that the American College of Healthcare Executives reported 20% turnover in hospital CEOs in 2013. That's the highest rate since the group started tracking this statistic in 1981.

Kaplan said high CEO turnover could be at least partly due to nonphysician executives feeling overwhelmed by the challenging transition to value-based reimbursement, population health strategies and cost transparency. They might have been thinking, “This isn't what I signed up for,” he said.

Having more physicians and nurses move into senior leadership positions is a good thing, argued Dr. Steven Safyer (No. 35), president and CEO of Montefiore Medical Center in the Bronx. Montefiore's other senior leaders include COO Dr. Philip Ozuah, senior vice president and chief of staff Lynn Richmond, a nurse practitioner, and Senior Vice President of Operations Susan Green-Lorenzen, a nurse. “The business of the business is medicine, and nurse leaders and physicians know the subject,” Safyer said.

For people who intend from the start to be doctors serving in leadership roles, there has been significant growth in the number of academic programs combining M.D. and MBA degrees. Agwunobi, who has an MBA himself, said there are at least 65 such programs now.

While more younger physicians receive business and leadership training early in their careers, Agwunobi urged hospitals and other organizations not to overlook older, entrepreneurial physicians as potential leaders. Doctors who ran and expanded their own practices have a lot to offer larger organizations in terms of management skills. “They were not just accomplished physicians, but accomplished business people as well,” he said.

But Ziskind said there's one major pitfall that physician leaders need to keep in mind. “The essential character traits that made them a successful clinician are not necessarily the essential character traits that make an effective leader,” he said. “One of the mistakes physician leaders often make is applying the same 'I can do it' approach from clinical training.”

New physician leaders need to change their mindset from achieving success as an individual to achieving success as a team. Still, he said, physicians “certainly understand what's needed to make changes in the way care is delivered.”

Follow Andis Robeznieks on Twitter: @MHARobeznieks