Turnover among hospital and health system chief executive officers (CEOs) is higher than in other industries.1 Along with navigating ever-changing policies and regulations, hospital CEOs must work with multiple payers, meet community obligations, stay current with evolving technology, contend with complex staffing issues, and keep their doctors and board members happy—all while delivering high-quality care. The American College of Healthcare Executives credits consolidation, industry transformation, and aging leaders with an 18 percent turnover rate among hospital CEOs for the last three years.2
As a follow-up to our 2015 Deloitte Survey of US Health System CEOs, we interviewed 20 health system CEOs in May 2017. We found that, of all the issues that may keep hospital CEOs up at night, they say they are most concerned about the future of Medicaid; CEOs also worry that the transition to value-based care is moving too slowly. Declining margins is another top concern, as are challenges in finding, recruiting, and retaining forward-thinking and adaptable health care leaders. Keeping up with new technology—and the cyber- security risks that accompany it—and adapting to evolving consumer expectations are also important issues. (Many of these issues are interrelated.) CEOs note that effectively addressing the above challenges is compounded by uncertainty about the new administration and its health care policies.
This Deloitte Center for Health Solutions series explores hospital CEOs' top concerns, including:
- Potentially changing Medicaid reimbursement and other policies issues
- Implementing population health and value-based care
- Maintaining or improving margins
- Recruiting and retaining top talent, including health care leaders
- Keeping up with evolving technology and cybersecurity risks
- Adapting to changing consumer demands and expectations
Many CEOs say they are focusing on developing new revenue streams, lobbying and influencing policy, investing in the future (e.g., technology, growth, talent), and developing alternative payment methods. Strategies vary based on the populations each hospital serves.
While no single strategy will work for every hospital, ideas that CEOs are considering include:
- Diversifying and identifying alternative revenue streams
- Developing more primary care locations and alternative sites of care, including urgent care and retail clinics
- Reducing inefficiency and rethinking how care is delivered
- Investing in strategies to prepare for value-based care, including shifting funding from hospitalists to primary care practitioners and chronic-disease management
- Meeting consumer demands—ultimately, the players with the most 'members' are going to do the best
While none of the key themes emerging from our interviews have really changed since we last spoke with health system CEOs in 2015, the urgency certainly has. Instead of thinking about these issues in a futuristic sense, CEOs are ready to address and tackle them now.
Read more in: Deloitte 2017 survey of US health system CEOs.
Footnotes
- Tamara Rosen, “275 CEO departures this year: Healthcare again leads all sectors in CEO turnover,” Becker's Hospital Review, December 18, 2014. Available at [http://www.beckershospitalreview.com/hospital- management-administration/275-ceo-departures-this-year-healthcare- again-leads-all-sectors-in-ceo-turnover.html].
- Jeff Lagasse, “Hospital CEO turnover rate remains a high 18 percent, consistent with past few years, report shows,” Healthcare Finance, May 24, 2016. Available at [http://www.healthcarefinancenews.com/news/ hospital-ceo-turnover-rate-remains-high-18-percent-consistent-past-few- years-report-shows].
