John Muir Health CEO Cal Knight planned to retire last year, but like many hospital and health system leaders, decided to delay his departure amid the COVID-19 pandemic.
That gave the board of the Northern California-based not-for-profit system an extra year to identify and interview internal and external candidates. The search yielded more than 60 candidates, who board members vetted after developing a profile of the ideal chief executive. The incoming CEO would need to navigate John Muir’s clinical and management affiliations, cultivate physician relationships, identify underserved community needs and demonstrate strong business and financial acumen, said Kathleen Odne, chair of John Muir’s board.
Board members ultimately chose Mike Thomas, the chief transformation officer at John Muir, to succeed Knight.
“It creates such organizational upheaval if you don’t make the right choice. We would keep saying, ‘We have to get this right,’” Odne said. “Selecting the next CEO is arguably a not-for-profit board’s most important role.”
A wave of CEO departures is hitting the hospital sector as executives hope the worst of the pandemic has passed. But less than half of hospitals are fully prepared, research shows, portending a range of financial and organizational consequences, industry observers said.
More than 60 hospital CEOs left their roles through the first half of 2022, according to search firm Challenger, Gray & Christmas, although the data doesn’t differentiate between retirements, unplanned exits, merger consolidations or closures. That turnover rate marks a 48% year-over-year increase, and more departures are expected through 2023.
For example, Jefferson Health CEO Dr. Stephen Klasko retired in December, former CommonSpirit CEO Lloyd Dean retired in August, former Memorial Healthcare System CEO Aurelio Fernandez retired in April, MetroHealth System CEO Dr. Akram Boutros will retire at the end of the year and RWJBarnabas Health CEO Barry Ostrowsky is also set to retire at the end of the year.