What Traits Mark the Ideal Healthcare CEO?

Hospitals & Health Networks (H&HN), a publication of the American Hospital Association (AHA), featured an article this month on the traits needed to be a successful CEO in today’s environment. This week, in the second part of a two-part blog post, we’ll look at some of the new challenges and the new skills needed for success.

The ideal CEO must be data-driven. Paul H. Keckley, managing director for Navigant Center for Healthcare Research and Policy Analysis, says that hospital performance data is now available to both buyers and patients alike. Today, more and more insurers are using these commercially available analytics, so it is important for CEOs to be familiar with such data also.

CEOs must be motivated to take action as well. Peter Rabinowitz, executive recruiter and president of P.A.R. Associates Inc., says that when a board wants to rationalize the organization, a CEO may be tasked not only with building the organization up but also taking people out when needed. While a changing healthcare environment sometimes means layoffs, there are other times when employees can simply adapt to new roles. For instance, Scripps Health in San Diego underwent complete operations reorganization and saved hundreds of millions in costs, all without a single layoff.

Clinical competence is another quality CEOs must aspire to. Boards will frequently look to physicians as ideal CEOs, but this might very well be a mistake according to Phil Dalton, senior vice president of physician strategies at VHA Inc. “They [physicians] are highly intelligent and talented, but their experience is generally not in running organizations,” says Dalton. Michael Rowan, president for health systems delivery and COO at Catholic Health Initiatives, says that nurses are often far more likely to have the management background to take on such a leadership role.

Financial focus is another especially important skill in light of the realities of declining Medicare payments and the recent requirements of the Affordable Care Act. “It means having to think about efficiency across the entire spectrum of care,” says Carol Geffner.

Geffner also pointed out the importance of matrix management. Traditionally, hospitals are vertically organized into departments: radiology, cardiology, etc. However, now that hospitals are changing, Geffner says that horizontal structures are being created as well. “Now that hospitals are becoming health systems, they have to have not only these vertical structures, they are creating horizontal structures,” Geffner says.

Resolving conflict is another vital skill, since change is constantly afoot in healthcare. Leonard J. Marcus, founding director of the program for Health Care Negotiation and Conflict Resolution, says that two steps are needed to change conflict to consensus. First, he says fears must be acknowledged and addressed as they crop up. Secondly, he says that it is important to find ways in which the organization can meet everyone’s common interests in some form or another.

Agile learning is another skill that all CEOs must have and it might very well be the most important skill. At Korn Ferry, the world’s largest executive search firm, learning agility is actually considered the leading predictor of success in leadership.

Finally, strategic vision is critical. While innovation and creativity ranked very highly, strategic planning and critical thinking were listed as the top skills needed to lead in the world of health systems in the coming years.

To learn more, visit the AHA’s online publication, Hospitals & Health Networks: http://www.hhnmag.com/Magazine/2015/June/cover-new-health-care-CEO