All Entries in the "The CEO's Chair" Category
Do Healthcare CEOs Matter?
The June issue of The Atlantic asks the question that is natural for the times: Do CEOs Matter? It’s part of the iterative set of questions that start whenever a set of leaders create enough missteps that their very existence comes into question. The author Harris Collingwood shares some new theories that CEOs in general have a negligible effect on company performance, are overrated in terms of their ability to motivate and in many cases the upside of a good CEO pales next to the downside of a bad one.
One example discussed has been the tie between the health of Apple CEO Steve Jobs and his company’s stock outlook. And even acclaimed CEOs may find that revisionist history is less kind to them, as GE’s success under Jack Welch may have had more to do with the 1990s economy than with a top-down corporate revolution revolution.
While the article was clearly aimed at multinationals and does not mention healthcare, I do wonder of we can paint hospital or health plan CEOs with the same existential doubt that their corporate counterparts now find themselves under. Healthcare leadership has all of the challenges facing any industry plus a few more, not the least of which is that people’s lives are part of the definition of organizational success.
There are numerous justifications for “why healthcare is different” other than the usual answer, “it just is.” Here are three: [more]
Fundamental Leadership Differences for “Smaller” Hospitals
In the top navigation of our home page, you may recognize that there is a Community Hospitals tab that takes you directly to our content written for the needs of smaller and independent hospitals. Our story today Safety Issues: Similarities, Differences Exist Among Small and Large Hospitals reminded me why we have that section in the first place: because leadership strategies in hospital leadership are often not scalable between the large health system and the small community hospital.
The story quotes a study from AHRQ that found smaller rural hospitals fared 22% higher than their urban counterparts when it came to communication between handoffs. While those in smaller hospitals may have some advantages when it comes to familiarity with staff and communications, they fall behind their urban, larger counterparts in the resources they have to dedicate to quality, and in the expertise level in quality and patient safety of their executive and trustee leadership.
We try to avoid generalizations when describing hospital challenges; after all, you treat a bedsore the same in the middle of Idaho as you do in New York City. But I have been in enough smaller hospitals to delineate a few common themes that separate smaller hospital cultural challenges from those of larger systems, including: [more]
Should a CEO Ask Employees About Cutbacks?
OK, so maybe it is grossly unfair to tag Beth Israel Deaconess CEO Paul Levy as being some sort of populist hero, but you have to respect the egalitarianism of his plan to let the system’s employees help decide how to find $20 million in savings. Few CEOs would dare to be so open about the process, and some management fundamentalists might even question whether a CEO should go so far in what has traditionally been a management function shrouded in secrecy.
Just last week, the heads of 13 medical departments collectively promised to donate $350,000 in an effort to avoid layoffs. Levy’s “Running a hospital” blog, has a collection of suggestions, including one employee who questioned the expenditure on complimentary umbrella bags in hospital lobbies. (The savings in patient safety are more than worth the minimal expense, Levy responded.) Levy is also extraordinarily transparent on the numbers involved, right down to the $80,000 average cost per employee. [more]
Community Hospitals and Stimulus IT
It seems to me that the real impact of the IT funds available under the Stimulus Package will be felt at the community hospital level: those hospitals that for a variety of reasons are not as far along in clinical documentation as they want to be. I asked Tom Stephenson, President and CEO of Healthcare Management Systems, Inc., which has 600 community hospital clients, how they see the law playing out.
“The high-level view is that for people who have been trying to get there, you now have a path, a timeline and a monetary picture to actually move,” Stephenson says.
Tom Stephenson, CEO of HMS
But how to move is going to keep IT vendors and consultants busy for years to come. “There are still some cloudiness around what you have to do, but the basic principles are there around the big picture functionality the hospital has to have in place and the framework to receive incentives. The folks we have been talking to over the last few weeks understand that their organizations have to get serious about rolling out some of these advanced clinical functions within the hospital.”
The key phrase of law that is subject to all the speculation right now is what is meant by “meaningful user of an EHR.” There is still not much to go on from HHS, but “there are a lot of assumptions going around that the HIMSS EHR model will be in play there,” he says. “Everyone is basing it on the assumptions that certainly you need to have your nursing documentation, CPOE, basic functionality like that in play in the hospital.”
For many community hospitals, two big obstacles may be time and infrastructure. Time, because, as he says, “only 10-15% of hospitals in this country have CPOE, and that is a lot of change to occur in roughly a year and a half.” And infrastructure because they may not have the servers, or even things like carts on wheels, to move forward.
Another unique challenge–which Stephenson is quick to add is not a negative but a fact–is that much of the certification process is driven by large academic medical centers. “They do not fully understand what it is like to go to a 50-bed hospital in the middle of nowhere.”
Grady’s Fight: You With Us or Agin’ Us?
New Grady Health System CEO Mike Young may not be a Southerner, but he is learning a thing or two about how to pick a fight in Atlanta. The first step in any scuffle is to knock the bystanders off the fence and see which side they fall on.
How else to explain a very public set of exposed loyalties in recent weeks. In December, after less than five months on the job, Young sent out a request to the Atlanta’s other non-profit hospitals to pony up $50 million as their share of the uncompensated care burden shouldered by Grady, which could face a 2008 deficit of more than $40 million. Two reasons that he already knew the answer before he asked: 1) Hospitals never share money and 2) The new Grady board led by former Georgia-Pacific CEO Pete Correll is full of Atlanta business and fundraising heavyweights who have been campaigning relentlessly for months, so I’m pretty sure they had asked before. [more]
The Dumb Things That CEOs Do
Merrill Lynch CEO John Thain is just the latest CEO to demonstrate a spectacular disconnection from the real-world consequences of an economy gone bad. Apparently he forgot to take any human relations classes while at MIT and Harvard.
Thain was tossed out of the merged Merrill/Bank of America after fourth-quarter losses were pegged at $15.31 billion, and amidst disclosures that millions in bonuses to Merrill executives were accelerated to take place before the deal with BofA closed three weeks ago. There are also reports that he refurbished his office for more than $1 million, including an $87,000 rug, and paid his personal driver more than $200,000 per year.
It would be overly optimistic to hope that this era of CEO arrogance is limited to a select few of the uber elite, or that Wall Street is the only road in America where the indifference still lives. We created an era–now hopefully ending–where CEO compensation was allowed to grow like a virus as long as our own investments and 401ks were kicking out double-digit annual returns.The difference between CEO compensation and the average worker grew past all reasonable boundaries of equity, to where now the S&P 500 CEOs in 2008 averaged $10.5 million, or 344 times the pay of typical American workers, according the the liberal think-tank Institute for Policy Studies.
Will the CEO as servant kill the CEO as hunter? Not voluntarily, it would appear. To expect corporate heads who have been rewarded in an era of unregulated predation to transform into wise stewards of our mutual resources is asking the dog to forgo the bone.
Healthcare had better not get too preachy, either. In an era of increasing scrutiny, regulation and transparency, a hospital CEO’s country club membership these days looks just as bad in the local paper as Thain’s rug does in the New York Times. There is no scale for perception. Excess is in the eye of the customer, and anything that looks lavish can bring down even those most secure.