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5 Things Every Wannabe CEO Needs to Know
Hospitals and health system boards are still looking for strong leaders, but what’s changing is the kind of experience you need to elevate to the top job.
So you want to be the CEO of a hospital or a health system.
Here’s the first thing to know: Like it or not, the role of acute care is slowly being relegated.
It’s still important, and it’s still a high-reimbursement area, but specifically because of that, scores of people and companies are trying to figure out how to use it less.
As a result, even in organizations where acute care represents the lion’s share of revenue, the competencies of today’s successful CEO range far from the acute-centric skills many hospital and health system executives and boards once prized.
All of today’s CEO candidates have to understand the critical interactions between the inpatient and outpatient realms, and the fact that delivering value rests on managing those interactions, not from maximizing patient census and inpatient days.
“Running a health system is about trying to provide coordinated care in an environment that’s patient- and family-centric,” says Jim King, senior partner and chief quality officer with Witt/Kieffer, a healthcare executive search firm.
Given the need to reduce reliance on acute care services, leaders who want to be CEOs have to learn skills applicable to the rest of the patient’s healthcare journey.
Courage: Critical Leadership Characteristic
Our new year is bringing ample challenges to the healthcare industry, from strategies to deal with the Affordable Care Act, to the realities that deficit reduction will require additional cuts in Medicare reimbursement to providers.
Congress is still in denial about the biggest problem with deficit spending – Medicare, but healthcare executives should not draw any hope that they will somehow escape the pain.
Cuts in payments inevitably will spark conflict on a national basis, as various healthcare groups bicker over how to divide the smaller financial pie. These “who wins and who loses financial conflicts” will almost certainly “trickle down” to local relationships between hospitals, physicians, and other providers. When money is involved, there will always be tension, and tension will lead to conflict.
This tension, and the conflicts that surface, will be the second biggest contributor to CEO turnover during the next five years, after the Baby Boomer retirement effect. Today, annual hospital CEO turnover is about 17 percent. I predict that will escalate to more than 20 percent in that five-year timeframe.
As I considered these probable developments, I began to rethink my beliefs regarding the competencies and ideal characteristics of the senior leaders who run hospitals.
As I thought about this over the holidays, I realized that the leadership characteristic that kept moving to the top of my list was courage. Yes, communication and relationship management, industry knowledge and business skills are all critical, as is integrity, but I think courage is very important.
These next several years will produce unprecedented change. This change, in addition to concerns about finances, will produce enormous unrest as we redefine how healthcare must be delivered. Hard choices, very hard choices, will be the norm.
These tumultuous times will require leaders who are smart, who possess a deep understanding of healthcare operations who are proven performers, and who are excellent communicators. But more importantly, these men and women must have the courage, the courage to promote innovation and change. They must possess the courage to do the right thing when, career-wise, it would be easier to take the easy way out.
The Hidden Dangers of Leading Change
People hate change. They dislike it so much that otherwise nice people will resort to some uncharacteristic behaviors — gossiping, lying and personal defamation against the person leading the change. This is a real threat to senior executives, especially those involved in organizational turnarounds.
Important progress can be slowed or derailed. Executive careers can be tarnished if not ruined.
This negative phenomenon is not new. In fact, evidence can be found in the Old Testament of the Bible. What is new is that we live in a digital age where malicious rumors and gossip can be spread, sometimes anonymously, over the Internet like wind-fed wildfire. It can blow up so fast that an unsuspecting, perhaps naive, executive can be tried and convicted before they are aware that the malignant campaign to discredit them even exists. Their attention, after all, is focused on more pressing issues.
Everyone has strengths and weaknesses, including the opponents of change, those who typically use a leader’s weaknesses to stop that which they distrust and makes them uncomfortable. Now here is where I think executives can and must do a better job in protecting themselves against repetitional attacks — they must become more self aware and to begin using the digital tools and modern communications strategies to their advantage. Unfortunately, far too many CEOs, especially those who engage in challenging business turnarounds, are so focused on their plan that they fail to insulate themselves from the inevitable pushback. In fact, it is surprising how many CEOs reject any involvement in social media activities until they have lost their job and are looking for a new one.
Years ago, during the course of a major CEO search, an extraordinarily qualified candidate disclosed a background issue that was potentially problematic. He was such a superb candidate that I refused to eliminate this individual from the field. I disclosed it to the board of directors and, with an open mind and the recognition of this person’s outsized talent, they asked me to vet the issue more thoroughly. In the end, he got the job. Ultimately we made the decision to disclose the background issue, no longer material to leadership performance, because we knew that those who would most certainly oppose the changes that had to be made — some entrenched employee groups — would use it against the executive when it inevitably surfaced. They would have attacked the leader using the information as a blunt weapon to slow or halt changes and they would most certainly have accused the board of an unconscionable cover-up. We neutralized that issue and this executive went on to lead a highly successful turnaround.
The advantage in this situation is that we knew about the issue and took action. Far too often executives are the last to learn that they are the targets of a smear campaign. They frequently find themselves in a reactive mode and that alone can aggravate the bad optics even more.
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California’s Health Care Workforce
http://www.chcf.org/publications/2017/08/california-workforce
California’s health care industry employed more than 1.4 million people in 2015. Five Almanac guides provide data on wages, education, and workplaces for selected health professions.
California’s health care industry employed more than 1.4 million people in 2015. Among these workers, nearly 55% were employed in ambulatory settings, about 25% in hospitals, and 20% in nursing or residential care facilities. An aging population, population growth, and federal health reform will likely contribute to increased demand.
This series of Quick Reference Guides from the CHCF California Health Care Almanac examines specific segments of the state’s health care workforce, focusing on pharmacists and pharmacy technicians, physician assistants, health diagnostic and treatment therapists, clinical laboratory scientists and technicians, and imaging professionals.
Among the trends:
- California’s supply of pharmacists grew 17% between 2012 and 2015, while the supply of pharmacy technicians increased by 8%. About half of the state’s pharmacists were trained in California.
- The number of physician assistants (PAs) in California grew 37% between 2012 and 2015. The Northern and Sierra region had more licensed PAs per capita than the rest of the state.
- The supply of occupational and physical therapists increased between 2012 and 2015, while the supply of speech-language pathologists decreased slightly.
- Between 2012 and 2015, California’s supply of clinical laboratory scientists remained stable while the number of medical/clinical lab technicians rose 11%.
The complete guides, as well as the 2014 editions, are available as Document Downloads.
When ‘gigging’ healthcare, providers must balance risk with cost
An explosion of innovative tech is disrupting the care-delivery model, aiming for both cost savings and better outcomes. Uber’s partnership with MedStar Health to reduce patient no-shows, a huge cost-sink, and the expansive potential of drones to fill healthcare infrastructure gaps in remote areas are just two examples of ways in which healthcare providers are setting out to provide better care at lower cost.
Cost-saving innovations have also begun to extend to the healthcare employment model — something notably risky when it comes to compliance. One program offers a solution to staffing issues that connects freelance nurses with open positions using an entirely digital platform in an attempt to modernize the business. Others have opted for more ad hoc hiring processes for IT and transcription talent.
Either way, the “gig economy” has reached healthcare — and it looks like it’s here to stay.
What does gig work in the healthcare space look like right now?
Healthcare providers have to manage an employee population with vastly different skill sets. But even in the diverse healthcare workplace, where special rules run rampant, some general guidance still applies.
Typically, the more specialized and trained the worker, the less likely they can be hired on as an independent contractor, Matt Stevenson, partner at Mercer, told HR Dive. And right now, most gig workers are on the lower end of the skill scale — especially in healthcare.
“Because of the way healthcare has been restructured, there’s been an explosion of employment at the low end,” Stevenson said. Increased calls for low-acuity care, like physical therapy and daily caregiving, have heralded the growth of contracted work. Convenience for both patient and provider also plays a part. Telehealth (while not specifically contract work, usually) allows doctors to sign up for specific hours to treat patients via phone or video, while digitization lets those doctors keep all records securely online. It brings a flexibility few office jobs can compete with.
Another bonus: cost.
“Incentives are changing,” Stevenson said. “You are now paying for results instead of the hospital getting paid more for you being in the hospital longer.”
As providers seek better outcomes for a lower price, contract work plays a pivotal role in improving care but keeping barriers low for patients. Caregivers can visit homes and encourage patient compliance, such as taking medicine and completing physical therapy, and hospitals can hire those workers on a job-to-job basis, which is cheaper overall.
Providers must keep liability in mind when hiring out independent gig work, however. Hospitals in need of on-demand talent often retain nursing agencies that take on liability, employee background checks and other major risk issues in exchange for hefty fees. Independent workers tend to be cheaper, but come with much higher risk.
Managing liability and questions of quality
Classification is a perpetual headache for employers in many industries. Simply calling someone an independent contractor doesn’t cut it, Shanna Wall, labor law attorney at ComplyRight, said. Nationally, employers have to satisfy a slew of tests under regulations from the IRS, the U.S. Department of Labor and individual states meant to protect workers from exploitation. Courts have been in on the action, too.
Most tests balance on one key question: How much independence does an individual worker have? More specifically, does an employer focus on a result alone or the job itself? Is the worker using their own equipment and deciding their own hours, or is an employer dictating that? The more control an employer has, the riskier independent contractor classification can be.
But that’s not all. Medical personnel have to deal with strict laws on private health information, such as the Health Insurance Portability and Accountability Act (HIPAA). Contractors must be trained on what those and other rules require.
“How do you ensure the quality of care provided by the gig person is okay?” Stevenson said. “How do you keep costs down but ensure quality? You may pay $15 an hour, but that is low for healthcare.”
Worse, if something goes wrong, the provider is on the hook. By giving jobs to outside workers, providers risk losing strict control over the quality of care and, in the long term, their brand. Employers already struggle to gather data on full-time employees. Gathering data on the success of gig workers is even tougher, since the very nature of the relationship is fairly low-touch.
That’s partly why the agency model has lasted for so long, as they take on most of those risks and give hospitals the ability to up- or downsize when needed. But the costs are real.
In the future: Outsourcing some jobs but not all
For that reason, employers may want to consider their needs on a sliding scale of risk versus efficiency. Joint employer cases are still working their way through the courts. Uncertainty remains the rule of the day. “It’s always best practice to err on the side of an abundance of caution,” Wall said.
As far as the future goes, that uncertainty renders predictions suspect. Digitization has encouraged the contracting out of some support services, including diagnostic work such as radiology. As long as a radiologist has an internet connection, they can read a scan and send their analysis from anywhere.
Innovation continues in the on-demand non-emergency medical transportation space, too. Circulation, a Boston-based provider of medical transportation, recently raised $10.5 million in a funding round that included participation from leading names in healthcare such as the Boston Children’s Hospital, Humana and NextGen Venture Partners. Experts believe that ride-share partnerships could save billions of dollars usually spent by Medicaid.
But as more employers focus on ways to engage employees, contract workers will largely remain outside those efforts, Stevenson said. Gig workers usually seek independence for a reason, be it the flexibility of hours or ability to set their own pay. They prefer autonomy, and don’t want to be bogged down in HR processes.
“If I really cared about engagement, I would bring them in-house,” Stevenson said. But as long as demand is high, treatment of contract workers will have to remain top notch to keep a steady flow of candidates in the pipeline.
The influx of independent work has enabled unprecedented flexibility for workers and access to talent for employers. But above all, employers must be wary of the risks to truly enjoy the perks of independent contracting.
“You think you are safe from compliance because they are gig workers, but really, it’s the opposite,” Wall said.
Wanted: Leaders for tomorrow’s emergency room
http://www.healthcaredive.com/news/wanted-leaders-for-tomorrows-emergency-room/448757/
A conversation with Bill Haylon, CEO of Leaders For Today
Economic anxieties need not correlate with a high unemployment rate. Take it from business leaders across multiple U.S. industries: Their biggest challenge is not a lack of job openings for thousands of qualified candidates — it’s a lack of candidates for thousands of openings.
HR professionals are used to hearing about skill shortages in manufacturingand other blue-collar work, but perhaps more understated are gaps in the STEM fields.
Careers in nursing and medicine, which often require years of additional, specialized education are hard to fill. Physician assistant openings were one of the most in-demand fields near the end of 2016, according to the American Staffing Association. But hospitals aren’t just struggling to find people to staff operating rooms. They face a much bigger challenge in a lack of leadership skills.
HR Dive/Healthcare Dive spoke with staffing firm Leaders For Today’s CEO Bill Haylon about the root of leadership gaps in healthcare, and how hospital HR departments can confront the problem. Our conversation has been lightly edited for length and clarity.
HR Dive: When hospitals come to a healthcare staffing firm like Leaders For Today, what are they asking for?
Bill Haylon: What we’re really doing is helping them find people who have particular sets of skills. We provide staffing on an interim basis. A hospital or healthcare system comes to us and says, “we really need somebody who can fix and lead our case management department,” “we need somebody who’s got certain technical skills and leadership skills.” We’re not actually training individuals, we’re finding people who fill those slots.
We’re going out and finding people, who they can either hire full time or on an interim basis. We’ll look for, on average, a little more than six spots, and we’ll start from a pool of people that we have that we’ve worked with before.
We’re not really doing training, but training is one of the problems in the healthcare world.
HR Dive: When you look for potential staffers, what kind of skills do they have? What stands out the most to the healthcare systems you work with?
Haylon: There are certain skills that go across all positions, and there are certain skills that are specific to a position because we can hire for. For example, we have a team that focuses on OR people, while others focus on case management, hospital finance, physician management, practice management, etc.
Across the board, what we focus on is, first and foremost, trying to find people who have been steady with or who have stayed with an organization for some period of time and developed within that. In other words, we try and stay away from what we call “jumpers” — people that have a job for a year, two years, and then try and go on their next role.
Unfortunately, that’s counter to what occurs in the industry. People in the hospital industry jump all the time.
We try and get some stability in their job, because we believe they learn more that way [when it comes to] both the technical skills and leadership skills. Of course, you look for the basic things: education, undergraduate work, master’s degree and other certifications.
You’re trying to vet the person along, so a lot of time you’re talking about different situations, different experiences, how they’ve handled them in the past or how they might handle them in the future. It could be a difficult position to deal with, a union situation, a quality situation, a safety situation. And you try to understand what their thought-making process is.
HR Dive: What skills are hardest to come by in the medical world, given that a lot of industries are seeing skills shortages?
Haylon: There’s an enormous shortage of talent within the hospital industry in all key levels. It was going on before Obamacare, and now with Obamacare and more people being covered, each organization is seeing a big uptick in the number of patients they see. It’s really gotten to be a very critical moment.
The most difficult job category is the O.R., the second hardest is case management and the third hardest is physician practice management.
From a skill set perspective, it’s leadership. Most of those in leadership positions are people who were nurses or doctors. When you go to school, you do not learn about financial statements, management skills or leadership. You’re learning how to suture, avoid infections and open up rib cages.
You take a person who has been a staff nurse for [a certain number] of years, and they decide they want to go into a leadership role. Because there’s a shortage of people, they are put in those spots well before they’re ready. They don’t have any training; hospitals do not train people for career development or leadership, and so you’re just kind of winging it. You get people who are very quickly over their head in their positions.
HR Dive: What can hospitals change about the way they operate to help develop those skills, or is that simply not possible given their bandwidth?
Haylon: They make it harder than it is. The reality is that hospitals consolidate, so they’re parts of bigger systems. You have a director in the O.R. who could be managing 440 people. That’s a lot of people. This was the case for one hospital we worked with, and the person running that OR had been a staff nurse and morphed to this role. But her [previous] role had been running a small hospital where she had 30 people, and now she’s up to 440 people, and it’s over her head.
So the reality is that they need to start thinking about different skill sets, and the obvious one is an MBA. When you’re the director of a 440-person O.R., you’re not seeing patients anymore. You’re doing hiring and scheduling. You’re developing quality programs and safety programs. You’re trying to get the surgeons on board. You’re never seeing a patient; that’s a different set of skills.
You don’t need to be clinical, you need to be a manager and a leader. It could be an MBA, it could be a master’s in health. But you need more than clinical training.
So what hospitals do [by recruiting for a certain skillset] is totally reactive as opposed to being proactive and developing people.
HR Dive: Do you see a shift in terms of the skills that physicians and other professionals are being taught in school?
Haylon: You’re being taught technical skills, clinical skills, whatever your specialty is. You go to medical school, do your residency, maybe followed by a fellowship, and it’s all technical skills. Physicians [are also] getting way more specialized than they used to be.
Typically the people who have jobs [in healthcare leadership] have gone and gotten additional training and education on their own.
Physicians and nurses are not trained in school to run big organizations. Plus, they’re doing research, and they’ve got to handle anybody that comes into the OR and the ER. It’s hard enough to get training for it, and it’s beyond belief if you don’t have training.
HR Dive: What else should hospital systems be mindful of when looking for leadership in the medical workforce?
Haylon: When you look at survey data from across the hospital industry, you see that people are staying in positions for incredibly short periods of time. Forty percent of people right now in key positions in hospitals have been in their position two years or less. Another 40% expect to leave in the next two years. What happens is that hospitals have a hole, and they need better leaders, so they poach from somebody else.
So the director of a surgical department will be a manager at a small hospital, then become a manager at a bigger hospital, then a manager at a bigger hospital, then a director at a small hospital, then a director at a bigger hospital, and finally a director at a bigger hospital. They just keep poaching from each other.
The problem is it’s the same people who are circling through. The people you’re hiring never had the time to put in place good, quality programs, [including] safety programs and productivity programs, because they’re not there long enough. They can’t make it stick in just two years; these are very complicated things.
And so that’s the result of what you’re talking about. The lack of training and development shows itself in this poaching and job hopping in the hospital world. It is like no industry you have ever seen before.
In other industries, an enormous amount of resources are put into training, so people stay in those industries and move up. You take up greater responsibilities, but they invest a lot in you as a developing person. The hospitals invest almost nothing. It’s up to the individual to go and figure it out on your own. Get your MBA, take this class, get a certification from the hospital association. But you’re not developing your own people.
Other organizations develop their own people because they want to be the best at what they do — they want to differentiate themselves. The only way they can do that is to develop their own people. Because hospitals don’t do that, there really is no differentiation, and hence, they struggle.
So this lack of training and the lack of development ends up creating an industry where everybody knows they’re going to jump all the time. You’ve got hospitals that have hired their sixth CEO in seven years. So the question is: If you’re a patient and you have knowledge of this, would you want to go to that hospital?
If you have that sort of instability at the top spot, then it’s going to trickle all the way down. Healthcare is complicated; it takes a while to figure out orders in place that are going to work. If they have quality problems, or safety problems, you can’t fix them that quickly. You’ve got to have someone who understands the lay of the land and can make a difference.
Stop Hiring for Cultural Fit and Start Hiring For Cultural Fitness
Culture is the glue that brings a team or organization together. But if the glue is too sticky it can make them stuck instead of making them stay together. Cultural fit can become a limitation rather than a strength.
Which takes me to the topic of hiring the right talent for your organization:
Do you hire people that are a cultural fit?
Or do you hire to improve your culture fitness?
Culture is something dynamic
The notion that people can or can’t fit into a specific culture is, to at least some extent, at odds with the fluid teams organizational structure. Cultural fit as an operating requirement not only forces new employees to adapt but, also hinders your culture’s ability to be influenced by outsiders. It limits its ability to grow.
When interviewing people, I do care about cultural fit, but I also look for culture disruption. As I like to tell candidates: “I want you to be influenced by our culture but, most importantly, I want you to challenge and influence our culture too.”
Cultural dynamics involve an ongoing struggle between old and new elements. If you only stick to what fits your existing culture, your organization will get stuck. Yet, if you only care about the new shining object, you might be throwing away core elements of your culture just for the sake of change.
Before practicing any competitive sports, we need to prepare our body. We stretch our muscles and warm up, not just to avoid injuries, but also to make sure we can play to our highest potential.
The same is true when confronting change. Just like with sports, you need to stretch your organizational culture. It needs to prepare, to warm up, to be ready to adapt to an ever-changing world.
Hire for cultural fitness
When evaluating candidates, choose those that will make your team grow. Stretch your culture by hiring people who will make it more adaptive, experimental and resilient.
Here are some considerations when hiring for cultural fitness:
- Amplify your team’s perspective:Hire people with diverse backgrounds, skills and personalities to avoid biases and so you are drinking something more inspiring and refreshing than your own corporate Kool-Aid.
- Encourage teams to dissent:Promote differences and tensions, not just affection. Dissent is not comfortable for everyone, but is the only way to avoid group thinking and stretch your team beyond its comfort zone.
- Continuously challenge your culture: Hire opinionated people, hire outsiders or hire from outside your industry. Bring someone with the right talent, but goes against your culture. Shaking things up from time to time will keep your culture in good shape. As I wrote here, misfits are the best option for energizing a team.
- Promote diversity of thinking not just demographic diversity: Train your team to embrace difference of opinions. The more heterogeneous the members, the more interesting and productive the team. Being more open to people from different walks of life will provide fresh eyes and make the team smarter. It will help solve for the “demographic” diversity needed too but with a purpose.
Diversity takes training
The real problem behind diversity is that teams are not trained to deal with differences of opinions. Managers and team members alike have been trained to think and behave the same: the corporate way. People are expected to accommodate rather than to challenge the status quo.
One of the key issues of bringing “diverse” people to a team is that they see things differently. They challenge things through their fresh eyes. And not every organization and manager can swallow that.
Here are some points to help embrace diversity to improve cultural fitness.
- Diverse means different not inferior: Conversations around diversity need to shift from quota to curiosity. Instead of thinking how we can provide a certain demographic with opportunity — a hierarchical approach — we need to ask what we can we learn from people that are different from us. Diversity is about becoming better at interacting with those who can provide fresh eyes and challenge the way we operate.
- Quotas limit rather than provide opportunities: Establishing percentages to have representation from different sectors might come from a place of good intention. But, in most cases, it misses the point — the need to create a balanced team. I’ve seen many companies that use quotas, simply to check the box and appear to be a good corporate citizen. But they have little commitment to embracing diversity of thinking.
- People are more than a demographic: Being part of a minority (age, gender, sex preference, etc.) is just one aspect of any person. Our identity is more complex than our religious or sexual preferences. Those do play an important role. But who we are is a composite of multiple factors: our origin, experience and dreams. Organizations need to encourage their teams to see people beyond their demographics.
- Encourage transparent conversations:Trust is the basis in which all emotional transactions are done. And is one of the most powerful elements to keep culture alive. Conversations around diversity are still too controlled. Organizations need to discuss these things more openly. Help people realize we are all different, not just those who don’t belong to our tribe. Creating experiences where people can share their journey or their personal hobbies and passions can definitely spark curiosity and show how that everyone can learn from each other. Creating a culture of transparency can help reposition diversity as learning.
Why cultural fitness matters to me
Everyone can learn (almost) anything. And anyone can adapt to any corporate culture. It can be hard or tough but smart people always adapt.
What I care the most, is how a new hire can help make our organization smarter. This is my checklist of what I look for:
- They are smart and talented
- They possess the ability to adapt to change
- They are genuine and have a voice of their own
- They are open to learn
- They are generous rather than selfish
If they score well in the above, then they will definitely help our culture stretch, regardless if they are – today — the right cultural fit.
One last thing. I always like to ask candidates: “What are you bringing to the table that is unique?” Basically, I want to know not just what that person is good at but how they will help make our organization smarter. I want people who will build and strengthen our cultural fitness.
HENRY KOTULA 