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Implications of Health Reform for Healthcare Executive Positions: a National Study of Senior Leadership Teams in Freestanding Hospitals

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Implications of Health Reform for Healthcare Executive Positions: a National Study of Senior Leadership Teams in Freestanding Hospitals Career implications - 1 Implications of Health Reform for Healthcare Executive Positions: A National Study of Senior Leadership Teams in Freestanding Hospitals Final Report: Oct. 24, 2014 Prepared for the American College of Healthcare Executives by Andrew N. Garman, PsyD, MS Professor, health systems management, Rush University Cassia Carter, MS Research Assistant, Rush University & Doctoral student, industrial/organizational psychology, Illinois Institute of Technology Career implications - 2 Introduction The evolution of the U.S. healthcare environment is bringing with it unprecedented changes to the healthcare management profession. This evolution is likely to yield many opportunities for career-minded healthcare managers, but can also make career planning more confusing. With new titles featuring phrases such as “experience officer” and “population health” appearing on the horizon, as well as more titles beginning with “chief,” sorting out which of these represent robust career paths, and which may be temporary phenomena, can seem daunting. To help shed light on the changing nature of healthcare executive career paths, the American College of Healthcare Executives partnered with researchers at Rush University to develop and implement a national survey to examine the changing nature of senior leadership teams, focusing on freestanding community hospitals as a starting point. Prior to describing this research, some historical context and definitions will be helpful. Healthcare Management: A Profession in Transition The U.S. Bureau of Labor Statistics (BLS)’s Occupational Outlook Handbook (2014) defines the medical and health services manager’s role involving the planning, directing and coordinating of medical and health services. This definition encompasses both executive leadership and healthcare management at other levels. According to BLS estimates, there were approximately 315,500 people working in healthcare management in the United States in 2012. Given the considerable volume of merger and acquisition activity in the health sector, it may seem logical to conclude that the number of healthcare management positions will shrink. However this conclusion does not take into account the extent to which organizational change creates new management needs. For example, prior research from other industries suggests in times of environmental uncertainty and sector-level change, senior leadership teams in particular tend to expand rather than contract (Haleblian, Jerayr, & Finkelstein, 1993). Indeed, the BLS estimates the healthcare management profession is likely to grow by about 23% between 2012 and 2022, much faster than the national average for jobs generally. Healthcare Management in the Context of Health Reform Regardless of this growth, the level and pace of change in healthcare is unprecedented (American College of Healthcare Executives, 2014), which may translate into a much larger proportion of job transitions than has historically been the case. Growth is also unlikely to be uniform across the healthcare management profession, let alone individual organizations. Some specialties may grow steadily in the years to come; demand for others may grow rapidly during the height of the transition from volume to value and then halt or decline afterward. In each case, the balance of talent supply as well as demand will influence how robust a specific career path will become. Career implications - 3 The present study was pursued to help shed light on some of these transitions within the healthcare management profession. Using a survey of ACHE-affiliated CEOs from freestanding hospitals, we sought to address three research questions in particular: 1. What job titles and roles are most frequently found within freestanding hospitals’ senior leadership teams? 2. How are these positions changing over time? 3. How often are “Chief” and “top officer” jobs within these organizations found on senior leadership teams, vs. reporting to the CEO but not on the senior team, vs. neither? Methods Survey design The survey used in this study was part of a larger project ACHE conducted on behalf of its CEO Circle membership, to understand the changing nature of senior leadership teams (SLTs) within freestanding hospitals (Athey & Garman, 2014). Three sections of this survey asked respondents to systematically describe the members of their SLT, their direct reports who were not SLT members and anyone else in their organization carrying a title containing “chief.” Respondents were asked to provide two descriptors for each of the SLT members they identified. First they were asked to provide a job title and next to identify one or more roles as appropriate to that person’s responsibilities. The survey was prepopulated with 18 role codes commonly found among senior executives. Respondents could also write in up to two “Other” codes if they had SLT members with substantive roles that were not captured by these 18. Survey Sample and Distribution Our survey sample was identified by staff of the American College of Healthcare Executives, who queried their member database to identify all members who were currently listed as CEOs of freestanding hospitals. A total of 949 individuals with deliverable addresses were identified. Surveys were distributed to these members via two rounds of post mail during October- December of 2013. Completed surveys were mailed back to ACHE, who keypunched responses into an Excel file according to a prespecified coding protocol. Individual responses that did not readily fit into pre-existing coding categories were discussed among ACHE and Rush staff until consensus on coding was reached. Results A total of 479 surveys were completed and returned, representing a response rate of 49%. Of the CEOs responding, 84% indicated they had a master’s degree in either health administration or Career implications - 4 another administrative area, 12% had a nursing background, 2% had an MD or DO degree, 5% had an “Other” clinical degree and 5% had a doctorate in health administration or another administrative area (note: respondents could indicate more than one area in their educational background). Of the 479 responses, ten were removed from the sample because the respondents’ organizations had been reclassified as systems since the original sample was drawn. Of the remaining respondents, 39% worked for (non-federal) government hospitals; 59% for not-for-profit hospitals, and 2% for investor-owned hospitals. 4% of respondents’ organizations were Council of Teaching Hospital (COTH) members; 2% were critical access hospitals. In terms of core based statistical area (CBSA), 10% were located in divisions, 34% were located in metropolitan areas, 26% were located in micropolitan areas, and 29% were located in rural areas. Respondents averaged 7.8 years in their current CEO position, with the majority (83%) having a master’s in health administration. Job Titles and Roles Across the 469 respondents analyzed, a total of 2,711 unique individuals were identified as members of a senior leadership team (SLT), of which 2,689 were assigned job roles by the respondents. These individuals had 1025 unique job titles. In other words, each SLT contributed an average of 2.2 unique job titles to the total. To better identify meaningful patterns across these positions, we needed to reduce title variance by grouping titles into broader categories. With the assistance of an executive with expertise in healthcare leadership position design, a coding scheme containing 81 categories was developed and then used to group all job titles. The full title coding sheet can be found in Appendix A. Current Composition of Job Titles on Hospital Senior Leadership Teams To address our first research question, we analyzed all of the titles of individuals that respondents identified as members of SLTs. The three job title categories most frequently present on SLTs were CFO/VP Finance (16.8% of all job titles for positions included in SLTs), Chief Nursing/CNO (12.1%) and Human Resources (HR) (10.0%). Of the 2711 total SLT jobs, 8% had two or more job titles assigned to them (e.g. “SVP, COO & CNE”). Table 1 provides the job titles with the highest frequency of occurrence on SLTs; complete results can be seen in Appendix B. Career implications - 5 Table 1. Job title categories comprising at least 1% of the total job titles senior leadership teams (SLTs) of freestanding hospitals % of all Job Titles Job Title Count on SLTs CFO/VP Finance 455 16.8% Chief Nursing/CNO 327 12.1% Sr HR/ Personnel 271 10.0% Dual Titles 217 8.0% COO/Hospital Operations 193 7.1% Chief Medical Officer 131 4.8% IT Director/CIO 129 4.8% Chief Quality Officer/Risk 108 4.0% VP Patient Care 60 2.2% Physician Services/ Medical Staff/Medical Services 59 2.2% Ancillary Director/Support Services 58 2.1% Medical Group / Physician Networks / Physician Group /Practice Manager/ PHO / Clinic 52 1.9% Philanthropy/Foundation Director/ Fund Development/Endowment 49 1.8% Chief Admin Officer/CAO/Administrator 45 1.7% Business Development/Growth 43 1.6% CEO/President 37 1.4% Legal/General Counsel 35 1.3% Clinical Services VP/ Chief Clinical Officer 34 1.3% Marketing/PR 34 1.3% Compliance/Integrity 28 1.0% Medical Affairs 27 1.0% Strategy/Strategic Planning 26 1.0% How SLT Jobs Are Changing Survey respondents were asked to identify changes to their SLTs over the past two years, as well as the planned additions or subtractions of SLT members during the course of the next two years. Table 2 reports the largest net changes in job
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