The Role of the CEO for Healthcare Industries
Any top-level managerial job where the position requires being responsible for a large, complex organization is challenging enough on its own merits. With the changes in healthcare, CEOs in the healthcare industries are finding their jobs to be exponentially more difficult. They must manage tight margins, navigate a strict regulatory environment and contend with an increasingly diverse workforce. All of these pressures meld together within the rapidly changing healthcare industry.
The Role of the CEO in the Healthcare Industry
Many duties and responsibilities fall under the role of CEOs working in the healthcare industry. As with CEOs in any other industry, hospital CEOs need to strike a good balance between managing the many departments and daily operation and following the board’s initiatives and strategic plans.
Related to responsibilities to the employees, the CEO must oversee the Human Resources Department in their duties of hiring and retaining staff, and making sure they have the necessary education, credentials and experience. To retain qualified staff, the CEO must create and model a positive culture and encourage productivity.
CEOs are expected to oversee compliance with state, federal and CMS regulations and to relay compliance measures to the board of directors.
Working with other senior managers, the CEO is responsible for setting and following standards for excellence in operations and implementing policies and procedures. Part of this responsibility entails monitoring the hospital’s finances for steady growth.
In essence, the role of a CEO in the healthcare industry requires the executive who holds the position to ensure that almost every aspect of the healthcare facilities under their care perform efficiently while ensuring that all employees have the equipment and resources they need to deliver the best quality patient care.
Successful CEOs know that they need to network with other medical and business professionals within the community. In recent years, the rapid changes taking place within the healthcare industry are forcing the way CEOs approach their jobs. In some cases, the changes are forcing a shakeup in the types of people that healthcare boards hire to tend to the organization’s needs.
Changes in Healthcare Are Changing Role of CEO
Within the current healthcare system there’s been a greater push toward patient-centered care and value-based reimbursement. This is a vastly different approach than in past years where hospitals made the bulk of their profits in performing operations.
The changes in how insurance companies reimburse providers for their services is creating a greater push toward integration and coordination.
The only way that healthcare systems can survive the changes is to combine forces, which is why we’re seeing so many mergers and consolidations in the healthcare industry. Collaborating and creating new partnerships is the only way that hospitals can streamline their operations and minimize risks.
While partnerships make it easier to control each area of medical care, interweaving providers and services create greater complexity for CEOs than ever before.
CEOs have been forced to redirect their focus from generating profits for hospitals to managing the complex web of people and services. Today’s focus points more directly on the physicians and clinics than at the hospitals. CEOs must keep the big picture in their purview. They need to be mindful of the fact that the hospitals of today are more cost centers than profit centers.
The CEO’s workday consists of working on clinical alignment and trying to create cohesiveness when pulling systems together.
Healthcare Reform Is Transforming the Needs of Leadership in Healthcare
The changes in the way healthcare institutions conduct their affairs is creating change in the way that CEOs perform their duties. They still need the usual managerial, leadership and communication skills.
Today’s environment requires even more than that. CEOs in the healthcare industry also need to be thought leaders, influencers and innovators. They need the ability to be open to the ideas, innovations and best practices that have proven their worth in other types of industries. New duties in their role require them to build and sustain relationships with stakeholders and leaders inside and outside of their industry.
CEOs in today’s healthcare industry are building technology and health systems that are designed to serve the unique populations of people living in their communities. For communities where citizens can’t get to health providers, creative CEOs are sending vans out into the community to treat their patients and to educate them about the importance of wellness. Healthcare of today places a much greater focus on preventative and holistic health.
Prudent and wise CEOs understand that it’s no longer possible to provide healthcare in silos. Healthcare systems need to partner and collaborate with one another to limit unnecessary care and to create consistency of care.
Today’s health systems have stronger partnerships between clinical systems and operations. Leaders and managers in those systems stress the importance of the relationship between physicians and patients.
Healthcare Reform Is Transforming the Leaders in Healthcare
Some boards of directors are seeing the value in hiring physicians as CEOs because of the extensive need for provider collaboration. Physicians who fill CEO roles take their positions with built-in credibility. They share an understanding with other providers around what it means to care for people with healthcare needs.
Physician CEOs are also people who understand the challenges in how healthcare reform affects compensation for physicians. In many cases, doctors are happy to provide value-based care. Not surprisingly, they want to be paid better for caring for patients who are enrolled in value-based systems.
Many physicians would be happy to have one foot in the fee-for-service door and the other foot in the value-based healthcare programs door. Of course, they’d like to be equally compensated for both.
As for physician CEOs, many doctors are willing to step into CEO or other senior leadership positions. However, it’s difficult to find doctors who have the physician credentials and who also have what it takes to serve in a senior leadership role.
Overall, most healthcare experts seem to feel that the healthcare systems are finally moving in the right direction. A 2011 study showed that hospitals run by physicians scored 25% higher in quality care outcomes and patient satisfaction than hospitals run by traditional CEOs.