Strategies for Hospital C-suite Organization

Philip Betbeze, for HealthLeaders Media , September 14, 2010
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He took the unusual step of dividing the functions among the rest of his team.


"I tend to give people things based on their individual strengths and their desire to lead those areas. I've gotten rid of a CMO and CNO. My previous CNO would not have had behavioral health, for example. My previous COO wouldn't have had cardiac services, which is a clinical line. Did I have confidence? I guess so. I had my very first meeting as CEO and I said, 'I have no idea what I'm doing so you have to help me.' We don't have to just do something because that's what it says in the book."

The biggest problem that he has with the way he's structured his team involves compensation. "The job descriptions don't match what I've put people in," he says. For example, Bob Allen, vice president of communications and government affairs, is also in charge of Crouse's geriatric service line. He championed the initiative, so responsibility for it became his, Kronenberg says. That nontraditional role has paid dividends, as recently Crouse was selected to participate in the prestigious Medicare Innovations Collaborative on geriatrics, which Kronenberg is excited about. "We're in there with Mt. Sinai and Hopkins and Geisinger, and we're this little community hospital."

While organizational structure is important—whether traditional or not—flexibility also matters.

Having replaced a CEO who had been at Greenville (SC) Hospital System for 44 years meant Michael Riordan, the current CEO, inherited a structure similar to most traditional hospital C-suites, but he has made some significant changes. The previous CEO had a COO, CFO, CNO, head of philanthropy, vice president of government affairs, CIO, chief human resources officer, vice president of strategy, and vice president of medical affairs, which now has about 550 employed physicians. Legal counsel was handled at a local outside firm.

"He had a lot of direct reports," Riordan deadpans.

The VP of strategy decided to leave the organization just before Riordan arrived, so he didn't fill that position. With five campuses and an equal number of administrators, Riordan made those administrators presidents of their campuses and began an effort to decentralize some responsibilities that had been controlled by the main campus and central office. He also changed reporting responsibilities to have those campus presidents report to the COO, as does the CIO, CNO, and vice president of human resources. He also hired the attorney from the local office to work solely for GHS.

"My sense was if we were going to grow, I wanted to set up enough flexibility so that if we worked with other [institutions], I wasn't locked into not having individuals functioning at a president level," he says. "The idea was that if in the future we were working with other hospitals there would be a peer network."
Rebalancing with clinical leadership

Given the increased emphasis many payers—not the least of which includes the federal government—are placing on clinical pathways, patient satisfaction, and readmission rates, many so-called "lay-CEOs" are eager to populate their C-suite with leaders who have a clinical background. Often physicians are recruited to fill these roles, chiefly because they carry authority as peers with a group of individuals that is traditionally very difficult to manage.

Before Laney came to Heartland, the system had a single physician leader in the C-suite, the CMO, and he had decided to leave to work for a larger system in Chicago as Laney was coming aboard.

"I elected not to fill that position," he says. Instead, he promoted multiple physician leaders within the Heartland Clinic to assume the duties, part-time, for which the CMO had been responsible.

"That has been a positive," he says. "Our physicians actually prefer to have me be the leader of the physicians. I have become—good or bad—the leader of the physicians and the one go-to person for high-level physician issues."

He attributes to that change the skyrocketing physician satisfaction scores. "We went from the 23rd percentile two years ago up to the 81st in nine months. They have really responded to the time I've been able to spend with them, and they've been really good about not abusing that. He attends the meetings of the Heartland Clinic, to which all 125 employed physicians are invited.

"It gives me a chance to share with them things I'm working on, so that they are in the know, and it's an opportunity for them to ask hard questions and get the direct answer from the CEO."

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