Growing demands for quality, safety, effectiveness and economy require hospital strategies with ever more moving parts. Making sure they all work smoothly together is the chief operating officer's main task. "The job has become much more demanding," says Thomas C. Dolan, president and CEO of the American College of Healthcare Executives. "You are responsible not only for care inside the institution, but also for the health of the community as a whole."
This means mastering operational issues, including coordinating hospital care with physician offices and long-term, rehab and home services. It also means managing population outcomes and financial risk, and possibly administering global payments.
All this requires changing from vertical reporting to horizontal teams that collaborate across departmental, professional and even corporate lines. "To be a good COO, or any good C-suite executive, you have to understand matrix reporting and how the needs of local providers and the corporation interrelate," says Thomas J. Giella, managing director of health care services for recruiter Korn/Ferry International. "You've got to be nimble and know how to work through the system. This is new territory for some stand-alone hospital people,"
COOs need a firm grasp of sophisticated process improvement techniques, such as Six Sigma, and standardizing operations across facilities, says James R. Smith, consultant with the Camden Group. "If you can do a procedure in five steps instead of 40, you cut costs and the opportunity for error."
Greater emphasis on clinical outcomes, patient satisfaction and partnering with physicians creates opportunity for executives with clinical backgrounds, says Mark Madden, vice president, executive search, for recruiter B.E. Smith.
"We are seeing more diversity in the role," Madden says. "It's important for the COO to bring experience in physician relations, joint ventures and employment models. Balancing employed and independent physicians on the medical staff day-to-day can be challenging."
Most important, an effective COO must lead a team where the CEO and board want to go, says Peter Rabinowitz, president of recruiters PAR Associates Inc., asserting that, "Hospitals hire executives for what they've done and fire them for who they are. The COO needs to fit with the team and the mission."
Here are four COOs who are applying their skills to address the challenges of today's health care environment.
'You need a wide array of competencies'
| senior vice president, Genesis Health System, Davenport, Iowa, and president, GMC, Illini campus, Silvis, Ill. | Spyrow directs daily operations at 150-bed GMC, Illini campus, two senior living centers, three critical access hospitals and outpatient sites in Illinois and Iowa. Before joining Genesis in 2008, she served in senior operating positions and as corporate counsel for Trinity Regional Health System, Rock Island, Ill.
Ten years ago it was more important to have hands-on clinical knowledge. Today it's more important to get as many experiences in as many roles as you can. That perspective makes you a better leader. You need a wide array of experiences and competencies to succeed as a COO.
My experience as a system corporate counsel gave me two skills that I use continuously. The first is the ability to take complex situations and drill down to the important issues. It helps my team focus on the core elements of a project. Second, it has given me insight into physician transactions and how to work through issues to arrive at a mutually agreeable outcome. Genesis currently has three physician joint ventures, contracts with physicians to manage or co-manage services and employs about 180 physicians. We are developing an ACO that will allow us to work with physicians in managing health across the entire care continuum.
From outpatient operations I learned about matrix reporting and the art of influence. In outpatient services, collaboration combines with extreme entrepreneurism.
Leaders influence but don't control the entire spectrum of care. You work together as a team. Leaders have to be humble and listen to other ideas and align interests. Integrating operations across the entire spectrum of services requires this skill. It is not as hierarchical as a traditional hospital.
Goals are same, but scope of job is changing
William P. Santulli | executive vice president and COO, Advocate Health Care, Oak Brook, Ill. | Santulli oversees operations at 12 acute care hospitals and 250 ambulatory care sites in Chicago and central Illinois. Before his promotion to system COO in 2003, he served as chief executive at Advocate Good Samaritan Hospital, COO at New England Medical Center and held leadership positions in Iowa, Los Angeles and Washington State.
At one level, the COO role hasn't changed dramatically. Three goals remain constant. First, I make sure the organization is focused on safety and clinical results; second, that we are building a strong service culture and getting results; and third, that we are producing strong financial results.
What's changing is the scope. Advocate is expanding, so we need to learn how to more effectively lead an organization with more operating units. Second, how do you support expansion and performance issues on the medical group side? And third, our growth has created significant opportunity to take even more advantage of our size and scale. Supply chain, logistics, facilities management and clinical engineering now are centralized operations with single leaders across the enterprise. In other arenas we continue in a decentralized fashion. We are driving standardization in those areas through a cross-site council structure.
We have councils that bring together counterparts from every facility to exchange and implement best practices systemwide. We support those efforts with an internal consulting team with two skills sets: applying Lean and Six Sigma to enhance performance, and project management.
Two additional enabling strategies that we have implemented to create a standardized way of operating are the accountability and performance management system we installed five years ago and the systematic implementation of service enhancement practice, e.g. behaviors of excellence, nurse leader rounding and discharge calls.
The other change is embracing the accountable care organization model. In 2011, we partnered with the largest commercial health plan in our market to implement a shared-savings model that gives our physicians and hospitals incentive distributions if we keep cost trends below the market's average.
As we've gotten deeper into accountable care, there are two core competencies that I've had to sharpen. One is population health management. You also have to build a managed care team and beef up understanding around care coordination and disease management infrastructure.
The principle role of the COO is defined by what the CEO needs. I have routine meetings with all our hospitals and medical group presidents, and hardly a week goes by that I am not in direct contact with every one of our presidents. A seamless and wide-open relationship with the CEO is critical.
Never say, 'nothing can be done'
Janet Stanek | executive vice president, Stormont-Vail HealthCare, Topeka, Kan. | Stanek directs operations at the 586-bed Stormont-Vail Regional Health Center, which also comprises a 200-physician multispecialty Cotton-O'Neil Clinic, and ambulatory sites in 12 Kansas counties. Before her promotion to COO in 2008, she was vice president of support services and CIO at Stormont, and held medical records, quality improvement and IT posts in New York and Pennsylvania.
Quality is no longer dealt with three layers down for a Joint Commission scorecard. Today the board and senior management make decisions based on outcomes data. Who is publishing what data and into what percentile you fall have real consequences for the organization. Clinical quality and patient satisfaction are directly related to financial performance and even bond ratings.
Everyone in senior management has to understand what value-based purchasing is, and be able to explain why it matters and what it means to the institution if, say, documentation in the record isn't there. You can't just say that we have to do it because someone has a gun to our head. You have to show that it isn't just about money and the government; that it really is about better care and patient safety and patient satisfaction.
Even though I have a great CMO, quality is still my responsibility. We have a chief medical quality officer, a position I created, who reports to me. We work together on quality. When a doctor is leading the effort, it helps immensely in getting the other doctors and clinical staff on board.
Data-driven process changes are needed to improve and sustain performance, so the COO is involved in IT and clinical process improvement. IT is an enabler. One trap you fall into is you get requests that seem impossible, and the immediate knee-jerk reaction is, "The computer can't do it." My internal rule is never to say "nothing can be done." Instead, let's sit down with the people and the process, think outside the box and come up with a solution or validate that something truly can't be done. It helps us better validate our decisions and we have had a lot of success improving outcomes.
From tactical role to more strategic thinking
Steven L. Mickus | president, health care operations and COO, Catholic Health Partners, Cincinnati | Mickus oversees CHP's 24 hospitals and 15 long-term care facilities in Ohio and Kentucky. He previously served as COO and CEO of the Northern Division of Catholic Health Partners.
Managing is still an essential ingredient, but the COO role has transitioned to leading. That implies moving from a reactive mode to a proactive mode.
We use leading indicators rather than aged data. We now make decisions based on relational databases that include interactive data extracted from real time. As a COO, it helps you transition from a tactical role of managing day to day to that of a more strategic thinker with a strategic vision. In today's health system setting, we must manage both strategy and tactics; doing things right and doing the right things.
We moved from change on an incremental basis to transformational change. We used the logistical concept of eliminating "white space" to increase patient flow efficiency. At Mercy in Toledo, we effectively increased capacity 20 percent without adding beds, and dropped an extra $30 million to the bottom line.
None of us manages in a vacuum. Our environments are very dynamic inside and out, with different constituents and cultural contexts. It requires skill in a very important leadership competency: emotional intelligence. If I am dealing with an insurance company, I ask, "Where are they coming from and are they in any way sensitive to our needs?" I show them how we can save together, and how their decisions affect us.
The COO is becoming the chief integrating officer. To bend the cost curve, we need be creative and innovative with what is and prepare for new models of care that support population health.
The COO works with the CEO to execute a vision, to put legs on the strategy and keep it grounded in reality. You have to be willing to take risks, but know when there is limited organizational readiness or capacity for change. You need a good grasp of business fundamentals and know how change leadership and system redesign works. And you have to know your system. I can't do this job just sitting in my office.
Howard Larkin is a contributing editor to H&HN.
Here are the attributes a COO needs to succeed in an era of value-based purchasing. Steven L. Minkus of Catholic Health Partners adapted them from the Lominger Corporation for the CHP Talent Management Program.
[ Mental agility ]
Broad scanner, deals with complexity, connector, critical thinker, inquisitive, solution finder, understanding, captures the essence
[ People agility ]
Agile communicator, conflict manager, cool transactionalist, mentor who helps others succeed, open-minded, people smart, personal learner, self-aware
[ Change agility ]
Experimenter, visionary, innovator, willing to take the heat when out ahead of others
[ Results agility ]
Inspires others, delivers results, presence
When it comes to accountable care, COOs will have seven major responsibilities:
- Health care operations — inpatient, outpatient, physician office, home care, long-term care
- Health delivery network development and management — own, employ, contract, joint venture
- Quality and patient safety management
- Care coordination and disease management
- Population health management
- Risk contracting and managed care
- Accountable culture leadership