The health care field is in the midst of an enormous transformation and the roles of executive leadership must follow suit. The shift toward accountable care will require new skill sets within the executive suite to successfully navigate the organization in the future. Hospital executives will need to create a vision and inspire a new generation of leaders through this transition.
To discuss the changing roles of hospital leaders, Health Forum convened a panel of industry experts July 20 in San Francisco. Health Forum would like to thank all of the participants for the open and candid discussion, as well as B. E. Smith for sponsoring this event.
MODERATOR (John Combes, M.D., AHA's Center for Healthcare Governance): What keeps you up at night as a leader? What are you most challenged with these days and how do you deal with those challenges in front of your entire organization?
J. THOMAS JONES (West Virginia United Health System): One of the things that keeps me up at night is whether people really understand that the health care field is at a critical juncture and that they need to change — and change now — to be successful. There's a risk that people may think of this as just another change. I believe that we are truly at a revolutionary stage. When you are doing well financially, people are reluctant to change and do something totally different and that's one of the things that keeps me up at night. How do I make sure everyone understands we have to change now?
DOUG SMITH (B. E. Smith): That's one of the things driving the large turnover numbers that we're seeing among hospital leaders. We're seeing individuals who are unable or unwilling to make that change.
MARY STARMANN-HARRISON (Hospital Sisters Health System): The biggest thing for me is the transition from volume to value. How will we guide the organization through that transition and at what speed? Timing will be a challenge. You don't want to be too late or too early in the game. It's a very sensitive fine line to walk. How should we prepare for population management? What are the tools that we will need? We won't get reimbursed for it today but we will need it in the future.
BRITT BERRETT (Texas Health Presbyterian Hospital): We're redesigning the plane while we're flying it.
CAROL DOZIER, R.N. (Ivinson Memorial Hospital): For me, it's a balancing act between how I balance our resources. We clearly need to cut costs and preserve our resources while also bringing in the resources we'll need to operate under a value-based system. What about balancing especially in a small hospital? I mean we are very lean and we have few resources and not a lot of depth.
MODERATOR: How do you build the case for change? How do you get others to share your vision?
BERRETT: We've got to engage everyone in this transition. They've got to understand they have a role in this.
JONES: Our boards have to set the tone to some degree, particularly the physician members of the board. They need to drive the message down to the medical staff. That is key. The employees are probably easier. You can sit down with them in groups and explain it. But we'll have a harder time convincing physicians, particularly the older ones who will be resistant to radical change late in their careers.
BERRETT: I agree. We don't have a strong history of developing physician leaders. Being a physician doesn't necessarily make you a great leader. As soon as we have physician leaders in that space, we'll make good strides.
SMITH: In the past, many physicians were not even interested in being leaders. Now they have a desire to become strong leaders and have the capability of applying those skills. Ten years from now we're going to see some very effective physician leaders.
JOHN BRENNAN, M.D. (Newark Beth Israel Medical Center): Physicians can usually be divided into three groups. The first group is ready to retire within the next five years. The younger group of physicians is willing to learn and participate. The most difficult group will be those in the middle. We've got to try to make their lives easier and do the best we can. This group will require a great deal of focus.
JONES: We have to invest more in their education. One of the things we're doing in our academic medical center is paying for any department chairman who wants to get a mini-MBA. We have found that to be very helpful. The cost is minimal and they come back with a very different and deeper understanding about finance and interactions with people.
MODERATOR: You have pointed out a couple of the challenges that you have in bringing physician leadership along and also making the case of getting people's skin in the game. What competencies or skills do you think you need as leaders that may not have been envisioned when you took your job? What are the new skills and competencies that you think you need to really effect this change?
BERRETT: My team looks to me for inspiration and vision because it's pretty dark and murky out there right now. As a result, I've spent more time describing the future as I see it than anything else and during any other occasion in my career.
KATHRYN RAETHEL, R.N. (Castle Medical Center): If we are not enthusiastic and upbeat and positive about our leadership role, there will be no one behind us wanting to come into our roles. Younger potential leaders are not going to be attracted to our leadership roles. We have a responsibility to set the tone and to be inspirational and to see a positive future. It takes some perseverance but it has worked for me.
JONES: I agree. You have to be paranoid to some degree, but you also have to give hope. Does that make sense? We've got to give hope to our employees, especially given some of the discussions we are forced to have these days regarding reimbursement cuts and new payment systems. The message we have to deliver is overwhelming, but if we break it down, it becomes more manageable. For example, instead of talking about cuts, talk about the savings that can be accomplished through reductions in length of stay and the standardization of physician preference items. That's one of the things we have to do — give them hope but also a dose of reality.
STARMANN-HARRISON: Communication is crucial. It has always been important but it's even more important today. Everyone has to know the 'why,' not just the 'what.' In the past, we probably haven't given enough information. We need to provide more information so people understand why we're taking the steps we're taking, and the direction we are going is really key.
DOZIER: We need to be educators. It's too hard for people to adequately keep up with all of the changes we're experiencing. Board members, physicians and members of the community keep asking, 'What's going on?' I have to keep up with as much as I can and take it back to them. They don't have the time and the resources to do it themselves.
BERRETT: I like the comment Tom made about hope. There is purpose behind what we do. We need to continue to communicate that and reignite the fire that brought us into this profession. So the message may be that we need to reduce costs by a significant amount, but we do it to bless the lives of our patients and we do it for no other reason.
SMITH: Hospital leaders today have to, in a sense, build a brand for themselves and part of that is the ability to garner engagement from their teams, giving them hope and providing direction. You'll never have engagement without communication.
MODERATOR: Britt mentioned the core values of why everybody is in this business in the first place. How do you, as leaders, connect core values and build a sense of engagement behind them?
STARMANN-HARRISON: Core values connect with our mission. Everything needs to be connected back to the mission and it needs to be very visible. These connections can be drawn all the way down to the employees and will help them become engaged in what you are trying to do.
JONES: It's a cultural thing that needs to be embedded in the organization from the top all the way to the bottom. As a CEO, if you don't relate to your rank-and-file employees, how do you expect them to relate to your patients and to each other? It's as simple as that.
MODERATOR: So, is there a need to develop that kind of competency within senior leadership at your organizations? We're essentially talking about cultural transformation. Do your executive teams have enough skills to transform the culture the way it needs to be transformed?
RAETHEL: Not yet. We have to invest in it to enhance their skills. We have to develop relationship skills and truly care about our associates, our volunteers, our physicians and our community. It has to come from the heart.
BRENNAN: We are working to develop our physician leaders. They have to be able to state our strategy down to the departmental level. The message is much more powerful coming from a physician leader than from me.
MODERATOR: So, is part of the leadership challenge for all of you the ability to share the leadership and the power with other groups, other leaders within the organization?
BERRETT: Yes. I think it's mandatory.
BRENNAN: That's absolutely right. In the past, we often moved physicians and nurses into leadership positions without making the appropriate connections. We've moved individuals into these roles without the tools they need to effect change. They haven't been trained on the implications of their behavior and we've allowed it.
JONES: True leaders get it. They understand they can't be successful unless patients are happy and unless they have good outcomes. True physician leaders understand it and drive the process for it without question.
MODERATOR: I want to get back to something Kathryn touched on earlier. Are you seeing many people behind you wanting to step up? Are you experiencing that? Will there be a leadership gap moving forward?
SMITH: I see a growing level of excitement among today's leaders and future leaders. The game is a lot more fun now.
JONES: I agree with you on that. Even people that are a few years from retirement are saying they do not want to leave unless the institution in good shape. But there is a challenge ahead. The next generation does not have the same work ethic as we. They don't put in the hours that we do. If you have a physician retiring, it takes one and-a-half to replace him.
STARMANN-HARRISON: That is really true. Think about what it's going to do to the workforce.
MODERATOR: If you think there is a leadership gap, how do you close the gap? Jim Collins says every generation thinks the other generation cannot live up to what they have done. If we have people who work differently, how do we accommodate that?
DOZIER: Well, I have an executive who works with me and she does work very differently and she has different ideas on how to lead. We let her do her own thing and she's very successful. Sometimes you just have to step back and allow your employees to do things their own way. That's what we are seeing in this generation.
RAETHEL: I have one of those, too. Sometimes he does things differently from what I would have done, but he gets it done and gets it done well. Maybe that's what we need — a new generation to come in with a new way and a new vision.
BERRETT: I had a conversation with our chief nursing officer recently. We were talking about the younger nurses coming in who don't think hand washing is a big deal. They don't want to be told to wash their hands for 15 seconds. They want to know what is the outcome that is wanted and they will work toward that. That brings it back to the purpose. If we can articulate the purpose behind what it is we are trying to accomplish, they will listen. It gets their attention.
JONES: If you want to just simply communicate facts, you can use email. But if you're really going to lead, you have to do so in person. Can you imagine Dwight Eisenhower sending a text message to troops invading Normandy? That's why presidents go to Iraq and Afghanistan. They don't have to go there, but their presence makes a difference. That's what it is about. And that means going in on the night shift and on weekends and being visible on the day shift.
STARMANN-HARRISON: That's going to be a real challenge for the younger generation because their first instinct is to communicate by text or email. Relationships make the world go around. I have two children in their early twenties and I am constantly reinforcing that message to them. Never send a harsh message or a negative message or any kind of message via email. It needs to be delivered face-to-face and that's going to be a challenge for the younger generation.
SMITH: We are talking about a generation that has yet to apply for more senior-level positions. So this is one of the things that we're going to have to teach them.
BERRETT: We have encountered an issue among our younger nurses. About 30 percent of nurses' time is spent entering electronic information. We have to teach these nurses to maintain eye contact and to remember the importance of touch.
MODERATOR: As we move into accountable care and become more accountable for the health of our communities and populations, what's your role as community leaders? How do you become community leaders?
RAETHEL: We have to not only be out in the community, we have to be a part of the community. I ran into one of our senators on the Fourth of July and he gave me a big hug and he said we're privileged to have your hospital in our community. It reminded me that that is really what we have to do. We have to connect with the people who live in our town. We really have to be there for the health and welfare of the community.
JONES: Part of our senior leaders' compensation is based on community involvement. It doesn't matter whether they volunteer or participate in the Chamber of Commerce or the Rotary. They've got to get involved in a couple organizations that demonstrate a commitment to the community.
BERRETT: That's the way hospital administrators used to be. They used to be iconic in the community but somehow the level of involvement changed. We have to be the voice of the community. If a high school drops physical education or has unhealthy food offerings, we need to speak up.
STARMANN-HARRISON: One of the things we can do is lead by example within our own organizations. Do we serve only healthy foods in our cafeterias? We were leaders when we took our buildings smoke-free and we need to do that in our cafeterias. We need to do that with our employees in terms of their wellness incentives and how we incentivize our employees to make good personal choices. We can really set the example.
MODERATOR: You are all being pulled in so many different directions. Where do you get your inspiration?
DOZIER: For me, it's knowing that we are making a difference. It may not be apparent everyday, but if we look at the care we provide our patients and review the compliments we get from family members, it providee inspiration. We have to take it when we get it and the rest of the time just know we're doing the right thing.
JONES: After everything is said and done, we have to recognize that some of the things that we've done for years, such as analyzing financial statements, can be done by somebody else. We need to be more visionary and strategic and, quite frankly, spend our time more appropriately. As a certified public accountant, I used to just love those financial statements and would spend hours with them and now I barely look at them. I have someone else who can look and summarize them for me and I have faith in that. We have to recognize there is a changing role here at the top.
BERRETT: Getting back to population health, we know we can't do this alone. We may need to be the source of inspiration, but we are going to need partners to be effective. Maybe we can inspire other organizations, including third-party payers, to enter into the dialogue. We need them to partner with us. It is impossible to move this further down the road without partners helping us.
MODERATOR: I'm going to ask a little bit of a controversial question here. As we move forward, we will be creating more of a clinical enterprise. Will leaders need more clinical skills in the future?
JONES: In my opinion, yes.
BRENNAN: It depends on what type of clinical skills you are talking about. Senior leaders won't need to have the skills to remove an appendix. But they will need to be better able to speak the language.
DOZIER: I have a nursing degree and I think it will help as we move forward with these quality conversations with the physicians and other clinicians. It's not absolutely necessary, but it is certainly helpful.
RAETHEL: I think it goes beyond us as leaders. Our communities are going to need greater clinical knowledge so they understand the changes being made and the importance of preventive health, among other things.
SMITH: That's why you're seeing a greater number of physician executives. It's not just to bring the physician staff along to the hospital. It is also to understand the clinical side of leadership.
BERRETT: It's important for all of the senior leadership team to expand its clinical knowledge. The chief information officer has to understand clinical processes. For example, the CIO not only needs to know key performance indicators, but also how to make them usable. The same would be true for the chief financial officer who needs to understand the impact of financial decisions on care delivery.
BRENNAN: I agree. We sent our senior management team on rounds with the risk manager. My CFO said that was a great experience for him.
JONES: We had a CFO who used to complain about the costs of treating patients in the ICU and questioned the extended lengths of stay for ICU patients. One day we took him to the ICU to see the patients and he understood. It was a learning experience for him.
MODERATOR: I want to move on to talk about boards because they play an important role here. Dick Chait describes a board's role in the organization as a partnership in leadership. Have you found that with your boards?
JONES: This is what I tell every new board member, 'I want you to have faith in me, but I also want you to challenge me and question me on everything. If you simply follow me and I take you off a cliff, you are going to go off with me. It's your job if I go off the cliff to dig in your heels and pull me back.' It has to be a partnership, without question. We have to educate and get very skilled board members. I've been asked to speak to hospital boards across the state and I see great variation. At one meeting, the board talked about the gift shop for 15 minutes. That's not how boards should spend their time. At our board meetings, we talk about four things: quality, cost, strategy and performance.
RAETHEL: I really benefit from the longevity of some of our board members. Some of them have been around for a long time and they know everything there is to know about the organization. But we still need to teach them and keep them up-to-date about the health care field. That's our obligation to them and it can help us create some strategic direction going forward.
BERRETT: Exceptional board members provide perspective, insight and purpose. We are very blessed with that kind of guidance and it gets our energy going. Board meetings are a great source of energy and inspiration for me. I'm proud to share our results. And I anticipate tough questions. I love being challenged with tough questions.
STARMANN-HARRISON: We need to be very transparent with our boards and we need to talk about the risks associated with all of our decisions. That's a key ingredient and sometimes it's not always the case.
BERRETT: We also have to establish trust. There are some leaders who are fearful of transparency and that creates a very negative environment.
MODERATOR: Over the course of your careers, how has your relationship with board members changed? Do you see them as more active in partnering with you to lead the organization? Has there been a major change in the way they do their work?
BARRETT: I have seen a greater number of clinicians on boards. We have a nurse on our board and that brings a very rich dialogue and element. That's critical. We now have more physician-board participation than I've seen in my career.
RAETHEL: One of the most important functions of the board is to oversee the quality initiatives of the hospital. I see people who have come out of electric companies and banking who are deeply engaged in the quality discussions. That's exciting to me.
JONES: Organizations are starting to look outside of the communities for board participation. That's very healthy, quite frankly.
STARMANN-HARRISON: It's also helpful to have board members from other health care organizations that are not close competitors. I served on a board quality committee for another system and it was a tremendous, mutually beneficial experience. I learned so much and they felt like they gained from some of the insights and experiences that we had in our system. We should do more of that as an industry.
MODERATOR: We've talked some about this already, but I want to get more specifics. Part of the role of the leader is to create the next generation of leaders. What specifically are you doing in your own organizations to help create those new leaders?
RAETHEL: We started a leadership institute about three years ago. It meets four times a year. We take everybody, down to charge nurse level, in the organization. It covers many subjects, including financial skills, managing productivity and team building. It's an ongoing thing; it is something that we will continue.
BRENNAN: We offer a nine-month leadership development program. Members of senior management nominate employees based on their performance. Employees in the program are on track for higher-level positions and salaries. So it's a reward as well as an educational opportunity.
JONES: One-on-one mentoring is still very effective. One of my assistants sat me down one day to talk about one of our initiatives. He said, 'This turned out to be tremendously successful. How did you have the vision to do this? What did you see that we didn't see?' We now meet every couple of months to discuss things.
SMITH: An important first step for senior leaders is to demonstrate to future leaders that this career is a higher calling and it isn't about the money. It's not about power. It is about the love of making a change and the love of making a difference. We need to give future leaders the skills through academies and training. They have to do it for the love of the job.
BERRETT: When we were seeking Magnet status, we really pushed for graduate nursing degrees. It forced me to take a hard look at myself and I decided to go back and get my Ph.D. That sent an important message to the team that we are going to push ourselves. In addition to our leadership institute, we try to create fun ways to learn, such as book clubs. I give homework assignments and we reward advancements and celebrate clinicians who advance. On another note, I'm acutely aware of the need for diversity because we need to look like our community — and we don't. We are purposefully reaching out to create mentorship opportunities so that we can both teach and learn from individuals from different cultural and ethnic backgrounds. We need to do that.
STARMANN-HARRISON: An organization that I previously worked for had a significant diversity mentoring program. They took young managers from diverse backgrounds and paired them up with senior executives over a two-year period. It was excellent. First of all, the senior executives learned a tremendous amount. And it was highly beneficial to the young managers. It was a great learning experience. That's on my bucket list at my current organization to create a diversity leadership mentoring program.
MODERATOR: I just want to raise one more issue about physician leadership and link it to the conversation we had about mentoring. What are your thoughts about mentoring physicians to become leaders?
RAETHEL: Most of us have had mentors ourselves and we can look back on our careers at people who took an interest in us. Physicians want that as much as the rest of us. They want us to treat them with respect and to share what we know, and there are plenty of them out there who are already willing and able to step up. But we have to pick people from very unlikely sources sometimes to give them a shot.
STARMANN-HARRISON: Too often we expect too much out of physician leaders because of their age versus how many years they have been in leadership. They go through so many years of training. As hospital administrators, we finish school by our mid-20s. Physicians finish school in their early 30s and often go on to fellowships. They may practice a few years and then decide to go into leadership. By then, they are in their late 30s, early 40s. We often forget that.
MODERATOR: I have one more thing I'd like to cover. Let's go around the table and I'd like for each of you to give your own perspective on leadership.
STARMANN-HARRISON: A leader has to walk the talk each and every time and they have to be connected with everyone in the organization. Relationship skills are still key and communication skills are still key. So, a lot has not changed during the course of my career.
SMITH: The principles that drive leadership in my firm are the same principles that drive leadership in your organizations. I absolutely agree with Mary that you have to demonstrate what it is going to take and you have to lead. The road ahead is going to be very exciting for all of us.
DOZIER: I agree. We also have to have courage and integrity. We have to be willing to ourselves second or third or fourth. And we truly need to care about the community and the people of the community.
BERRETT: For me, I think we are moving in a new direction and there is a new trend ahead. We are moving away from transactional leadership into an era of transformational leadership. We have to do better and transformational leadership, with a focus on mission, vision and values, is the right direction.
BRENNAN: Leaders must stick to their values and understand they are acting for the right reasons.
RAETHEL: I think about what my legacy might be after I'm gone and I hope to be remembered as a servant leader to my associates, to my volunteers, to my physicians and to my community as a whole. I hope that my legacy includes at least a small handful of people who will feel I have helped guide and support them along the way.
JONES: What leadership means to me is integrity and credibility. You have to have vision. You have to be able to communicate that vision and you have to have humility. You have to be willing to surround yourself with really bright people and have confidence in yourself.
1 Communication and visibility remain key traits of successful leaders. Hospital executives will need to enhance their visibility within the community to streamline the transition to population health management.
2 Building a competent, supportive executive team is imperative. Hospital leaders will need to focus less on the day-to-day operations of the organization and more on creating a vision for the future and guiding the organization toward that goal.
3 Hospital executives will need to become better educators in the future to keep their boards and organizations abreast of upcoming chan