What Skills Are Needed of Healthcare Leaders in an Era of Value-Based Care?

In previous decades, hospital performance was based largely on volume. Leaders kept an eye on revenue and expenses, engaged in physician relations to ensure cases continued to be referred to the hospital, and left quality mostly to its medical staff, with some guidance by chief quality or nursing officers.

Today, we are starting to see the metrics of success shift, and in the future they are likely to be markedly different. To start, as providers take on risk, volume will be the enemy. That is, while providers will work to oversee care for large populations of patients, they won't want them in the hospital or ER. Instead, care will need to provided at the lowest-cost site of care, be it a physician's office or the home, to keep costs down.

When the overarching metrics of an organization move from fairly straightforward, cost vs. revenue goals, to more complex goals of keeping a population healthy and properly pricing risk-based contracts and products, leadership requirements change.

In response to this, the American College of Healthcare Executives plans to study the skills needed for successful leadership in this new era, a project which it announced it would undertake at last week's ACHE Congress on Healthcare Leadership, which took place in Chicago.

Why more information is needed
The ACHE is smart to explore the changing leadership requirements for healthcare executives, especially as it recently announced hospital CEO turnover hit a record high in 2013, with 20 percent of top executives leaving their roles.

Further, recent research suggests that the number of healthcare leaders with performance that is categorized as "struggling" is on the rise.

Given this, the ACHE's decision to provide additional guidance on which skills and traits are correlated with leadership success will be very important to ensuring the industry is developing a cadre of future leaders ready to take on the challenges ahead.

Skills expected to top the list
The ACHE's announcement got me thinking about which skills and characteristics would appear on the list. In attempt to explore this, I asked a two healthcare leaders their thoughts, which led to the following list. While ACHE's much more extensive project will provide greater insight, here are a few skills critical for leaders in a new era of healthcare leadership:

  • Change management skills — According to Chris Van Gorder, CEO of San Diego-based Scripps Health, the ability to manage and communicate the need for change will be critical as organization adjust their cultures and processes to succeed in a value-based world.

  • Ability to facilitate lean process improvement — When Mr. Van Gorder was asked by a rising Scripps physician executive if he should pursue an executive MBA, Mr. Van Gorder explained he'd rather have him become a Sensei, an individual who helps facilitate lean processes and continuous improvement within an organization.

    Paula Roe, BSN, MBA, a senior consultant with Simpler Consulting and former vice president of operations at St. Elizabeth Healthcare in Covington, Ky., agrees on the importance of process improvement skills, saying the "ability to drive out waste and variation" will be critical.

  • Co-management aptitude — Future healthcare leaders must be able to co-manage services along with clinical leadership and front-line staff, instead of relying on the old "command and control" style of leadership, says Mr. Van Gorder.

    Ms. Roe agrees. Instead of dictating changes, the best leaders coach their reports and demonstrate a type of servant leadership, where leadership is defined by serving others and the organization as a whole.

What skills would you add to this list?


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