Life after healthcare: Why CIOs do, and don't, leave the industry

In September, Philip Fasano made headlines when he ended his seven-year tenure as CIO of Oakland, Calif.-based Kaiser Permanente to become CIO of insurance giant AIG.

Of all the healthcare CIOs in the country, Mr. Fasano may have been one of the best-suited for a position with an insurer, having spent much of his pre-Kaiser career in IT leadership positions with Capital One, J.P. Morgan Chase and other financial services companies.

However, an AIG internal memo shows Mr. Fasano's work implementing high-performing IT systems at Kaiser was the deciding factor in the hiring decision:

We chose Phil because, while at Kaiser Permanente, he drove the substantial turnaround of their broad technology capabilities, including implementing KP Health Connect, the world's largest civilian medical record system. He also conceived and executed Kaiser's digital health strategy, including the launch of consumer-focused mobile applications as well as mobile platforms in use by the clinical staff.  

The move from healthcare provider to insurer for a CIO makes sense, says Laura Musfeldt, vice president of senior executive search at healthcare-focused executive recruitment firm B. E. Smith. The modern healthcare CIO has many skills that are attractive to employers in adjoining industries like insurance, including the ability to implement and manage large-scale IT and data management projects, and create actionable insights from the data produced.

"Healthcare IT leaders are bright people, able to adapt," says Ms. Musfeldt. "And what they've been doing, working with data and [fostering] evidence-based decision-making, they can bring that into related industries that are concerned about it."

Other industries may be appealing to healthcare CIOs, Ms. Musfeldt says, both because of higher compensation and because of a perceived opportunity to be more involved in that strategic, evidence-based decision-making. "They're not going to go anywhere that won't capitalize on their unique experience," she says. However, employers like AIG offering an opportunity to leverage existing expertise and experience will be a temptation, she says.

Therefore, to retain a CIO, Ms. Musfeldt says opportunities to take on more responsibility and ownership in organizationwide decisions are key. "[Other jobs] may appear to have broader opportunities," she says. "So to keep them, give them broader opportunities, let them be involved in a bigger part of the organization."

Russ Branzell, president and CEO of the College of Healthcare Information Management Executives (CHIME), agrees giving CIOs more strategic responsibility will help increase job satisfaction and possibly retention. "It used to be the only executive leader in the CIO suite was the CIO — now we're seeing CTOs, CISOs, chief application officers," he says. "One reason is this group is taking some of the daily burden off CIOs, allowing them to be more strategic, gives them more energy and helps them work [at that organization] longer."

However, Mr. Branzell stresses most hospital and health system CIOs took their current job because they have a passion for healthcare and want to use their abilities to improve care delivery. Healthcare CIOs may come from other industries, but once they're in, they tend to stay. "A CIO will make more money in other sectors," he says. "So the reason they're in this one is that it's a calling; they have a desire to work in a field where they're making a difference for people."

As evidence, Mr. Branzell points to increasing tenures for CIOs. "What we're seeing is careers are extending past the traditional 'retire at 65," he says. "More are staying for a longer clip and they're staying longer in the industry as a whole."

Additionally, many CIOs don't fully leave the healthcare industry even after retirement. One retired CIO recently told Mr. Branzell he moved into healthcare consulting after his retirement because he "wanted to get out of the grind, but stay in the game." He's not the only one, says Mr. Branzell.

"It's such a small community, these CIOs know each other, lean on each other, they know each other's families," he says. "They don't want to disengage, they want to stay part of this. It's that important to them."

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