How new CEOs play tough hands

It's a rare CEO that doesn't dream of a seamless transition. Unfortunately, the healthcare industry is riddled with seams. 

In addition to long-standing systemic challenges, each hospital and health system comes with its own set of concerns that may include high turnover, financial losses and/or recent job cuts. What's more, trust is paramount — but fragile — in the early days of a CEO's tenure. The responsibility can be tough to navigate as employees express doubts based on the past and boards bring demands for the future. 

A 2017 article in Harvard Business Review explored the issue and offered advice for CEOs who "inherit a mess": Be transparent. Don't be emotionally distant. Be humble. Don't ever blame your predecessor. 

For effective leadership when inheriting a challenging environment, Nathan Staggs has a two-pronged approach.

He focuses on the financial side by working with the CFO to examine practices related to the revenue cycle, including billing, coding and denial rates. 

"But the other piece that I tend to focus on more is, are we doing the things that we need to do to take care of employees? Because they're the ones that take care of the patients," he told Becker's.  

Mr. Staggs has served as CEO of Coupeville, Wash.-based WhidbeyHealth since March 2023. He brought with him more than two decades of senior hospital and healthcare leadership experience, serving at facilities in Oklahoma, Pennsylvania and Texas. He also took the helm after the hospital board fired Ron Telles, who was serving as CEO and CFO, in February 2022 and contracted with HealthTechS3, a hospital management services company, to recruit permanent replacements for those roles.

"There were a lot of financial challenges like every hospital, just about, is facing now, especially small ones," Mr. Staggs told Becker's. "There was a perception challenge within our community of whether our care was good. And there was a culture challenge internally that was really hurting relationships. There was a big divide between administration and employees. There was a big divide between administration and medical staff. And I think financial challenges probably led to most of that." 

Maintaining perspective

To maintain a level of perspective amid these challenges, Mr. Staggs shows employees an inverted pyramid of a traditional organizational structure of a hospital. Instead of a pyramid that has CEOs and the executive team at the top, then employees toward the lower end, he takes a different approach: showing new hires the opposite.

"I like to flip that upside down and put the patients on top and me at the bottom," said Mr. Staggs. "It's not necessarily from a management structure standpoint. I still have to be the boss and make decisions, but the perception of it and the way you look at it is, the patients are always first.

"Patients are on top, and that's your priority, your employees, that should be their focus. That should be the only thing they have to focus on, is taking care of patients, because that's what they're hired to do. And then as you move down to the next level, their focus is only on taking care of those employees and still keeping the patient in focus. And then when you get down to my level, my main job is to support the entire organization, to support the people doing the work with the patients."

He said this support includes talking with employees and identifying solutions to challenges. 

Healthcare "changes all the time. So, you stay on top of that and you think, how does this affect my employees? … I'm not the one that touches the patients every day. I'm not the one out there doing the clinical work and focused on that. They need to be focused on that and not have to worry about all the issues that I have to" focus on, such as the hospital's financial situation, Mr. Staggs said.

In addition to the inverted pyramid, Mr. Staggs also presents to new employees about perception and perspective.

"My perception of the work environment here really doesn't matter. It's the employee's perception [that matters]," he said. "It's not my perception of patient care [that matters]. It's the patient's perception [that matters]." 

Mr. Staggs noted that most patients don't know whether their provider is clinically competent, because they're not nurses or physicians, "but they do know if you're nice. They do know if you're compassionate."

Overall, for himself as a leader coming into an organization that has struggled, he focuses on keeping top talent and ensuring workers have the best work environment possible so they can take care of patients. 

"When you're doing a turnaround or trying to change things, you have to have the patience to let things work and let things develop," Mr. Staggs said. "When you're in an executive position, a lot of things that you do, you won't see the results of or the full results of for quite some time. You have to really think through and be willing to be flexible and make some adjustments as to my long-term goal and how we get there step by step."

Leading through uncertainty

"Step by step" is a sentiment that Brady Dubois, CEO of Columbia, Mo.-based Boone Health, echoed in conversation with Becker's. Mr. Dubois assumed the helm Nov. 20, a few weeks after the system announced it would be ending home care and hospice services. Twenty-six employees were affected, marking the second round of job cuts that year.

Layoffs weren't the only challenge Mr. Dubois was tasked with. Since the health system became independent in 2021, Boone Health has lost approximately $112 million. Recently, there's been even more doubt about the future of Missouri's independent systems as St. Louis-based BJC HealthCare and Kansas City, Mo.-based Saint Luke's Health System proceed with a 28-hospital merger. 

"Coming in, I mean, it's not a secret," Mr. Dubois said. "There are some things that need to be changed and some modifications that need to be made that are based off of what's good for Boone Health in the long term." 

The health system's board looped Mr. Dubois in its decision to cut services, since he would be inheriting the aftermath. He agreed that home health and hospice were available elsewhere in the community and were not "core" to the functioning of Boone Health. But just because a decision makes financial sense does not mean it will be readily accepted by employees — or easy for a new CEO to explain. 

Mr. Dubois aims to keep communication as "above board" as possible, ensuring that employees have advance notice of changes that might affect them. In the layoffs' case, the system reached out to other home health and hospice companies in the community, aiming to build bridges for future employment. 

That same honesty is critical when setting new goals for the rest of the staff.

"You've got to be painfully transparent," Mr. Dubois said. "'Here's where we are. Here's where we're going.' You have to make sure [teams] understand the vision of where we're going, the plan as to how we're going to get there, and how we're going to execute." 

Change is best served in digestible increments, according to Mr. Dubois: "No one cares about a five-year plan. They want to get to quarter two. So let's focus on that and how we're going to get there."

Catalyzing change

Now, about a year after Mr. Staggs took the helm of WhidbeyHealth, patient volumes are up in most areas, he said. The health system has also hired about 240 new employees since Mr. Staggs joined the organization.

Still, "we do have some turnover," he said. "We have a lot of military spouses, and so they get transferred. We have turnover. But we've added 15 or 16 new providers. 

"And so, from my seat, we're heading in the right direction. … There is still a lot of work to do on collections and denials. But we're working on it. It just takes a little longer for those things to kick in and for us to start seeing it. But with the volumes being up, the financial part will come, it will follow."

As for Boone Health, the system has been zeroing in on "the things we can control," according to Mr. Dubois: decreasing length of stay, increasing patient acuity and cutting back on contract labor. It has been out of the red for three of the past four months. 

The system was also named one of Forbes' best midsize employers for 2024 — a culture win Mr. Dubois takes no credit for. All health systems have a "core," he iterated. In tumultuous times, a CEO should do their best to preserve it. 

"We call it 'Boone behaviors,' just how people interact and how people work with a unified approach toward excellence in all aspects: the clinical side, the service side and the teamwork," Mr. Dubois said. "That's been a long-standing principle here at Boone long before I ever got here, and my job is to make sure I don't mess that up."

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