Preparing for a physician CEO: What the board and C-suite need to know

Garnering a higher degree of physician engagement is integral to thriving under healthcare reform, which holds hospitals and health systems financially accountable for patient safety and quality outcomes. Today, boards are increasingly turning to clinicians to shepherd organizations through the transition to a value-based model, as their experience delivering care on the front lines makes them uniquely qualified to connect with and engage their fellow physicians.

"As the organization increases attention on value, care delivery and clinical outcomes, who better to lead and assist in physician engagement than a physician?" says Jason Petros, a consultant at executive search firm Witt/Kieffer. "They are uniquely capable in improving engagement and the clinical quality outcomes that affect reimbursement."

Right now, physicians account for only 5 percent of healthcare CEOs, according to the latest data from the American College of Physician Executives. If health systems are interested in boosting that percentage, they have to find the right candidate, which is about more than identifying an individual with credibility and rapport among his or her peers. A physician CEO candidate must possess the skills and experience to drive the organization forward, and the organization must have the right structure in place to support a physician leader.

"Physicians bring unique capabilities to the C-suite, but there are some functional areas, like finance, where additional support may be needed in order to ensure successful leadership," says Mr. Petros.

Choosing the right physician CEO
Not all physician leaders are created equal, and not all are equipped to succeed at the helm. When considering physician CEO candidates, it's most important to evaluate their functional experience, not just their title. For instance, the head of a department or service line many not be suited to serve as CEO just because he or she holds a director-level title. Functional experiences, such as helping lead care redesign, implementing clinical models to support bundled payments or serving in a leadership role in an accountable care organization, can make a physician better prepared to be CEO.

In addition, it's imperative to assess whether the physician CEO candidate has the capacity to act as a team player, not just a boss.

"In day-to-day practice, physicians are typically accustomed to a more autonomous, hierarchal focus — they're not necessarily team players," says Mr. Petros. "But as CEO, a physician must be able to inspire and empower others to get the job done. The lone wolf physician leader is not a paradigm that will work."

Structuring the C-suite to support a physician CEO
While CEOs bring the clinical background to the table that traditional administrators don't have, many physician executives lack the high level of financial acumen and profit and loss accountability that CEOs need, according to Mr. Petros. Physicians who serve as CMOs or chief clinical officers are not traditionally expected to exercise this muscle, but in the CEO spot, they are.

That's why hospital boards must be cognizant of any skill or knowledge gaps that might emerge in the C-suite upon instating a physician CEO. To most effectively support a physician CEO, the board must be willing to bring in new executives or call on existing ones to hone the vital business skills that will complement the physician's clinical insights.

"You have to be honest about the physician CEO's strengths and weaknesses," says Mr. Petros. "There are some executives who can do all of the above, but they are rare. More often than not you want to create a leadership team that functions as an interlocking puzzle where everyone supports each other's strengths and makes up for each other's weaknesses."

Preparing physician leaders for the C-suite
Hospitals and health systems that make physician leadership development a core part of their strategic plan will be best positioned to appoint physicians to serve as CEO. According to Mr. Petros, internally recruiting physician leaders often proves most successful, as those within the organization are already accustomed to its culture and goals. By creating structured leadership development opportunities, aspiring physician leaders will have the chance to take advantage of the functional experiences that will prepare them to eventually head the organization down the road.

One way to do this is to create dyad leadership roles in which a physician leader works side by side with an administrator whose focus is on the operational or financial side of the organization. In some cases, physicians are beginning to seek formal leadership training by obtaining an MBA. In others, they are actively seeking opportunities to head committees, such as those focused on quality improvement, peer review or medical staff governance.

As healthcare continues to evolve, it is clear that teamwork has emerged as a critical attribute of successful organizations. Clinicians on the front lines must work together to deliver highly coordinated and safe care, and executives in the C-suite must work together to ensure the clinical, operational and financial legs of the business cohere. When a physician rises to the CEO seat, this is especially pertinent for successful leadership.


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