The right way to rightsize exec teams

Hospitals and health systems have been facing significant financial and workforce challenges for the past few years.

In 2022, hospitals and health systems suffered the worst financial year since the start of the COVID-19 pandemic, according to Kaufman Hall.

At the same time, healthcare organizations have continued to grapple with staff shortages. Workforce problems in U.S. hospitals are troublesome enough for the American College of Healthcare Executives to devote a new category to them in its annual survey on hospital CEOs' concerns. In the latest survey, executives identified "workforce challenges" as the No. 1 concern for the second year in a row.

These challenges, along with other operational circumstances and factors, have led some organizations to cut jobs and rightsize executive teams by reorganizing responsibilities, eliminating positions and/or creating new roles.

Becker's interviewed healthcare experts about their own rightsizing experiences and the pitfalls and mistakes to avoid when rightsizing teams. They noted the various factors that contribute to these decisions as well as workforce talent issues to keep in mind. 

Making the changes

Sharp HealthCare, a seven-hospital system based in San Diego, is reorganizing executive leadership for its hospitals, which is now divided into a three-hospital group and a four-hospital group, each overseen by one executive. 

Sharp Vice President and COO Brett McClain said leadership changes announced in October are in response to staffing, financial and other challenges hospitals are facing in today's healthcare environment.

"When I looked at the ability for us to be nimble and make meaningful decisions in our market with our physician partners, it became clear to me that that would be significantly more successful by synthesizing down our leadership on the care side to these two leaders," he said.

Three of Sharp's hospital campuses — Grossmont, Chula Vista and Coronado — are overseen by Scott Evans, PharmD. Sharp Memorial Hospital and specialty hospitals Mary Birch Hospital for Women & Newborns, Sharp Mesa Vista and the Sharp McDonald Center operate as the Sharp Metro Campus under the leadership of Trisha Khaleghi, MSN, RN, who already led the campus's three specialty hospitals.

While the move involves management restructuring, it is also about giving leaders oversight and accountability for top service lines for the whole system, said Mr. McClain.

For example, Dr. Evans is responsible for three campuses as well as neurosciences and orthopedics for the Sharp system. 

"It is a combination of operational accountability for those actual sites as well as strategic and service line growth for the whole system," Mr. McClain said. "The two leaders are incredibly focused, very physician friendly and also work well together."

The Sharp system also created new executive roles — chief nursing executive and chief clinical and transformation officer. The inaugural position of chief nursing executive is held by Susan Stone, PhD, RN, who previously served as CEO of Sharp Coronado. The new role of chief clinical and transformation officer is held by Amy Adome, MD, who previously served as Sharp's senior vice president of clinical effectiveness. 

Mr. McClain said the changes were geared toward looking to the future, including the future of the healthcare workforce and nursing in particular.

"What is the new generation of nursing going to mean at Sharp? How are we going to respond to education and training and, even on the recruitment side, we're going to have to build our own in a lot of cases," he said. "What are the things that we need more of a senior leadership perspective and driving force on in terms of retention?"

Summa Health, a $1.4 billion-dollar system based in Akron, Ohio, made 10 changes to its executive team with the creation of three roles, elimination of four roles and appointments of three senior leaders. 

The health system includes a hospital campus with a rehab hospital in Akron and a hospital campus in Barberton, Ohio. 

Summa Health President and CEO Cliff Deveny, MD, told Becker's the leadership changes announced in October are in response to today's healthcare environment, the rapidly changing needs of community members, and the rapid changes in technologies. 

Summa Health's master facility plan represents an investment of up to $350 million in facility improvements across the organization, and the system launched a new systemwide clinical IT platform last October. 

The system considered these plans and what today's organizational structure would look like to be the most efficient and lead to improved performance, Dr. Deveny said. 

For example, under the new leadership structure, Summa Health created the position of chief nursing officer, hospitals. The person in this position is responsible for managing daily nursing operations for Summa hospitals. The positions of chief nursing officer of Summa Health System Akron and chief nursing officer of the Summa Health System Barberton campus were also eliminated.

"We wanted to make sure we had a common view on how nursing functions across the system and that we had operational leadership that drove evidence-based practice," Dr. Deveny said. 

Other changes include the appointment of a COO of providers; president of insurance and networks; and senior vice president of marketing and business development. Additionally, the system created the position of president of Summa Health system hospitals to oversee the daily operations of Summa's Akron and Barberton hospital campuses.

"We want to make sure regardless of what acute care bed you got into, it was the same experience, it was the same processes and there weren't geographic differences or cultural differences," said Dr. Deveny.  

'Not a one size fits all'

Sharp and Summa represent two approaches to rightsizing, and other health systems have taken their own approaches as well. Philadelphia-based Jefferson Health is reorganizing executive leadership for its hospitals, which will be grouped into three divisions instead of five. Hutchinson (Kan.) Regional Healthcare System eliminated the chief strategy officer position as part of an executive team reorganization. And Gainesville, Fla.-based UF Health Shands separated the chief medical officer and chief of staff responsibilities, which were previously combined into one role.

No matter the approach, Mr. McClain, with Sharp, acknowledged that "there's not a one size fits all."

His health system looked at specifics of what the organization wanted to accomplish in the San Diego area in terms of growth.

"I looked at many different models that were out there and took some pieces of it," said Mr. McClain. "There are some trends happening [in healthcare] in terms of the service line leadership getting kind of pushed back out into the field, closest to the patients, closest to the physicians, closest to where the care is actually being provided. That, to me, was a real driver here as opposed to just a restructuring."

He told Becker's that he also thought about specific goals around areas such as cardiology and orthopedics, and those needs help define the structure change. 

"I'm not sure that works exactly the same in other markets," Mr. McClain said. "I think it's about understanding your system, understanding the opportunities that you have."

Dr. Deveny, with Summa, described the changes at his organization as "a little bit of a shock" at first for team members, but that employees "understand it and they actually like it. What we find now is that there's better coordination, more empowerment of people at the front lines and in mid-management to make decisions and to be able to do their jobs."

He also said the changes put the system in better position to respond to consumer needs.

At the same time, "We don't want to negate all the hard work that legacy leaders did," Dr. Deveny added. "A lot of them really did the hard work and built the foundation so we could move forward."

Under the reorganization, some of those people left the organization while others moved into different positions. 

"Our board has been very focused on making sure that you bring people up through the organization and train them to the point that they can take on these new roles," Dr. Deveny said. 

Pitfalls to avoid

For health systems looking to rightsize executive teams, Donna Padilla, managing partner of WittKieffer's healthcare practice, shared the following recommendations as well as pitfalls to avoid:

1. Ensure choices are aligned with current needs and future strategy. "It's marrying the current agenda of [challenges] with where ultimately the system wants to go," Ms. Padilla said.

2. Take the opportunity to expose senior leaders to different areas and oversight. "It's a mistake to not see the opportunity to say, 'Hey, we don't need you [in this area] anymore, but have you thought about this?'" Ms. Padilla said. "I think it is good from a talent perspective to make sure that before you're having someone leave the organization" to explore other skill sets they have that can be used in a different place within the system or organization.

3. Don't eliminate a whole talent pipeline layer. Ms. Padilla gave an example of eliminating the associate chief nursing officer or vice president of finance roles. When rightsizing executive teams, "You can cut deeply to the point where you've eliminated a whole layer of pipeline," she said. "The associate CNO is a perfect example, or the VP of finance, where you basically create a pretty significant leap to the No. 1 role, because you've eliminated a whole [layer]." In other words, she recommends health systems ensure they do not experience a significant brain drain with their reorganization efforts.

4. Do a culture check. When rightsizing executive teams, she recommends health systems take the opportunity to check with all team members to see how they are feeling professionally and emotionally. "Once you have a couple of people leave, the team may think, 'There's going to be a lot of change, maybe I need to start looking,'" Ms. Padilla said. "Be mindful of how that team is feeling. The pitfall is really not communicating."

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