Healthcare needs — and the demands of leadership — have evolved. CentraCare is addressing these shifts through a restructured leadership model.
The St. Cloud, Minn.-based health system implemented a leadership restructuring in July to improve integration, streamline decision-making and enhance collaboration. Among the changes are the creation of a chief strategy and transformation officer role, the combining of certain Minnesota markets, and the elimination of two vice president roles. Three vice presidents of operations were each paired with a physician leader, with all six stepping into expanded roles — reflecting CentraCare’s longstanding physician–operations dyad model, which remains central to how the organization leads and delivers care.
“The reorganization was an attempt to recognize that in the 21st century, healthcare needs have changed,” CEO Ken Holmen, MD, told Becker’s. “In this current environment, there’s a lot of uncertainty and change in how we provide services to our communities. Therefore, how can we organize our leadership team to best address those needs and opportunities?”
A key focus was on ensuring a consistent, systemwide employee and patient experience with top-decile outcomes, Mike Blair, CFO and senior vice president of academic affairs, told Becker’s.
“With all the headwinds that we’re facing in healthcare, we really have to focus on how we can be a top-decile performer in terms of our outcomes and our patient experience,” Mr. Blair said. “This work was not driven around a financial reason. It was really about how we can be the best CentraCare that we can be. If we operationally get better at that, the financials will follow. It’s more about delivering on that value proposition for our patients and their families.”
Legacy organizations like CentraCare are often “bolted together” over decades, Dr. Holmen said.
“How do we operate as a unified organization to address the needs of our citizens, our community, our patients, our customers and our team members?” he said. “‘One CentraCare’ is a really important part of that as an operating company.”
The ‘weird paradox’ of leadership demands
Healthcare leadership needs have changed significantly over the past 35 years — especially in recent years, Dr. Holmen said.
“Not only do we require folks to be experts in their specific area of their role, but we expect them to be remarkable leaders in a broad sense — whether it’s across their division into other areas, to being visible leaders in the community,” Dr. Holmen said.
These evolving expectations, coupled with the uncertainty of today’s healthcare environment, place a premium on effective leadership, he added.
“Leadership that is transparent, strategic, operational — and all those things together in a teamwork fashion — is really important, and that can tax all of us,” Dr. Holmen said. “That is a challenging role.”
Mr. Blair experiences this firsthand in his dual role overseeing both finance and academic strategy.
“That’s how we’re going to push the system forward — always taking on a bit more than what’s in our comfort zone,” Mr. Blair said.
Leaders must also learn to balance clarity and ambiguity, Dr. Holmen added.
“As a leader, there’s a weird paradox that exists. We frequently hear that we need more clarity on what we’re doing and how we’re doing it,” he said. “On the other hand, one of the key hallmarks I look for in leaders is the ability to manage ambiguity. So we’re struggling with this polar conversation. … I really expect our leaders to not only be leaders within the context of their job description, but also to flex across other divisions, and together understand how we make better strategic and operational decisions.”
Key priorities under the new structure
Improving patient experience and outcomes remains a top priority through the end of 2025 and into 2026, Mr. Blair said.
CentraCare has also maintained a focus on achieving a 3% margin, a goal set three years ago. The system has reached 2% and aims to hit 3% in 2025, he said.
Expanding its academic strategy is another central focus.
In July, Minneapolis-based University of Minnesota Medical School opened a regional campus in St. Cloud in partnership with CentraCare, which will increase the medical school’s class size by 24 students annually. It marked the first major step in the health system’s academic affiliation with the university, Mr. Blair said.
CentraCare is also working to expand its residency programs, growing to 72 or more residents and introducing new programs such as psychiatry, internal medicine and general surgery.
“Pediatrics and obstetrics are all areas that have shortages in physicians in Minnesota and we’re trying to fill that gap,” he said. “At the same time, we’re trying to accelerate the research we do focused on addressing healthcare specific to rural residents of Minnesota.”
Dr. Holmen emphasized that leadership success does not rest solely with executives, but also with those in middle management roles who directly influence care delivery. “Mid-space execution” is core to CentraCare’s human resources principle.
“There must be a recognition by senior executives that the really important and critical work is not done by us,” he said. “It’s done by folks at where their patient or the customer interface is with us, and that’s our team members.”
