The rise of health system chief transformation officers

Facing rising costs, lower reimbursements and increased care demands, health systems are in need of serious transformation. Centennial, Colo.-based Centura Health created a new C-suite position to tackle these positions and redesign the system for future growth.

"We are viewing the current healthcare environment like Joanna and Chip Gaines would — a fixer-upper," said Peter Banko, president and CEO of Centura. "It is an opportunity to completely revitalize our entire connected, enabling health system neighborhood. We started with creating the position of chief transformation officer to help us strike the right balance between short-term improvement and long-term value, taking responsibility for change and ensuring results are delivered ambitiously and quickly, and carrot and stick."

Centura's transformation began in mid-2022, and Scott Lichtenberger, MD, was named senior vice president and chief transformation officer in August of last year. Dr. Lichtenberger joined Centura in 2020 and previously worked for McKinsey & Company. He has more than two decades of healthcare experience. He is focused on ensuring the health system achieves its 2025 strategic plan goals.

Centura isn't the only health system appointing chief transformation officers to guide the organization through uncertain terrain. RWJBarnabas Health in West Orange, N.J., appointed Paul Alexander, MD, chief transformation officer in February 2020, and he has since been promoted to chief health equity and transformation officer. Baycare in Clearwater, Fla., named Emily Allinder Scott senior vice president and chief transformation officer in October 2020 with responsibility for transformation across the system's 15 hospitals.

Many chief transformation officers have clinical backgrounds, either as physicians or nurses, and bring operational leadership expertise to their roles. They also have experience outside of health systems. Prior to joining RWJBarnabas, Dr. Alexander spent time as an executive with Horizon Blue Cross Blue Shield of New Jersey, UnitedHealthcare and AstraZeneca.

McKinsey describes ideal chief transformation officers as striking a balance between short- and long-term goals and ensuring managers are accountable for delivering results. They should have support from top executives, including the CEO, and a clearly defined mandate to take action so goals are met.

"Ideally, they should behave like an extension of the CEO or even the board and as such be able to hold the top managers accountable. The CTO is a high-level orchestrator of a complex process that involves large numbers of discrete initiatives. Responsibility for making the day-to-day decisions and implementing those initiatives lies with the line managers, but the CTO's job is to make sure the job is done. This is not always easy," states an article from McKinsey about CTOs.

Mr. Banko said the transformation at Centura targets the workforce, operational efficiencies and clinical care delivery. The system is reimagining how to retain and attract talent as a distinctive workplace.

"We have minimized the use of contract and other temporary labor, which has, in turn, decreased our costs along with improving caregiver engagement, quality, safety and experience," he said. "We accomplished all this with the launch of staffing summits, where bedside nurses and leaders develop their staffing plans and enable changes, with system nursing and human resources leadership, to better serve the needs of their patients and the patient care team."

As the pace of change accelerates, more health systems may make space for a chief transformation officer within their ranks.

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