The churn rate for hospital CEOs fluctuated between 14% and 18% for a decade, but spiked to 20% last year, the American College of Healthcare Executives says.
One-in-five hospital chief executive officers churned through the job in 2013, a record rate of turnover, according to the American College of Healthcare Executives.
ACHE tracking data released this week put CEO turnover at 20% in 2013, the highest rate since ACHE began analyzing the numbers in 1981. In the decade before 2013 the turnover rate had fluctuated between 14% and 18% and was at 17% in 2012. ACHE’s CEO turnover rates are based on leadership changes organizations report to the American Hospital Association.
Deborah J. Bowen, president/CEO of Chicago-based ACHE attributes the record-high churn to a combination of factors. “Turnover happens because people can leave for better positions, turnover happens when hospitals close, turnover happens when hospitals consolidate and changes are made in leadership,” Bowen said in a telephone interview. “There are demographic reasons too, with people who are just retiring and exiting.”
Bowen added that “there is a lot going on in the industry right now” and that some executives might not have the enthusiasm to contend with the sweeping changes mandated under the Patient Protection and Affordable Care Act, continuing Medicare reimbursement challenges, various performance measures, along with complex mandates around healthcare IT interoperability.
“We are seeing it reflected in the turnover,” she says.
Bowen says she doesn’t know if this high hospital leadership turnover is a temporary blip or the new normal. “I don’t have a crystal ball about the future,” she says. “We will have to see, but this is a challenging and dynamic time in healthcare, so obviously we are going to watch this with interest.”
Either way, the turnover suggests that hospital leadership and trustees should evaluate their succession planning, she says. “Executives need to be thinking about not only the short-term problems they have today but the sustainability of the organization.”
“If I were trying to take away the lessons learned here obviously boards and senior leaders want to pay close attention to succession planning and things like that because when you have a lot of churn in senior leadership that is not necessarily a good thing for hospitals. Any change management strategy usually takes a minimum of three and more like five years, and with tenure we are seeing the incremental range sliding down too. So if tenure is going to be about four years and that change management strategy takes about five years, then that could lead to more disruption than is ideal for long-term planning.”
Alaska’s 37% adjusted turnover rate for hospital CEOs was highest in the nation in 2013.