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Hospitals turning to outside CEOs, survey finds

December 18 2013

An estimated two-thirds of hospital CEOs hired in 2014 will have little to no healthcare sector experience, in favor of non-industry productivity, business development and financial management experts with heavy technological expertise, according to a poll conducted by Black Book Rankings.

Respondents reported 39 percent of CEOs hired in 2013 came from another hospital CEO position, down from 79 percent in a 2009 Black Book survey.

Survey participants chose the following industries as those with the most intriguing new hospital CEO candidates:

  • Venture capital, private equity: 42 percent
  • Finance and accounting: 40 percent
  • Banking: 32 percent
  • Technology: 22 percent
  • Marketing and sales: 19 percent
  • Not-for-profits: 14 percent
  • Pharma/biotech: 12 percent

“An outside hire will not have developed hospital management skills from within or understand an organization’s unwritten rules at first, but that’s not a bad thing either as more hospitals face fresh ideas to avoid bankruptcy, expedite smoother consolidations, conquer payment reform and productivity issues,” said Doug Brown, managing partner of Black Book.

Black Book’s research also reveals the average tenure of a hospital CEO is now less than three-and-a-half years, and 56 percent of CEOs’ exits are involuntary. Additionally, secondary turnover of other senior managers ripples through most other nonclinical/medical leadership positions after a CEO exits. Nearly half of CFOs, CIOs, and COOs are terminated within nine months of a new CEO’s hire, as well as 32 percent of chief human resource officers and 24 percent of chief marketing officers.

The survey included 1,404 healthcare provider organizations’ human resources officers and board members.

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