Who’s In Charge Here?
In "The Script Pad" blog Dr. Cook expresses his opinion on who is best equipped to lead hospitals. According to reports 35% of hospitals were led by physicians in 1935 but has since declined while the percentage of hospital administrators has soared. Although some have argued that physicians lack the experience and skills to be effective hospital leaders they have learned the importance of patient care which plays a pivotal role in executing the mission of a hospital. Studies also found a correlation between the ranked quality of a hospital and whether the CEO is a physician. By tracing the origin of leadership in hospitals Cook found that it is critically important for physicians to become more engaged in hospital management.
Who’s in charge here?” The phrase conjures up any number of images. Maybe it’s an angry drill sergeant stomping into a barracks in disarray. Or maybe it’s the Tim Allen character in “The Santa Claus Movie” demanding of the elves an explanation as to why he’s at the North Pole. Lately, for me, it’s what I think when I consider leadership in hospitals across the U.S.
Let’s begin with some background. In 2014, “Physician Executive” (published by the American College of Physician Executives) reported that in 1935, 35% of U.S. hospitals were led by physicians. By contrast, in 2014, only 3.6% (235 of 6500) U.S. hospitals were led by physicians. It also noted that a substantial majority of physician led hospitals are affiliated with academic institutions.1 What could be the force that would drive a change of such magnitude?
Late in 2017, “Becker’s Hospital Review E-Weekly” reported that the number of physicians in the U.S. grew about 150% in the period from 1975 to 2010. By way of comparison, the number of healthcare administrators grew about 3200% over the same period.2 There are those who would suggest that the increase in administrative personnel in hospitals is a direct result of increasing demands of regulation and technology. Additionally, many would argue that physicians lack the skills and training of traditional executives including such categories as “systems awareness”, “strategic focus”, “management and business skills” to name only a few. In a 1972 issue of “Forbes” the assertion was made that healthcare business had become “too important to leave in the hands of physicians.” I’m skeptical of that position and this post will offer my own thoughts on whom is best equipped to lead hospitals and why we’d be well- advised to give it some serious thought.
There is no argument to be made against the reality that management of healthcare is far more complex now than in 1935. But where is the prima facie evidence that physicians are ill- equipped be effective hospital leaders? And, absent that evidence, why have physicians gradually relinquished their role as hospital leaders to others with no experience and no understanding of the demands, challenges, and obligations of clinical practice? To answer those questions, it’s imperative to examine how healthcare delivery has evolved in the U.S. over the past half century.
I think it’s fair to say that the seismic shift in healthcare economics occurred in 1965 when President Lyndon Johnson signed Medicare into law and issued the first Medicare card to former President Harry S. Truman. The annual Medicare budget that year was about $10 billion. For fiscal year 2018, Medicare spending reached $750.2 billion. And to be sure we look at the entire picture, total healthcare spending in the U.S. during 2018 was $3.6 trillion, or $11,172 per person, and accounted for 17.7% of Gross Domestic Product (GDP).3
I’m sure those numbers were terrifying to a lot of hospital boards and it was easy to think that management of such sums was better left to the “experts.” Fortunately, there is actually some evidence to address that assumption. Dr. Amanda Goodall is a respected scholar in the field of expert leadership. She published a paper in 2011 entitled “Physician Leaders and Hospital Performance: Is There an Association?” I’m referencing the paper below, but I’m quoting her conclusion here: “The paper finds a strong positive association between the ranked quality of a hospital and whether the CEO is a physician (p<0.001).” 4
Suffice it to say there is other objective evidence to support my point, but this is a blog, not a review article, so I’ll get back to my opinion. In the early 1970s, there began a divergence of priorities in healthcare where physicians tended to follow the path of quality of care, while ceding responsibility for revenue management to what was thought to be a more appropriate expert culture, i.e. the business school graduates. What we see now are hospital CEOs demanding salaries in the high six and even seven figure range, while nurses and other “round the clock” personnel are forced to work with too few staff and too few resources for too many hours.
Please understand that I realize not all hospital administrators are monsters. But my four- decade history as a practicing physician has shown me that far too few of them truly understand the mission that a hospital serves. I am also aware of the Sister Generose Gervais quote “no money, no mission.” In my opinion, it is critically important for physicians to become more engaged in hospital management. To do so effectively, they will need to acquire some skills that were not taught in medical school. One place to look for help with such skills might be with either classroom or online business education courses. Another option might be personal/professional coaching. But those skills should be acquired in addition to, not instead of at least five to ten years of full-time patient care. That’s where we learn why we’re here.
1. Angood P, Birk S. The value of physician leadership. Physician Exec. 2014;40(3):6-20.
2. Growth of healthcare administrators outpaced physicians, increasing 3,200% between
1975-2010, Alyssa Rege, Becker’s Hospital Review E-Weekly - Thursday, November 9th, 2017
3. https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and- Reports/NationalHealthExpendData/NHE-Fact-Sheet
To read more of Dr. Randy Cook's blog "The Script Pad" go to https://mymdcoaches.com/blog. Dr. Cook is also host of MD Coaches, LLC's weekly Rx for Success Podcast found at http://rxforsuccesspodcast.com.
MD Coaches, LLC is a company dedicated to developing and empowering physicians to realize a greater satisfaction in their roles. Understanding the challenges and operational concerns for both physicians and hospital administrators. MD Coaches utilizes experience and coaching skils to support their physician clients in establishing strategies for positive career progression.