Healthcare CEOs with no healthcare experience: It’s a good thing

In 1751, Dr. Thomas Bond conceived Pennsylvania Hospital – the nation’s first – as a place “for the reception and cure of the sick poor… free of charge.” By the 1900s, healthcare had become more organized, and nobody expected doctors (or the hospitals they worked in) to offer care for free. In the ‘70s, healthcare costs began their meteoric rise, and hospitals found themselves caught between the rock of financial reality and the hard place of altruistic care. Healthcare is starting to act like a business, and it’s starting at the top.

According to a recent Black Book Rankings poll, reported in Healthcare Finance News, tomorrow’s hospital CEOs won’t have healthcare experience, but they will know all about business development, financial management and technology. It’s about time.

Healthcare is facing some difficult decisions about how to provide higher quality care to larger populations with higher morbidity – at a lower cost. Today, and going forward, healthcare organizations are in the business of health. But for centuries, they have believed and acted as if they were in the business of care. Just ask Eastman Kodak and the railroads about the danger of forgetting what business you’re in.

As Vijay Govindarajan points out in The Other Side of Innovation, there are three traps companies can fall into:

  1. Physical, holding tight to and pouring money into archaic systems instead of investing in new, improved and more capable ones;
  2. Psychological, thinking what always worked always will, and not noticing that what is working is something new.
  3. Strategic, focusing exclusively on the now without anticipating the next.

For healthcare organizations, avoiding those traps calls for:

  1. New technologies, such as voice-enabled EHRs and Big Data MPIs;
  2. New care and reimbursement models, such as ACOs;
  3. New ways to foretell the future, such as data analytics; and
  4. New perspectives on how to deploy all these things.

The Point: Looking outside healthcare for leaders with business minds is exactly what healthcare should do to work better as a business.

Talent trumps title.

One thought on “Healthcare CEOs with no healthcare experience: It’s a good thing”

  1. Thanks for the great content Janet. Although Govindarajan’s book is now a bit dated – these traps are still applicable today. In order to provide better Healthcare services, Healthcare organizations should be wary of these traps and focus on innovating cumbersome processes. With digital signatures, electronic forms, and an ECM system – there is little that can’t be automated.

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