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The Next Generation of Health Care Leaders: Ten Challenges

by Emily Friedman

First published in Hospitals & Health Networks OnLine, April 7, 2009

What will the health care leaders of tomorrow be like? What skills and characteristics should they have? I was asked by the National Center for Health Care Leadership to address this question in a lecture I presented at the Center's 2008 Invitational Symposium in Chicago in November. This article is based on that presentation.

Emily Friedman

Emily Friedman

We are seeing it everywhere: evidence of change in health administration, a profession that is hardly given to radical shifts in practice or attitude. More women and members of minority groups are ascending to CEO positions. Executives who are front-rank baby boomers are beginning to retire. Many forces — some internal, some external — have spawned a new accountability in leaders.

A Ways to Go Yet

But we are still far from where we need to be — or, for that matter, where we once were. In the 1930s, the majority of hospital administrators were women; in 1940, 50 percent of members of what was then the American College of Hospital Administrators — now the American College of Healthcare Executives (ACHE) — were women. (All data on health administration professionals and students is courtesy of Peter Weil, Ph.D., vice president of research and development at ACHE.) Their numbers began to decline after that and have not yet recovered. Indeed, of ACHE affiliates, only 12 percent of the women are CEOs, and only 41 percent of members are women, although women have constituted the majority of Master of Health Administration students for years. Members of minority groups are doing even less well, representing less than a third of graduate students, a tiny fraction of CEOs and only 22 percent of ACHE affiliates. Furthermore, although attitudes have changed some, old habits die hard. In his excellent study of gender issues in health administration (A Comparison of the Career Attainments of Men and Women Healthcare Executives, 2007), Weil found that although 81 percent of female ACHE members supported efforts to increase the number of women in senior health management positions, only 42 percent of male members did — and that was a decline from 2000, when 53 percent of men did.

For some, change cannot come fast enough; for others, it comes much too fast. I think it is safe to say that women are making progress, albeit achingly slowly, and members of minority groups are doing the same, although at a pace that makes women's progress look jetlike.

Brain Drain

Furthermore, a generational leadership shift is affecting health care in general and management in particular, as the first of the boomer executives start eyeing life in a golf course community — that is, if they were smarter with their investments than most of us were….

In one of his wonderful short essays that he shares with his loyal readers on a regular basis ("President's Musings," July 2, 2008), Leo Greenawalt, president of the Washington State Hospital Association, warned that a "brain drain" is coming in health care, as thousands of seasoned professionals retire. He lamented, "So many of these pros have most of their wisdom about the operations of the hospital and their craft tucked away in their heads. We won't know what is lost until they are gone…. There must be a way to keep this valuable resource from slipping away and to pass their knowledge on to the next generation."

How do we go about doing that? And how do we ensure the quality and capability of the next generations of health care leaders?

Ten Theses

In 1517, a disaffected Catholic priest named Martin Luther decided to make his frustrations public and posted his "95 Theses" on the door of a church in Wittgenstein, Germany. This is generally considered to have been the birth of the Protestant Reformation.

In a minor effort to carry on that tradition, I would like to pose 10 theses concerning the challenges we face in creating the leaders of tomorrow.

Thesis 1: The future leadership pool should be similar to the overall population in terms of gender, racial and ethnic heritage, disability status and sexual orientation. This is neither a radical proposition nor an unattainable goal. As the data tell us, it is happening, anyway — to a point. That point, unfortunately, is in the CEO's chair and the boardroom.

If boards are not educated to open their minds to more possibilities, then there will be a pileup of women in middle management who will get sick of being stymied and go elsewhere. This will be particularly true of one of our most promising potential talent pools: nurses. They move into management to get away from discrimination, not to experience more of it.

With women constituting more than 80 percent of health care workers, and minorities dominating in some health professions, seeking a leadership pool that somewhat resembles our society as a whole is far less radical than seeking one that looks like our own workforce — a workforce that is chock-full of potential future managers and executives, by the way.

Thesis 2: Despite fervent efforts by market-happy ideologues to ignore 25 years of evidence, health care is not a regular business, nor do pure competitive models apply to it. Yes, our organizations need to be operated in a businesslike manner, and competition on certain bases — quality of care, efficiency, community service — is healthy and promotes innovation. But the leaders of tomorrow will learn that the previous generation was wrong about some of the economic basics. Health insurers should not prosper by avoiding the sick; patients should not suffer because they are uninsured; the first reaction to a safety-net hospital in danger of closure should not be to try to pirate its nurses.

We can talk about "focused factories" and business models all we want; the public isn't buying it, and increasingly, neither are policymakers. Many of those lurking behind the waves of attacks on the tax-exempt status of nonprofit hospitals have distasteful and disheartening hidden agendas, but much of what they have revealed is, sadly, true.

In 2008, I published a piece ("Dead Canaries," Hospitals & Health Networks OnLine, Aug. 8) on warnings emanating from hospitals that ran into trouble or that closed because they didn't have the right "patient mix." It drew a great deal of mail. One letter, from an African-American executive and attorney who has spent her entire career in health care, asked a poignant question. She said I was, essentially, calling for a supportive community of hospitals, and she asked, "Do you think there can be such a community?" My answer is yes. Not only can there be; there must be. There is nothing like a hospital, a clinic, a group practice. These are unique social institutions. We are all in this special work together, and what wounds one, wounds all. Tomorrow's leaders must be trained to follow business and competitive models only where they apply appropriately, and only where they do no harm.

Thesis 3: The health care leader works for the board, not the other way around. The era of the spineless board, compliantly doing the executive's bidding, is over. Leaders who don't know who they work for won't last — and their organizations might not, either.

Increasingly, board members are acutely aware of not only their fiduciary duty, but also of their social responsibility as stewards of community resources — which is what health care organizations are, like it or not — and their critical role as representatives of the community.

In an analysis of the 1998 bankruptcy of the Allegheny Health and Education Research Foundation — an event whose shadow still hangs over American hospitals — Moody's Investors Service laid the major part of the blame at the feet of the board ("The 10th Anniversary of the AHERF Bankruptcy: What Have We Learned?" July 2008). The report noted, "AHERF's board of trustees provided minimal guidance to a management team that dominated the system's decision-making and was not held accountable for its actions." That dynamic still exists in some unfortunate places, and anyone who thinks it is a suitable model for the next generation of leaders is guaranteeing that current public and private oversight of health care organizations will be replaced by regulation so draconian it will make existing initiatives look like the Securities and Exchange Commission's recent oversight (or lack thereof) of the financial markets.

Thesis 4: The administration's relationships with clinician leaders must be amicable. I realize that some physicians and nurses are driven by base motives such as greed and can cause enormous trouble for organizations, but disempowering clinicians is not acceptable, whether it is sought by managers or other clinical professionals. I recently met a nurse practitioner who is perfectly content to work in a CVS Minute Clinic the size of a small broom closet, often with little to do. I asked her if she enjoyed it, and she said, "It sure as heck beats working for doctors."

Nurse-physician conflict is hardly news, and many physicians are misdirecting some of their rage over rising expenses, lower incomes, payment hassles, regulation and lawsuits against the hospitals with which they work. But it is still safe to say that it was on the watch of current health care leaders that relations with clinicians deteriorated into open warfare in so many places. The next generation must find another way.

Thesis 5: Executive compensation must be reasonable and have a sane relationship to the income of the lowest paid worker in the organization. A recent study found that the average Fortune 500 CEO makes 821 times what a minimum-wage worker earns. The average CEO makes 344 times what the average worker earns. Although the situation is not that extreme in most of health care, we do have our own stellar examples, some of which have been emblazoned across the pages of The Wall Street Journal, USA Today and other publications.

The populist rebellion against the greed that collapsed our financial markets — which culminated in what can only be described as a throw-the-bums-out election — should produce in health care leaders a healthy dose of caution. In most countries, top executives do not earn more than approximately 25 times what their lowest-paid employees earn — not by fiat, but by custom. It is a custom we would be well advised to adopt, especially in the nonprofit sector.

In light of recent events, board compensation and perks should be examined as well. I am not entirely comfortable with the fact that people can make a very good living doing nothing but serving on corporate boards. If that is their main source of income, we must ask what they are willing to do to keep it flowing.

Thesis 6: True leaders are not intimidating. When Larry Sanders, chairman and CEO of the Columbus, Ga., Regional Healthcare System, was diagnosed with cancer a few years ago, he received an anonymous letter from one of his employees, telling him simply that those who worked for him were grateful that he was sharing his journey with them, that they appreciated that he was always available to them, that they were praying for him, and that he was the best boss anyone could have. The writer did not provide his or her name because, she or he wrote, it could have been written by anyone in the organization.

That is one superb side of the leadership equation. The other side can be found in those organizations in which the employees are terrified of management and afraid to speak up. There are more than a few of these.

Tomorrow's health care leaders must guard against intimidation. That requires positive action, not just being nice, because in the average hospital, the hierarchy is inherently intimidating. If you're a security guard, in many settings, the CEO might as well work on the moon.

Breaking down barriers to ensure an honest, interactive and open organization is the responsibility of the leaders. It also has many beneficial side effects because the general attitude in such places tends to be infectious. Treating your employees as you wish them to treat the patients is a pretty good idea.

That includes tolerating mavericks when it is appropriate. The nonpareil employee, the one who questions a rule or policy, the troublemaker, the manager who openly asks if the emperor is actually wearing anything, can be the person who produces the innovations that move the organization forward.

Non-intimidating, inclusive management is welcoming management, and what else should a caring organization have but that?

Thesis 7: Think for the long term. This is not easy for Americans. We don't want to think in terms of five or 10 years down the line, of what the organization should look like in 50 years, of who our successors should be and how to groom them. Indeed, the National Center for Healthcare Leadership, in its research, has found that succession planning is far from ideal in many health care settings.

That has to change. Too many organizations have gone down because there was a personality cult surrounding the CEO or the medical director or the chief of nursing, and when that person left, the whole place went to pieces. No one wants to think about his or her firing, retirement or death, but if we are to avoid organizational death, then we must look at our own passing from the scene.

Otherwise, Greenawalt's brain-drain warning will come to pass: The enormous body of knowledge built up by older generations will be squandered, and those who come after will have to learn it all over again.

Write. Teach. Mentor. Share. These should be the watchwords for those who work with the young because if we do it, they will do it, and the legacy will continue through the years.

Thesis 8: Leaders set priorities and make sure everyone in the organization embraces them. Take a look at the mission statement. If it is still applicable, everyone in the organization should realize that it is not a decoration for the waiting room wall, but rather a living declaration of purpose. If it is out of date, re-create it.

If, for example, the organization is committed to reducing racial and ethnic disparities in access and health status, then it is not just the clinicians, but also the admitting staff — indeed, especially the admitting staff — who need to be sensitive to this issue.

If improving quality is a commitment the leadership has made, any employee should be empowered to take action to protect patients, even if it ticks off some clinical pooh-bah.

Employees who act on commitments the organization has made should be celebrated, not ostracized. A key element in creating a sincere organization is that everyone who works there should be allowed some latitude to do what the leaders claim they want them to do.

Thesis 9: True leaders walk the walk. No leader whose personal and professional behavior varies from what she or he professes to be her or his code is of any use to anybody.

We have all encountered them: The CEO who brags about leading an equal-opportunity organization and then sexually harasses nurses. The board chairman who harps on clean contracting then cuts secret deals with favored vendors. The chief of staff who preaches a team approach to quality improvement then terrorizes medical residents. The CFO who pushes for reporting transparency, but who also has his hand in the till.

Hypocrisy is a poison. It taints the central nervous system of the organization because it causes loss of respect, loss of commitment and loss of faith. An organization's workforce should be its best friend, but it can also be the organization's worst enemy if it no longer believes in the leaders because the leaders' actions have nothing to do with their high-minded pronouncements.

Keeping one's own behavior clean is not just advisable; it is critical. Don't poison your organization with stupid, selfish behavior. The example you set will be the standard for those who come after.

Thesis 10: Tomorrow is all we've got. The only chance we have for a good future, for the long-term fulfillment of our aspirations, for a better day to come, is to ensure that there will be leaders who care, who are committed, who can take the torch the next hundred miles. The only way to stop suffering, dying, waste, greed and just plain stupidity is to set in place leaders who will not allow these things to continue, who will say, "Enough is enough, and change must come." In terms of whatever we were unable to accomplish, we must do everything we can to ensure that those who come after us will get to the other side of the mountain.

Elegy for a Teacher

In October 2002, Sen. Paul Wellstone (D-Minn.), 58, died in a plane crash. He was an educator (and a troublemaking community activist) before he entered politics. He advocated for, among other things, parity for mental health in insurance coverage and universal health insurance. Having been diagnosed with early stage multiple sclerosis shortly before his death, he undoubtedly would have continued to be a strong voice for social justice in health care had he lived. Frankly, he would have done so even if he was perfectly healthy. He believed in the future.

After Sen. Wellstone's death, the wonderful Minnesota poet Bill Holm (who, in a loss for all those who love the beautiful use of words, died Feb. 25 this year) wrote an elegy for him. It is a fitting description of what we should strive for in preparing the next generation of health care leaders. It reads, in part:

So we go on to write the same poem
Sing the same sad song yet once more
Not for the dead who have gone
Over to the insensible kingdom
But for us who must now carry on
Without them. This time, as so often
Before, Death snatched a big one
When we could not stand to lose
His voice that spoke, not alone,
But for us millions who longed
For a world green, alive, about to bloom.

Let us, then, commit ourselves to the next generation, and to a leadership ideal of compassion and involvement, so that we will be remembered for leaving behind a world green, alive and about to bloom.

Copyright ©2009 by Emily Friedman. All rights reserved.

Emily Friedman is an independent health policy and ethics analyst based in Chicago. She is also a regular contributor to H&HN Weekly.

First published in Hospitals & Health Networks OnLine, April 7, 2009


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