Do physicians make the best hospital CEOs? Should hospital CEOs come from a business background? It’s a debate that has been brewing in the healthcare industry for years and it doesn’t have one answer.

In 2014, only 5% of hospitals were run by doctors, while the majority of hospital administrators came from outside the healthcare profession.  If you read our recent blog “5 Challenges Healthcare Leaders Face in 2015” than you know that the hospital CEO turnover rate hit a record high in 2013. Hospital CEOs are leaving for better prospects, exiting after mergers, and a myriad other reasons. Many hospitals are handling quick CEO turnover rates by spending more time on the hiring process and targeting stronger candidates, ultimately leading them to physicians. In the white paper “Value of Physician Leadership” published by the American Association of Physician Leadership (Formerly American College of Physician Executives), Peter Angood reports that many factors, including the “fundamental redesign of clinical care models”, are putting physicians are the forefront of leadership.

Are Physicians Better Leaders?

According the the AAPL the top five most successful hospitals (John Hopkins Hospital, Massachusetts General Hospital, May Clinic, Cleveland Clinic, UCLA Medical Center) are lead by physicians. The white paper “Value of Physician Leadership” suggests physicians are the bridge between care and management that hospital administration needs. Why? Because they have a deep understanding of how hospitals function on a clinical level. It’s that tenacity and trust combined with extensive industry knowledge that make them excellent leaders.  This doesn’t mean all physicians are equipped to be CEOs as management training, business experience, and vision will always come into play.

Is There a Need?

The time couldn’t better for business minded and leadership trained physicians to take up executive positions. This, again, can be attributed to the fundamental changes healthcare has seen in the past few years, including the heightened focus on safety and quality care. The high CEO turnover rate may also be a defining factor in the increased physician CEO interest. Hospitals are now looking for executives in it for the long haul with fresh vision and physicians with proven management or leadership achievements become a very viable options.  Due to the increased popularity in combined MBA and MD programs, physician are now more business and management savvy.  This means more and more medical school graduates will be equipped the crucial skills to become excellent leaders and doctors.

The Other Side of the Story

The other side of the argument is also ripe with data. Many experts believe that hospitals can benefit from an “outside” approach to administration and that CEOs with backgrounds outside of healthcare have a better ability spot organizational problems (and fix them). In the U.S. News article, “Wanted Health Care CEOs Without Healthcare Experience,” it was predicted that in 2014 “two-thirds of hospital CEOs hired this year will have little to no health care experience.” But why? CEOs outside the healthcare field may have a deeper understanding of business, extensive experience executing projects, and a grasp on financial management, all of which are crucial to hospital strategic planning.

We predict major changes in the hiring processes for C-suite executives in hospitals. Although it’s not clear which way the process will sway (to physician CEOs or non-healthcare CEOs), it’s an interesting debate and one we hope to hear more about this year.

Do you think hospitals should focus on proven physician leaders for C-Suite roles?