- Hospitals and financial companies tied for the second highest number of CEO departures in October, with 11 each — trailing only the government and nonprofit sector’s 24 CEO exits, Challenger, Gray & Christmas reports.
- Still, hospitals fared better than in October 2016, when 15 CEOs walked out the door. Since the start of the year, 92 hospital CEOs have exited, 37% fewer than the 126 for the same period last year.
- Overall, U.S. businesses saw 105 CEOs leave positions last month, up 5.7% from the same month in 2016, according to the global outplacement consulting firm.
Hospital CEO turnover peaked at 20% in 2013 and has held steady since at 18%, data from the American College of Healthcare Executives shows. Fueling the exits are consolidation within the industry, the continuing shift to new care delivery models and retirement of baby boomer CEOs, the group says.
Hospitals are also feeling more pressure from investors to meet bottom line goals or be held accountable when they don’t.
A good example is last month’s earlier-than-expected departure of Tenet CEO Trevor Fetter amid continuing financial losses and rumors of a possible sale. His exit followed the exit of two board members from Glenview Management, Tenet’s largest stakeholder, citing “irreconcilable differences” impacting Tenet and its shareholders.
The high-level exits are a reminder that healthcare organizations, at their core, are businesses and need to compete today’s drastically changing marketplace. Hospitals that don’t keep up with their peers are likely to be pressed by investors for a leadership change.
Fiscal savvy is second only to leadership skills on the list of quality’s CEOs need in today’s competitive healthcare market, according to Carrie Hackett, president and managing partner of Grant Cooper, an executive recruitment firm. Hospitals are looking for people who can “strategically plan, develop and execute on short- and long-term goals” and have a sold grasp of healthcare financing issues, she previously told Healthcare Dive.