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Physicians evolving into CEOs: A new trend in post-ACA healthcare

As the U.S. healthcare model shifts from a quantity model to a greater focus on provider quality and outcomes, healthcare institutions have continued to reposition their staff to reflect the increased focus on quality. To adjust, healthcare institutions are hiring doctors to fill roles as top executives within the management structure. Theoretically, physicians are the ones who know how to provide quality care in line with the pay-for-performance initiatives of the ACA.

The increase in doctors assuming these CEO positions has progressed rapidly as healthcare institutions continue to evolve in the unknown period of ACA’s effects. In 2014, five percent of hospitals were physicians led according to a white paper study by the American College of Physician Executives. A survey of 2,000 physicians in 2015, showed that 30% of respondent worked for an organization led by a physician.

Physician-CEOs are the logical consequence of evolution within the healthcare industry as physicians naturally have a better understanding, ultimately, of the services that the hospital is providing to its patients compared to a non-physician administrative executive. This understanding results in a better rapport and understanding with hospital staff and culture. The experience that a physician-CEO brings is a result of their “clinical perspective” has developed over their years as practicing physicians before transitioning into more leadership or management roles. In the U.S., the top five ranked hospitals on the U.S. News & World Report’s Best Hospital’s 2015-2016 ranking are all led by physician-CEOs. Logically it would seem that physician-led hospitals should perform better than their peers. Although the evidence of causation of increased performance is still inconclusive, and a number of factors can influence the success of a hospital aside from the CEO’s background. Nonetheless, the trend of clinical leadership will continue as the industry evolves with further implementation of the ACA.

Just as hospitals have had to adapt to market changes, the educational industry has taken notice of this shift within the healthcare industry and has begun to adjust in conjunction with the healthcare industry to promote their services as well to enable this physician to management transition. Many top business schools across the country offer programs geared toward management within the healthcare industry. The American Association for Physician Leadership offers physician leadership certification programs, showing the demand for traditional education and certification as pre-requisite for leadership qualification.

Healthcare institutions will continue to adapt to the constraints of the ACA, and part of that adaptation will be the positioning of physician-CEOs and “clinical leadership” to redirect healthcare practice to quality that physicians know best. The challenge for some institutions will be finding those leaders who can balance “clinical leadership” with traditional “management.”

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