Hospital CEO turnover rate dipped in 2019 for the first time in five years

By | September 16, 2020

The turnover rate for hospital CEOs dipped slightly in 2019 to 17%, after remaining at 18% for the last five years, according to a recent report from the American College of Healthcare Executives.

Since 2012, the turnover rate was 17% or higher, which is the longest period of time the rate has been so high since ACHE began the survey in 1981.

Across the country, rates change drastically, from 2% in South Dakota to 40% in Delaware.

ACHE’s hospital CEO turnover rates are calculated based on changes in an organization’s CEO, as reported to the American Hospital Association and confirmed from ACHE data and public sources.

WHAT’S THE IMPACT

Even with the dip, the turnover rate remains higher than in the past. This can be attributed to organizations working to meet the evolving healthcare industry, according to ACHE CEO and President Deborah Bowen.

Part of that work, she said, is restructuring the movement of CEOs to put them in different positions within health systems.

Additionally, as more CEOs reach retirement age, health systems must prepare for their eventual departure by creating succession plans and training new leaders, Bowen said.

THE LARGER TREND

In a previous report conducted by ACHE, the organization examined the impact of hospital CEO turnovers.

It found that the average tenure of a CEO was about five years and just over half (51%) had previously been a CEO at another hospital.

When it came to why they left their position as CEO, about two-thirds said the decision to leave was entirely or mostly their own decision.

The majority of CEOs perceived that community relations, medical staff relations, hospital culture, and employee morale suffered as a result of their departure. On the other hand, 60% to 73% felt like turnover improved financial performance, employee morale, medical staff, board and community relations, and hospital culture when they took over as CEO.

“CEOs seemed to suggest that the departure of the previous CEO was, in essence, a good thing and had a positive effect on the hospital, while their departures from their former hospitals were problematic and created more negative conditions,” the ACHE report said.

Another factor in hospital CEO turnover is the effects it has on other executives. For example, the report found that within one year of the CEO’s departure, the chief medical officer and the chief operating officer also changed, 77% and 52% of the time.

ON THE RECORD

“Despite the slight drop in 2019, turnover rates in recent years remain at higher levels than in the past,” Bowen said. “Organizations are evolving to meet a changing healthcare environment, resulting in restructuring and the movement of CEOs to different positions within health systems. In addition, more CEOs are reaching retirement age. Our turnover data underline the importance of organizations maintaining a focus on succession planning and developing our new healthcare leaders.”

Twitter: @HackettMallory
Email the writer: mhackett@himss.org

 

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