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Do doctor-run hospitals work better?

By Leon E. Moores, MD, DSc

According to global executive search firm, WittKieffer, the demand for doctors to lead hospitals and health systems has increased over the past three years. What is driving this request? Some say it’s the industry’s transition to value-based care, which focuses on quality care rather than volume-based care.

As a practicing pediatric neurosurgeon, I have spent much of my career in combined clinical and leadership positions in various healthcare organizations. In asking whether quality of care differs in physician-led healthcare organizations, I found little evidence-based research measuring hospital performance against physician CEOs versus non-physician CEOs. As such, I chose this research topic while pursuing my Executive Doctorate in Healthcare Leadership Sciences at the University of Alabama at Birmingham. In 2021, my thesis “Reported Clinical and Financial Performance of Hospitals with Physician CEOs Compared to those with Nonphysician CEOs” was published in the American College of Healthcare Executives’ (ACHE) Healthcare Management Journalfrom November/December 2021.

Given that existing leadership theory and some research suggest a relationship between technical expertise and success in leading highly technical organizations, I hypothesized that hospitals led by physician CEOs would report levels of higher clinical and financial performance than hospitals with non-physician CEOs. Single-year cross-sectional analysis of US acute care hospitals showed no difference in reported performance. The sample population included 190 hospitals, half (95) with non-physician CEOs and half with physician CEOs, randomly selected from over 1,900 US surgical medical hospitals in the AHA database with over forty beds. All CEOs had at least one year in office. Three standard reported quality measures were chosen: actual/predicted rates of central line-associated bacteraemia (CLABSI), 30-day risk-adjusted acute myocardial infarction (AMI) mortality rates, and readmission rates 30-day risk-adjusted excess for pneumonia. Financial performance was assessed based on return on assets and operating margin of hospitals. The study also controlled for 13 hospital characteristics and market factor variables.

This analysis did not support the assumptions that hospitals with CEO physicians report

better clinical and financial performance than hospitals with non-physician CEOs (at the 95% confidence level). The data showed that physicians were more likely to be CEOs of teaching hospitals, nonprofit hospitals, and large hospitals. Physicians were also more likely to run system-owned hospitals.

This was a very focused review and therefore subject to a number of limitations. This study does not imply causality due to the retrospective nature of a cross-sectional analysis of the data. Second, this study used only one year of data, which for many reasons may not be representative of longer-term performance. The tenure of the CEO is important because there is often a lag between the appointment of the CEO and the CEO-induced changes in organizational outcomes. This study included CEOs with more than a year’s tenure, giving over 25% of CEOs with less than two years’ tenure. Finally, the study did not examine additional hospital characteristics and/or CEO leadership traits that might be better predictors of clinical or financial performance.

As mentioned earlier, little empirical work has been done to compare the performance of hospitals with physician CEOs versus non-physician CEOs. Further work in this area could be useful to inform recruitment and selection processes for hospital CEOs. Future studies could consider independent variables of hospital size, teaching status, nonprofit ownership, or clinical leaders from other professions such as nurses, therapists, and technicians. This work adds to this discussion and hopefully will be helpful.

In conclusion, while it may be appealing – and certainly effective – to be able to attribute outsized impact to a single measurable characteristic of a leader (like being a doctor), the data from this study does not strongly support it. It turns out that, like leadership itself, selecting leaders is a complicated business and there are probably no easy solutions to help organizations choose the best-fit leader to maximize leadership performance. ‘hospital.

Dr. Leon E. Moores is Professor of Surgery and Pediatrics at the University of Uniformed Services School of Medicine and Professor of Medical Education at the University of Virginia School of Medicine (Inova).

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