MD or MBA as CEO? Wrong Question?
As I’ve worked with different hospitals and different leaders, I’ve sometimes wondered if there’s been a study on the differences in results between hospitals that have a physician CEO vs. those that have a non-physician CEO. Which hospitals have better quality? Which have better financial results?
The New York Times “Well” blog recently addressed this question in a post called “Should Hospitals Be Run by Doctors?”, citing a study published in the journal Social Science & Medicine, Should hospitals be run by doctors? The more I think about it, I wonder if that is even the right question to ask?
One study showed that only 235 of the 6,500 hospitals in the U.S. are run by a physician. I was surprised the number was that low.
From the Social Science & Medicine study, they concluded:
The study found that overall hospital quality scores were about 25 percent higher when doctors ran the hospital, compared with other hospitals. For cancer care, doctor-run hospitals posted scores 33 percent higher.
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The NY Times piece rightfully points out that the study could be confusing correlation with causation, that physician CEO candidates might be drawn to the hospitals that were already performing better.
It may be that top hospitals are simply more likely to seek out doctor leaders, and top doctor managers seek out the best hospitals. However, the study notes that at the very least, the data show that the best hospitals appear to be choosing physician executives, while lower-ranked hospitals typically rely on managers with a business or administrative background.
The study shares some of the expected stereotypes, that business people are naturally more concerned about the bottom line and physicians are, of course, more concerned about patient care. That’s quite a generalization.
The study also cites one reasonable reason that a manager who understands the real work would be more effective:
They are more likely to better understand the conditions under which their fellow core workers â€” doctors and nurses â€” will function best,” she wrote in an e-mail. “If a leader creates optimal working conditions for the core workers, then that is likely to create a more efficient organization.”
There’s been a similar debate in the auto industry for a long time about who should be leading, summed up by the title of the new book from former Chrysler and GM executive Bob Lutz: Car Guys vs. Bean Counters: The Battle for the Soul of American Business. Bob Lutz is a “car guy” and he was fed up with the “bean counters” making short sighted decisions (read more about that here).
Maybe instead of painting all doctors and all administrative/business people with the same broad brush, maybe it all comes down to behaviors.
At a department level in a hospital, the most effective organizations are those who have an incredibly strong partnership between their clinical director and their administrative (business) director. When there’s a great Lean culture, they tend to have the same mindsets and behaviors – things that would “create optimal working conditions” as the NY Times put it.
Maybe hospitals need a similar tandem of physicians and business leaders? Departments often have co-directors, why not co-CEOs for the hospital?
John Toussaint, MD, CEO of the ThedaCare Center for Healthcare Value has shared his framework of behaviors that he categorizes as “white coat leadership” versus “lean leadership.” Toussaint explains that the white coat, as traditionally worn by doctors, can breed an arrogance and other attitudes that get in the way of effective leadership. He always points out, as well, that white coats can be worn (in spirit) by non-physician executives, as well.
So, I’d suppose John’s theory is that hospitals who are run by “white coat leaders” would underperform hospitals run by Lean leaders. It will be interesting to see that study when it is done.
What would you expect the results to be? How many “Lean improvement leadership” style CEOs do we have right now?