Academic journal article Journal of Healthcare Management

Ten CEO Imperatives for Healthcare Transformation: Lessons from Top-Performing Academic Medical Centers

Academic journal article Journal of Healthcare Management

Ten CEO Imperatives for Healthcare Transformation: Lessons from Top-Performing Academic Medical Centers

Article excerpt


Healthcare is changing so quickly that if senior leaders are not out in front and doing the right things with their team and people, change efforts will fail and the entire organization will fail.

-Observations of a hospital CEO

The pace and complexity of change occurring in healthcare is greater than ever (Barsukiewicz, Raffel, & Raffel, 2010; Delmatoff & Lazarus, 2014; Longenecker & Longenecker, 2014; Trajkovski, Schmied, Vickers, & Jackson, 2013) and is leaving people at all levels in provider organizations stressed, frustrated, and confused (Delmatoff & Lazarus, 2014). The underlying dynamic in this transformation is the move from a system designed to heal the sick to one that keeps people healthy-a transition from volume to value. Healthcare organizations are altering their practices and cultures to adapt to this new healthcare landscape and produce more efficient and effective patient-centered care (Burns, Bradley, & Weiner, 2012; Porter & Lee, 2013).

Research shows that successful organizational change often starts with CEOs who inspire their people to identify targets, establish strategies, measure outcomes, and reengineer clinical and business processes (Zimring, Augenbroe, Malone, & Sadler, 2008). But organizational transformation is a team sport. cEos cannot operate in a vacuum; without effective leadership at all levels of an organization, the success of sustainable change will be marginal at best (Longenecker & Longenecker, 2014).

This research identified top-performing healthcare institutions and asked the cEos about their imperatives for achieving system-wide transformation. This research found a common catalyst for change faced by all short-term acute care hospitals, the value-based purchasing (VBP) program implemented through the U.S. Department of Health and Human Services, and then identified the subgroup of hospitals- academic medical centers (AMCs)-with the largest hurdles to overcome to succeed in VBP. Quantitative sampling identified the AMCs that adapted their organizations most successfully in this transition and made the most efficient use of resources to accomplish this feat. The CEOs also were asked to identify what their peers did to make their organizations successful. From those interviews, our research identified the 10 most important CEo imperatives for healthcare transformation.


Due to the implementation of the Centers for Medicare & Medicaid Services' VBP, hospital reimbursement is now partially tied to patient care quality/safety, patient outcomes, and patient experiences of care. The VBP program is a zero-sum program; that is, reimbursement to poorly performing hospitals is reallocated to topperforming hospitals. There are clear winners and losers.

Current member hospitals of the Council of Teaching Hospitals and Health Systems (COTH) composed the population of hospitals for this study. Our final population of American COTH members with available data consisted of 275 AMCs. This population was chosen because major AMCs are typically large and care for a disproportionate share of the nation's most complex cases and indigent patients. Large size, teaching status, complexity of care, and high amounts of charitable care have been found to lead to poor performance under the hospital VBP program (Chatfield, 2014; Chatterjee, Joynt, Orav, & Jha, 2012; Jha, Orav, & Epstein, 2011).

Sampling methodology for this study used data envelopment analysis (DEA), which evaluates the performance ofa set of peer entities, called decision-making units, which convert multiple inputs into multiple outputs (Cooper, Seiford, & Zhu, 2011). DEA examines the specified inputs and outputs of a population and identifies the members who produce the most outputs with the smallest utilization of inputs. In other words, DEA identifies the most efficient hospitals. The variables, definitions, and methodological specifics can be found in Appendix A. …

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