Healthcare Turnover Rate Dips Again for Hospital CEOs

July 01, 2021 - The healthcare industry faced its most challenging year in modern history in 2020, yet the healthcare turnover rate did not increase, at least among hospital CEOs.

According to a recent report from the American College of Healthcare Executives (ACHE), the hospital CEO turnover rate dropped to 16 percent, the lowest rate the group has calculated since 2011.

“The year 2020 was an unprecedented year and strong leadership teams were essential to taking care of patients. Our recent data suggests that turnover remains relatively stable,” Deborah J. Bowen, FACHE, CAE, ACHE's president/CEO, said following the release of the report.

The report used data on changes in a hospital’s CEO as reported to the American Hospital Association (AHA) and confirmed by ACHE data and public sources.

The healthcare turnover rate among hospital CEOs has been falling over the last couple of years. In 2019, for example, the rate was 17 percent, and before that, 18 percent. From 2016 to 2018, the rate had stabilized at 18 percent.

The rate among hospital CEOs, however, was much higher in some states and areas. In the District of Columbia, for example, ACHE observed a 40 percent turnover rate. Maryland followed with 33 percent and Wyoming with 30 percent.

The states with the lowest hospital CEO turnover included Rhode Island (0 percent), Massachusetts (6 percent), and Vermont (7 percent).

“While we do not collect data on why CEOs depart, we do know there are a variety of reasons driving turnover, including leaders moving to other roles or departing organizations,” Bowen stated. “To ensure the strength and viability of the organizations in advancing health for patients and communities, boards and senior leaders need to remain vigilant in ensuring their succession plans and their development practices are relevant and up to date.”

That may be especially true as hospitals look to a post-pandemic future. Hospitals likely lost over $323 billion in 2020 as patient volumes and revenues dropped under shelter-in-place orders and COVID-19 cases surged, according to estimates from AHA. And those losses will more than likely deepen in 2021, the hospital group reported, because of ongoing volume and revenue challenges.

“When we talk about the historic financial challenges hospitals face, it’s about more than dollars and cents, it’s really about making sure hospitals and health systems have the resources needed to provide essential services for their patients and communities,” Rick Pollack, AHA president and CEO, said in a press release earlier this year.

Hospital leadership teams have been at the forefront of crisis management and now recovery. Hospital CEOs and other executives were charged with making the difficult, yet critical decisions necessary to get a handle on the virus while keeping operations running.

Easier access to leadership helped healthcare organizations overcome the challenges presented during the COVID-19 pandemic, according to an article seven healthcare leaders wrote for Harvard Business Review.

However, once the initial surge of COVID-19 passed, many organizations transitioned back to more traditional leadership structures—a move the healthcare leaders said could stymy innovation, especially in the face of new post-pandemic challenges.

They advised healthcare leaders to take lessons learned from the COVID-19 pandemic and apply them to the future. Those lessons include publicly acknowledging the uncertainty inherent in healthcare, focusing on the search for the most pressing issues, and delegating authority when appropriate.

Most importantly, the healthcare leaders said healthcare leadership simply needs to be there.

“Senior leader visibility and availability is an essential precursor to all of the above,” they wrote.

Reducing hospital CEO turnover or at least ensuring a smooth transition when turnover is inevitable is key to applying these leadership lessons to the future.