As hospitals face increasing financial pressure, boards are looking to replace their top brass.
According to a recent report in the Houston Chronicle, 30 CEOs from medium to large hospitals around the country have left their post in the last six months. Several retired, but many were victims of an industry-wide push to shake things up.
“That’s an increase in turnover, probably a reflection of the current volatility of the healthcare market,” Dr. Janis Orlowski and chief healthcare officer for the Association of American Medical Colleges, said. “Many hospitals are losing money now and the future only looks rockier, with more uninsured and less Medicaid support. Boards want the right person to lead them into such turbulent times.”
Several of the recent departures were in Houston — home to a number of major institutions and a sprawling healthcare landscape that the Chronicle says is known for “tricky geopolitics.”
One of the CEOs, Dr. Ron DePinho, recently left MD Anderson Cancer Center in Houston after more than five years of worsening finances. During 16 months of his tenure, the facility lost $460 million, and in January, it laid off 778 employees. Despite the general hardships in the industry, MD Anderson’s difficulties have been particularly baffling given that cancer care is typically lucrative.
The other CEOs to recently step down in the Houston area included the heads of Texas Medical Center, Memorial Hermann Health System, and St. Luke’s Health System.
The recent struggles of American hospitals are well documented. The expansion of Medicaid under the Affordable Care Act — which reimburses less for patient care — has been a drain on hospitals’ revenue. One recent survey showed that in nearly half of American hospitals, losses from patient care are rising faster than revenue from treating patients.
A shift from fee-for-service to value-based care along with an increasing emphasis on moving patients to outpatient clinics has also strained operating margins for hospitals.
Around the country, a rising number of hospitals have been laying off workers or closing shop all together.