Health System Execs are Resigning in Droves - Why?
In a time of unprecedented change, the healthcare system is facing an existential crisis. Healthcare organizations are struggling to adapt to technological changes that are transforming how care is delivered, and they're also facing rising costs and increasing pressure from payers to lower prices.
Guiding a hospital through the pandemic and post-pandemic arena needs to start at the top. Health systems rely on their executives to navigate these changes. And at the same time, executives are resigning in historic numbers. In fact, the number of health system CEOs who left their positions nearly doubled in the first quarter of 2022 compared to the same three-month period in 2021, according to a report from Challenger, Gray & Christmas.
Is it because the demands of this oscillating landscape are too much? Are there more lucrative, less stressful alternatives for executives to pursue than before the pandemic? Or are they simply burnt out, overworked, and ready to hang up the hat for good?
Well, like most things in healthcare, it's complicated.
How many hospital and health system execs are participating in "The Great Resignation"?
If you're in a leadership position at a health system or hospital, you probably have peers that have already talked about it, or even made the jump themselves. By comparison, as of August 1, 2022, there have been over 62 resignations from top hospital executives since January, whereas there were only 43 resignations in all of 2021 . And it doesn't seem to be getting any better. Since June of this year alone , 18 top executives have vacated their positions, which (at the time of writing this article) is only a two-month time frame.The uptick is alarming, and these resignations often have trickling effects down to their executive and management teams. This, in turn, has led to stagnations in hiring critical roles, further exacerbating the health worker shortage that is at critical levels in many states .
Why are hospital executives resigning?
By the numbers from the Challenger, Gray, and Christmas report, a vast majority of executives gave reasons of either "stepping down" or "retiring" this year, with a noticeably small minority taking up new positions or pursuing new opportunities. So why are they stepping down? Why are so many retiring?
For one, they're tired. Exhausted, actually. Burned out. Frustrated. Overwhelmed. Many are not getting the support they need from their boards and other leaders to do their jobs effectively, so they're stepping down with little warning to regain their sanity (and health). Many of these executives fall into the "baby boomer" demographic, and have simply decided to call it quits. Why waste your retirement years in the throws of all of this turmoil and unprecedented staffing shortages?
One thing is for sure, their salary (or lack there of ) has little to do with their decision to leave. The average annual salary for a large US hospital CEO was north of $1 million in 2019 . With so few taking up or seeking new positions, it seems that many of these resigning executives have found something more important than cash: life. The grind of any job, executive or entry level, can be a boon for confidence, growth, and self-fulfillment. But when that grind has as much friction as the medical industry faces today, with the unprecedented staffing shortages and constantly changing landscape, it doesn't take much time for those cogs to burn out.
Why health system executives are feelings burned out.
You might be thinking, "Well, that's just business." And it's true: There have always been a lot of demands on health system executives. But these days they're also being asked to do more with less.Many hospital CEOs are being asked to take on more responsibilities without increasing their budgets or staffs (and sometimes even with reduced budgets). This puts added pressure on hospital executives who are already extremely busy trying to run large organizations as well as keep up with advances in technology and training management appropriately—not only within their own C-circle, but also across all departments from emergency rooms to finance/accounting to human resources/employee relations.
While there are many reasons why these executives are seeking refuge away from their spacious offices , the constant struggle to juggle all of these moving parts amidst the unprecedented healthcare worker shortage, fears of a recession, and an ever-evolving technological landscape is having an obvious burnout effect similar to the experience of the nurses and physicians they employ.
The impact of health system executives resigning.
A recent article from Fortune posited that it could take up to three months for an organization to fill a C-Suite vacancy in today's market—and those vacancies include ones at healthsystems nationwide.
The bad: an exacerbation of the labor shortage. While there are transition plans for any executive's resignation, there is certainly a reduced capacity to combat the nursing shortage in critical departments like labor and delivery without clear leadership. While department leaders are forced to step up to new responsibilities during executive transitions, their focus can wain from the constant need to attract and retain good nurse talent, especially with organizational changes enacted by an incoming executive. The problem isn't unique to one region; it's happening all over America. And the shortage is expected to continue to be an issue well into the next decade.
The good: while it's difficult to grasp anything beneficial from this mass exodus of health care leaders, there is one thing to look forward to. There are more women being hired in executive positions in the healthcare industry than ever before. The number of women replacing existing CEOs has increased from 15.2% in 2015 to 26.4% in 2021, with that number expected to grow in the years to come. This changing of the guard is giving many people the opportunities they've been seeking for decades, and paving the way for the next generation of health care leaders.
So, what can the hospital system do to retain their staff?
It’s simple: start from the top.An executive needs a board that understands that healthcare is changing rapidly. The board should have regular, open dialogue with the executive team and management staff so they know how things are going on the ground level. An open line of communication between the board, executives, management team, and staff can go a long way with not only retaining the top executive talent, but also the nurses and doctors on the ground floor.
Additionally, with the rapid advances in technology we are expected to see in the next decade, embracing the new can help reduce the burnout the top brass are facing. Improve productivity through technology, improve communication through transparency, improve employee retention through clear direction and well-run departments. These are simple concepts, but ones that need to be heeded to by boards and executives alike. Change is here. And the next generation of healthcare leaders knows they will need to adapt or face the burnout that has caused so many executive resignations today.
Conclusion
The healthcare worker shortage is a vicious cycle. Executives are resigning due to pressures from the shortage, and the shortage is being compounded by executive resignations. The fact that regulations are constantly changing and technology is advancing faster than hospitals can keep up with, adds up to a very difficult job that is prone to burn out.The bottom line is that this wave of resignations is going to continue for some time, and hospital systems and their boards need to be prepared for it, and embrace the future.
