The four organizations studied vary with regard to mission, available resources, political constituencies, organizational complexity, and turbulence of environment. These differences, I believe, affect the work that CEOs do and should do, as well as the roles they play and the functions they perform.
On the circumstances that the CEO of Washington Medical Center faces, George comments:
The most important aspects of this job have to do with quality of patient care and enough... participation in the academic side to ensure that it is held up as well... You must work with the chiefs to develop objectives that are consistent with institutional objectives but uniquely tailored to the needs of the departments... It's a mistake to think that you will direct these people. You can influence them, but you don't tell them, this is what you're going to do.
Contrast this to Martin's observations on managing Van Buren Hospital:
I also leave behind the sense that the CEO is really the key: he sets the style, attitude, and spirit, signals whether it is a risk-taking place or not, defines institutional choices.
These two examples point up the differences between an effective CEO in each organization. Martin is likely to involve himself more thoroughly in fewer projects. If he participates less intensively in more projects, which is how George must manage in order to be effective at Washington Medical Center, he may manage less effectively. Conversely, George might do poorly at Van Buren because his skills and experience do not fit the organization's circumstances. Because of disagreement about what large health care organizations should do and how they can best produce their services, these organizations tend to require CEOs with well-developed political skills. As Sam Woodrow, CEO of Wilson HMO, states,
The CEO needs to balance several, at times competing and priorities in the Wilson environment. It is necessary to take into consideration that our various constituents, the board, organized labor, our medical groups, and major accounts such as the city, may have differing interests on any given issue. I must seek consensus to move forward on major issues, and it often needs to be broad consensus. Moreover, the needs of our constituents must constantly be balanced with Wilson's needs in order to succeed in a highly competitive environment. This calls for strong political and negotiating skills. This also requires the CEO to be out front on issues-to be the consensus builder and not just sit back and wait for it to happen (particularly in the areas of physician credentialing, delineation of privileges, and review of physician work as indicated in the medical record). Another area of CEO involvement in quality, as indicated by the respondents, is the hiring and firing of clinical chiefs of service.
Increasing Organizational Size and Complexity
The last crosscutting theme has to do with the increasing size and complexity of health care organizations and the implications for organizing the executive office. For example, Washington Medical Center is already a vast and complex institution with a mission of excellence in teaching, research, and service. Now it must consider as well the creation of affiliated networks for teaching and service and a response, with its medical staff and faculty, to managed care organizations. At the same time, it is attempting to raise funds and obtain approvals for a massive facility reconstruction program. Cleveland and Van Buren hospitals are discussing merger, and both are diversifying into areas other than inpatient medical care, such as ambulatory and long-term care. Wilson HMO is developing new products (IPAs and PPOs) and expanding into new regions. Both Wilson HMO and Cleveland Hospital have recently acquired other health care organizations through merger.
CEOs are spending a great deal of time outside their institutions. George observes:
The CEO must be aware of the external environment and anticipate changes that must be made “I have to be outside a good deal to sense what's going on in the environment and bring it back to the institution. I spend one-third of my time outside the institution or on outside matters.”
Martin worries about further expansion of Van Buren Hospital through merger and its effect on his job: What I fear about the merger situation is that the honeymoon is over in terms of what I've built here-I will have to set up new relationships and redefine the role of the institution. There's nothing in this but trouble for me...
Grover sees his job as moving away from day-to-day management:
My job is changing to become more policy-oriented. I spend more time outside the hospital on quality of care, malpractice, and reimbursement methodology. That produces problems back in the hospital and puts a lot of strain on me personally.
Woodrow would like to spend less time on day-to-day management; in his words: The pressures of overseeing a multistate health system are forcing changes in my present method of operations. The holding company will give me the opportunity to do that. It will force me to concentrate more fully on system-wide issues and new ventures.
In all four organizations, despite the presence of a chief operating officer, the CEO remains involved in operations and spends less time than three of the four desire or think appropriate on policy formulation and program development. Paradoxically, three of the four are said by some associates not to spend sufficient time on operations. On this point, a clinical chief at Cleveland Hospital (whose entire interview is not published here) observes with regard to Grover:
The person at the top becomes divorced from day-to-day problems; he loses contact and loses his grip. Hospitals aren't used to this type of corporate structure. When I came here, there was more involvement in day-to-day problems than there is now... He doesn't even know that acute episodes are taking place. There are recurrent quality-of-care problems in certain services. He should be aware that the chiefs of certain services are not doing what they should about it.
Two of the CEOs say that they are hesitant to place COOs completely in charge of operations, either because the COOs are not fully trusted or because the CEOs are reluctant to yield responsibility. Woodrow, of Wilson HMO, comments:
I must have confidence in the people I am delegating authority to, and the number of people I feel that confident about is limited. Experience, unfortunately, supports a cautious approach. At my previous job there were no more than three or four people I felt comfortable delegating broad responsibility to, and, given the size and diversity of this organization, I need to reach the point where I can have strong confidence in more people. Until that happens, I'll always be spread too thin.
In none of the four organizations does it appear that the COO is being groomed to eventually become CEO.
