10 health CXO hiring trends

Despite the recent high-profile placement of former Procter & Gamble CEO Robert McDonald, 61, as the new Department of Veterans Affairs secretary, hiring of healthcare industry outsiders for hospital leadership positions remains the exception rather than the norm in the insular healthcare industry reveals a new survey of hospital c-suite executive hiring practices.  

Billian’s HealthDATA and Porter Research examined a sample of news items on 384 hospital executive moves recorded from January to July of 2014 for details such as the positions previously held and personal characteristics like gender. The positions the executives were hired for included primarily CEOs (53 percent), but they also examined COOs (11 percent), CFOs (11 percent), CMOs (4 percent), CNOs (8 percent), and VP or Director-level hires (7percent). They came to the following 10 conclusions about trends in hospital CXO hiring:

1. Healthcare remains fairly insular with just 3 percent of hires coming from outside the health system/hospital market. These non-healthcare-background executives tend to come from the nursing home and surgery center administration roles; academic settings; finance, legal, hospitality and retail industries; and the public health sector.
2. C-suite hiring is up 37 percent for the first half of 2014 compared to the same period last year.
3. Most (53 percent) of the activity is due to the hiring of a new CEO.
4. COOs lead slightly in hospital to health system promotion. They are at 25 percent with CEOs, CMOs and vice presidents/directors each at 21 percent.
5. CEO poaching is common with 58 percent of new hire CEOs coming from a CEO spot at another hospital of healthcare system.
6. Hospital executives are hired from outside the organization in 60 percent of cases.
7. However, internal promotions are also common with 44 percent of internal CEO promotions being moves up from COO. Lateral moves from CEO positions at sister campuses were the second most common scenarios for an internal candidate being selected. These occured in 12 percent of cases reviewed.
8. CIO shifts are rare. Only one CIO promotion to CEO was recorded. The researchers attributed this to the reluctance of healthcare organizations to seek new IT officials in the tight market for people with both healthcare and IT knowledge, as well as an attempt to avoid any major personnel shifts in the middle of digital overhauls.
9. Women represent 28 percent of hires and the most common position they were hired for was CEO (38 percent).
10. Doctors represent 14 percent of hires and these were divided equally between CEO and CMO positions.

Read the full results here.