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January 4, 2017

What many top-ranked hospitals have in common: Physicians in the C-suite

Daily Briefing

Editor's note: This story was updated on August 3, 2018.

The presence of physicians in a health care organization's C-suite might improve overall job satisfaction—and thereby improve an organization's performance, write Cleveland Clinic physician James Stoller and professors Anges Baker and Amanda Goodall in Harvard Business Review.

August 22 webconference: Learn how the physician workforce is changing

According to the authors, several top-performing hospitals, such as Mayo Clinic and Cleveland Clinic, have been physician-led since they were founded. And they say research supports the practice: A 2011 study examined the 100 best hospitals for cancer, digestive disorders and cardiovascular care—as ranked by U.S. News & World Report—and found that hospitals run by physicians scored approximately 25 percent higher on overall hospital quality than hospitals run by professionals from management backgrounds.

Supervisors with technical expertise might lead to more satisfied employees, survey finds

Evidence from other industries may also support the idea that technical expertise can make for a better manager. In a separate Harvard Business Review piece, Goodall, professor Benjamin Artz, and professor Andrew Oswald point to a new survey showing that employees report higher rates of satisfaction when their bosses have technical competence in their field.

For the survey, researchers polled 35,000 employees from the United States and the United Kingdom on factors related to their job satisfaction. They used three questions to measure supervisor competence: whether the supervisor could do the employee's job, whether the supervisor had worked his or her way up inside the company, and the supervisor's level of technical competence as assessed by a direct report.

Using those criteria, the team found that employees are happier when their managers have deep expertise in the business. While qualities such as charisma and emotional intelligence are important in a supervisor, "the oft-overlooked quality of having technical expertise also matters enormously," they write.

In fact, among U.S. respondents, having a competent boss was considered more important for job satisfaction than salary, even for jobs where the pay is significantly above average. "The benefit of having a highly competent boss is easily the largest positive influence on a typical worker's level of job satisfaction," the survey authors write. "The bottom line is that employees are happiest when the boss knows what she or he is talking about, and that drives performance."

Research is particularly significant for health care industry

Citing the survey's findings, Stoller, Baker, and Goodall write that the technical authority that a physician-turned-manager brings to his or her supervisory role has an effect both inside and outside the hospital.

"When an outstanding physician heads a major hospital, it signals that they have 'walked the walk,' and thus have earned credibility and insights into the needs of their fellow physicians," the authors contend. In addition, they say, physician-leaders also signal to external stakeholders—such as patients, industry members and potential hires—that they understand both the clinical and administrative side of business. 

According to Toby Cosgrove, CEO of Cleveland Clinic, this "peer-to-peer credibility" is a vital part of physician-led hospitals and health systems. He adds that not only do physician-leaders bring unique insight into hiring other physicians, but they are also more likely to "tolerate crazy ideas" to improve care. In other words, they give employees the space to try out new ideas—and the space to fail.

Moreover, separate research from Goodall finds that a manager with technical expertise may also be more likely to create a productive workplace, establish appropriate goals, and accurately assess the contributions of others. Such expert leadership also shows patients, potential hires, and other external stakeholders how an organization prioritizes its values. 

Still, training can make physicians into better leaders

Yet while "physician-leaders appear to be the most effective leaders precisely because they are physicians," the authors write, technical competence is only one component of being a leader. Leadership takes social skills, and providers must be taught to cultivate those qualities to become both better providers and better leaders.

Health care organizations are increasingly trying to foster leadership skills among providers. For example, at Cleveland Clinic, providers with leadership potential—including nurses and other members of the care team—are invited to participate in an extended offsite training course. Participants spend 10 days learning about leadership, including how to build a cohesive team, handle conflict, and foster emotional intelligence. Within 10 years of the program's launch, 43 percent of physician participants have been promoted to leadership positions within Cleveland Clinic.                                                          

"Having a boss who is an expert in the core business is associated with high levels of employee job satisfaction and low intentions of quitting," Stoller, Baker, and Goodall write, and training physicians for leadership "promises to enhance the pipeline of physician-leaders so that the benefits of physician leadership can be more broadly realized" (Artz et al., Harvard Business Review, 12/29/16; Stoller et al., Harvard Business Review, 12/27/16).

August 22 webconference: Learn how the physician workforce is changing

Health care leaders must be aware of forces influencing their physician workforce if they are to see maximum returns on their significant investments in physicians.

Join this webconference on Wednesday, August 22 at 1 pm ET to learn 10 trends shaping the future of the physician labor force.

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