A Day in the Life of a Hospital CEO – An Interview with Dr. David Pate
“[Volunteering as an orderly] taught me much about the operations of a hospital, the roles of different personnel, how to be humble, physician-nurse relationships, empathy for patients, the dedication of healthcare professionals, and how much ‘little things’ mean to employees.”
Dr. David Pate, CEO of the St. Luke’s Health System, Idaho
According to the American Hospital Association, some 6,000 hospital CEOs collectively oversee almost a million beds, more than 36 million hospital admissions, and over a trillion dollars in expenses. While those CEOs have their days shaped by the scope and scale of the hospitals they work for, each of them is responsible for maintaining the overall health and effectiveness of those facilities.
As guardians of some of the world’s key pieces of infrastructure, hospital CEOs have a tremendous impact on the lives of their constituents. Being the chief executive officer of a hospital means being part business leader and part politician, requiring a blend of diplomacy, advocacy, business management, and financial sense. And the stakes of this role aren’t just profit and loss, but life and death.
Hospital CEOs have a wide range of responsibilities; their work environment and day-to-day lives can vary immensely. In addition to requiring competence as both a business leader and a healthcare executive, hospital CEOs are increasingly being called upon to transition and modernize. Data analytics and the integration of AI are providing new, complex ways to deliver top-quality care. And the industry-wide transition from a fee-for-service model to a value-based service model—one focusing on the quality of services instead of the number of services provided—means hospitals have to rethink their financial operations from the ground up.
According to Dr. David Pate, former CEO of St. Luke’s Episcopal Hospital in Texas and current CEO of St. Luke’s Health System in Idaho, the biggest challenge facing today’s hospital CEOs is this transition from fee-for-service to value-based payments and the declining revenues that go along with it. He sees the continued decline in hospital revenues as a function of the outsourcing of higher-revenue services to lower-revenue outpatient settings; the increase in competition between ambulatory providers; and the shift from high-revenue insurance plans to lower-revenue Medicare plans as the population ages. Today’s hospital CEOs must navigate the impacts of this continued decline in revenue while handling the pressure of growing wages, supply costs, and pharmaceutical costs.
“For those organizations, like ours, that are making a significant transition in our business from fee-for-service to at-risk value-based arrangements, hospital CEOs will be challenged with the change in the philosophy of hospitals previously being profit centers to now being cost centers,” Dr. Pate explains. “This changes the focus away from filling beds to now looking at every admission to learn how the system failed the patient and hospitalization became necessary.”
To run a hospital is to run an intensely complex business, but one where the bottom line is not solely profit, and one where the stakes have a human face. Read on to get a look at a day in the life of a hospital CEO.
Work Environment of a Hospital CEO
Hospital CEOs are frequently on the move, with their schedules often planned down to the minute. Community outreach, investment research, board meetings, and public speaking engagements are all part of the CEO’s jurisdiction and stretch outside the walls of the hospital. And their work reaches into the digital space, too; Dr. Pate, for example, is active on Twitter, and he also maintains a blog, where he analyses key trends and issues in the healthcare space.
Back in the hospital, CEOs interact with patients, providers, staff, and family members. But their core clinical team is a small cadre of fellow executives, which includes a chief operating officer (COO), a chief financial officer (CFO), a chief nursing officer (CNO), and a chief medical officer (CMO). This team enacts strategy proposals determined by the CEO, and reports back up on their impact or need for adjustment. Drawing from this team, a hospital CEO reports to and serves a governing board of directors, which ensures the CEO is managing the hospital effectively.
For students aspiring to become a hospital CEO, Dr. Pate prescribes a stint volunteering at a local hospital.
“I served as a volunteer orderly and then was given a paying job as a unit secretary in an intensive care unit at a busy trauma teaching hospital,” he says. “These experiences taught me much about the operations of a hospital, the roles of different personnel, how to be humble, physician-nurse relationships, empathy for patients, the dedication of healthcare professionals, and how much ‘little things’ mean to employees. Even today, some forty years later, I think about how the decisions I am making will affect those volunteers and professionals I used to work with.”
Daily Responsibilities of a Hospital CEO
A hospital CEO can be seen as the mayor of a major medical facility, responsible for the thousands of constituents that they serve—patients, providers, staff, and community members—in addition to safeguarding the functionality of the facility’s financial and logistical apparatus. No two days are going to be precisely alike, but here are four broad themes in a hospital CEO’s responsibilities.
Development of Hospital Policy
A key responsibility of a hospital CEO is the development and maintenance of hospital policy. A sound strategic policy is critical in the areas of patient safety and compliance. By interfacing with the executive team and getting input from the community, a hospital CEO must determine a strategic and rational direction that strikes a balance between serving the patient, maintaining compliance with federal regulations and privacy concerns, and ensuring the overall financial health and stability of the hospital. From the minute and technical to the grand and overarching, setting policies and enforcing them is a top priority for a hospital CEO.
One of the most critical responsibilities of a hospital CEO is maintaining the financial health of the hospital. Sound financial planning can have life-saving impacts on patient safety and care quality.
A hospital CEO must have a solid relationship with the CFO and a deep understanding of business management practices in order to keep a hospital in the black and operating at peak efficiency. A complex and clever distribution of resources is required to not only meet the needs of providers and patients but also to fund critical investments into medical research. And the transition from fee-for-service to value-based payments means that hospital CEOs must be capable of completely rethinking a business while also holding on to the solid fundamentals that keep a hospital functioning and fulfilling its mission.
Leadership Training & Recruitment
A hospital CEO is the ultimate authority in staffing decisions at a hospital. They play a key part in the recruitment of senior management and executives and also foster an environment where top talent wants to come and work.
A close coordination with department heads is critical in determining the precise staffing needs of each particular silo within the hospital and then filling those roles with the most qualified people possible. Above all, a hospital CEO must strike a balance between the organization’s macro-level staffing needs and the individual staff’s micro-level needs.
A hospital CEO is the hospital’s ambassador to the outside world and between departments. They serve as a critical link between the hospital’s executive team and its board of directors, balancing one’s technical knowledge against the other’s objective governance. They also connect a hospital’s services to the broader community by promoting a culture of health and transparent accessibility.
They advocate for the hospital and its constituents in the media as well as at the local, state, and federal levels. They draw in outside partnerships with research, funding, and service implications. And, within the hospital, they can build consensus between departments, brokering internal policy adjustments that meet the needs of each concerned party and smooth the interactions between them.
Required Skills & Knowledge of a Hospital CEO
Hospitals are always open, and, similarly, hospital CEOs have to be either working or on call at all times. And while the job demands expert-level skills and knowledge in the areas of communication, finance, and management, there’s a required level of near-fanatical dedication that a hospital CEO needs to be able to perform their daily tasks without burning out.
A bachelor’s degree is required, but the area of focus isn’t particularly important. Many hospital CEOs majored in finance or business as an undergraduate, but others have varied backgrounds that include bachelor’s degrees in English or a medical field.
Dr. Pate, for example, got his bachelor’s in biochemistry while also playing in Rice University’s Marching Owl Band. The key takeaway from undergraduate programs for future hospital CEOs is a breadth of knowledge, an ability to communicate clearly and effectively, and a network of motivated peers and mentors with whom they can consult and exchange ideas.
Graduate-level education is where the real work begins. Through an MHA, MPH, or MBA with a healthcare focus, future hospital CEOs can get a first-class education in the inner workings of healthcare and business. It’s here that they develop the keen business fundamentals, financial understanding, and communication skills necessary to run a large and dynamic organization such as a hospital.
Furthermore, graduate-level education provides the opportunity for future hospital CEOs to get familiar with big data analytics and the emerging role it’s playing in hospital leadership and also gives students a broad view of the trends (e.g., transition from fee-for-service to value-based payments) that are changing the industry’s landscape. The network one builds in a master’s program will be critical in securing mentorships and job opportunities that lead them up the ladder.
Dr. Pate, for example, got an MD in internal medicine and a JD in health law, practicing as a general internist and then an adjunct professor of law before becoming a hospital CEO. (He’s also a Fellow of the American College of Healthcare Executives, which you can read more about below).
While there are exceptions, over a decade of leadership experience is seen as the minimum requirement for a hospital CEO. This is in part due to the lessons one learns and skills one develops through real-world experience, but also in part due to the wide network one needs to be considered in the conversation for a CEO hiring. Getting hired as a CEO requires not only a sterling resume and educational background but also clever navigation of key relationships and a careful blend of advocacy and diplomacy.
Each hospital has its own set of required skills and knowledge, unique unto itself. For Dr. Pate, there was a notable shift when he went from the CEO of a single hospital to the CEO of a health system that included several hospitals.
“From my experience as a CEO of a large teaching hospital, I already had skills involving operations, financial management, board management, physician relations, and human resources,” Dr. Pate says. “The skills needed for my new job as a health system CEO require strategic planning and driving standardization across a system of hospitals, including the reduction of irrational care variation.”
In all of the aspects of a hospital CEO’s work, the hours are long and the stakes are high, but the rewards do exist. For Dr. Pate, two things stand out:
One is that I love the people I work with and enjoy solving problems with them and knowing what is going on in their lives. The other is the opportunities that I have to get out and talk to employees at our hospitals and clinics. We have amazing people doing amazing things and it always takes me back, no matter how difficult and consuming some of the challenges I may be dealing with, to the fact that we are making a big difference in people’s lives and helping them through significant life events.
Certification & Licensure for a Hospital CEO
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Hospital CEOs do not need specific certification or licensure in order to practice. But doing so can act as a mark of distinction on one’s record, and demonstrate both expertise and an ongoing commitment to the profession. Furthermore, joining a professional society can help build the critical network one needs to both become a hospital CEO and lead effectively from that position.
The American College of Healthcare Executives (ACHE), for example, allows applicants to be credentialed as a Fellow of the American College of Healthcare Executives (FACHE). This process takes a multifaceted look at an applicant’s educational, professional, and civic experience, and culminates in a Board of Governors Examination. In order to be eligible for that examination, applicants must have:
- A current position as a healthcare executive
- Current membership of at least one year with the ACHE
- At least five years of work experience
- A relevant master’s degree
- Two examples of civic or community volunteer activities in the last three years
- Two examples of healthcare-related volunteer activities in the last three years
- At least 36 hours of continuing education (12 of which must have been completed in-person through the ACHE) in the last three years
- Two professional references: one of whom must be a current FACHE who will perform a structured interview with the prospective fellow, and one of whom should be a senior executive (VP or higher) at the prospective fellow’s organization
The Board of Governors Examination consists of 230 questions, of which 200 are scored. Source material for the test includes healthcare journals, periodicals, and textbooks. A reference manual for the exam is provided by the ACHE, and a 12-week online tutorial is offered for $495. The ACHE website also includes study tips from fellows who have passed the exam. The ACHE recommends between three and six months of study time before taking the exam, depending upon the applicant’s experience and education level.
Upon certification as a FACHE, one will need to recertify every three years. As part of maintaining their status, fellows must complete 36 hours of continuing education, 12 of which must be in-person through the ACHE. Alternatively, one may choose to retake the Board of Governors Examination. As part of the three-year recertification, fellows must show involvement in at least two civic or community activities and two healthcare-related activities.