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Clinical leadership and strategic decision-making: what difference does it make?

Here we consider the growing body of evidence to suggest that greater involvement of clinicians in the senior management and leadership positions of hospitals (and other health organisations) can have a significant impact.

As we have seen, it is frequently assumed that clinicians in leadership roles can make a difference. Falcone and Satiani (2008) - note that ‘in a healthcare system that is complex, troubled, and challenging, the doctor CEOs and board directors brings a unique set of skills to the business of medicine’. Clinical leaders have a greater understanding of the core business of healthcare and greater legitimacy in the eyes of their rank and file professional colleagues. All this may ensure that they make policy and practice decisions that are both more informed and likely to be implemented and adopted.

The bulk of the research supporting these conclusions has been conducted since 1993, mainly looking at privately owned hospitals in the United States. Most studies are quantitative using surveys or other routine or administrative date. They aim is to evaluate the relationship between different kinds of experience and human capital (clinical or non-clinical) of CEOs or board members (explanatory variable) on a variety of performance outcomes, such as process improvements in efficiency or improved clinical care (dependent variable).

The earliest strand of research on this topic looked mainly at the impact of clinical leadership on financial outcomes of hospitals, for example, the size of operating margins or efficiency rates (bed occupancy rate). Goes and Zhan (1995) for example, show that greater doctor involvement in the governance of US private acute care hospitals leads to higher bed occupancy and operating margins. Similar conclusions are reported by Molinari et al. (1993), who highlight how greater medical staff representation on the board of directors is significantly associated with improved hospital profitability. Also focusing on US healthcare, Prybil (2006) finds that non-profit general hospitals outperform the private sector counterparts in terms of overall profitability when doctors are more involved in governance roles. Similar results have been reported by European studies. Looking at the English NHS, for example, Veronesi et al. (2014) highlight a positive impact of clinical participation on boards of directors of acute care hospital trusts on the financial management ratings received from the Healthcare Commission.

A further strand of research has investigated the relationship between clinical leadership on the quality of care provided by hospitals. In the US Prybil (2006) analysed a sample of 14 non-profit general hospitals and found that the best performers, in terms of quality of care ratings and a patient satisfaction scores, had more doctors in their top management teams. Similarly, Bai and Krishnan (2014) report that non-profit hospitals without doctor participation on their boards are more likely to deliver lower quality of care. Focusing only on hospital board quality committees, Jiang et al. (2009) also show that having a higher doctor participation on committees strongly improves hospital performance in terms of the care process (measured as quality of care of heart attack, heart failure, pneumonia, and surgical infection prevention) and mortality rates.

More recently, these conclusions have been confirmed by Goodall (2011). Focusing on the top 100 US hospitals according to the Index of Hospital Quality ranking of the US News and World Report, she finds that having a CEO with a medical background generates greater quality improvements that result in a higher quality ranking for the hospital. In the European context, Veronesi et al. (2013) report that a greater ratio of clinical members on governing boards of English hospital trusts generates better ratings of the quality of the service provided, as well as being associated with a reduction in morbidity rates. In a later study, the same authors show that the involvement of clinicians on the board of directors improves the overall patient experience of the care provided by acute hospitals when clinical managers operate in hospitals that have greater autonomy (Foundation Trusts) (Veronesi et al. 2015). Finally, focusing on a sample of German hospitals, Kuntz and Scholtes (2013) note a positive relationship between a full-time or heavily involved part-time medical director and higher staff-to-patient ratios (associated with safer patient care).

Several explanations are offered to explain these results. It has been suggested, for example, that clinical involvement management could help to strengthen a culture of stewardship and facilitate the ‘adoption of more cost efficient clinical practices’ (Succi and Alexander, 1999). Ford-Eichkoff et al. (2011) argue that increasing the number of board members with clinical background provides governing boards with a greater breadth of expertise. This chimes with other studies which highlight the greater credibility of clinical leaders and the development of more ‘quality-centred cultures’ (Shortell et al., 2005).

Despite these conclusions, not all research is equally positive about the impact of clinical leaders. Some studies find no significant relationship between clinical CEOs and organisational performance (Veronesi et al., 2013), while others highlight the potentially negative impact of clinical involvement on efficiency. Succi and Alexander (1999) note how the increasing influence of doctors in the allocation of resources is associated with certain moral hazards and the risk that hospital service priorities are shaped or captured by the interest of powerful medical groups (interested only in promoting their own specialism). This is also hinted at in a study by Brickley et al. (2010) suggesting that in private hospitals external donors are less willing to commit resources to hospitals where doctors play are more involved in strategic decision making. This is due to fears that resources donated to these hospitals will be expropriated to support clinical projects rather than benefiting the wider community (Glaeser, 2007). In a similar way, in the English NHS, Mannion et al. (2005) find that in hospitals dominated by ‘pro-professional cultures’, strategic and operational decisions may be skewed towards meeting clinical needs at the expense of financial performance targets.

In addition to these risks are challenges associated with recruiting, training and developing and clinical leaders. According to Kippist and Fitzgerald (2009), one of the main ‘barriers to the effectiveness of the role of hybrid clinician manager’ is ‘the lack of management education and skill’. Similarly, Falcone and Satiani (2008) state that a ‘successful physician leader must understand the business of medicine as well as or better than he or she understands the practice of medicine’. But while the risks and challenges of developing clinical leadership are significant (especially where doctors are concerned) we should not ignore the very substantial (and growing) evidence base to support the assumption that clinical leadership do often make a difference. Acknowledging this fact and acting on it may be critical for realising the objectives of healthcare improvement.

Talking point

  • What are your thoughts on the emerging ‘evidence base’ to support the argument that clinical leaders can improve healthcare outcomes?
  • Reflecting on your own experiences (or healthcare organisations you are aware of), is clinical leadership always a good thing?

References

Bai, G. & Krishnan, R. (2014) Do Hospitals Without Physicians on the Board Deliver Lower Quality of Care? American Journal of Medical Quality, 30 (1): 58-65.

Brickley, J.A., van Horn, R.L. & Wedig, G.J. (2010) Board composition and nonprofit conduct: Evidence from hospitals. Journal of Economic Behaviour and Organisation, 76 (2): 196-208.

Falcone, R.E. & Satiani, B. (2008) Physician as hospital chief executive officer. Vasc Endovascular Surgery, 42 (1): 88-94.

Ford-Eickhoff, K., Plowman, D.A. & McDaniel, R.R. (2011) Hospital boards and hospital strategic focus: the impact of board involvement in strategic decision making. Health Care Management Review, 36 (2): 145-154.

Glaeser, E.L. (2007) The Governance of Not-for-Profit Organizations. University of Chicago Press.

Goes, J. & Zhan, C. (1995) The effects of hospital-physician integration strategies on hospital financial performance. Health Services Research, 30 (4): 507-530.

Goodall, A. (2011) Physician-leaders and hospital performance: is there an association? Social Science and Medicine, 73 (4): 535-539.

Jiang, H.J., Lockee, C., Bass, K. & Fraser, I. (2009) Board oversight of quality: any differences in process of care and mortality? Journal of Healthcare Management, 54 (1): 15-30.

Kippist, L. & Fitzgerald, A. (2009) Organisational professional conflict and hybrid clinician managers: The effects of dual roles in Australian health care organisations. Journal of Health Organisation and Management, 23: 642-655.

Kuntz, L. & Scholtes, S. (2013) Physicians in leadership: The association between medical director involvement and staff-to-patient ratios. Health Care Management Science, 16 (2): 129-138.

Mannion, R., Davies, H.T.O. & Marshall, M.N. (2005) Cultural characteristics of “high” and “low” performing hospitals. Journal of Health Organisation and Management, 19 (6): 431-439.

Molinari, C., Morlock, L., Alexander, J. & Lyles, C.A. (1993) Hospital board effectiveness: relationships between governing board composition and hospital financial viability. Health Services Research, 28 (3): 358-377.

Prybil, L.D. (2006) Size, composition, and culture of high-performing hospital boards. American Journal of Medicine Quarterly, 21 (4): 224-229.

Shortell, S.M., Schmittdiel, J., Wang, M.C., Li, R., Gillies, R.R., Casalino, L.P., Bodenheimer, T. and Rundall, T.G. (2005) An empirical assessment of high-performing medical groups: results from a national study. Medical Care Research Review, 62 (4): 407–434.

Succi, M.J. & Alexander, J. (1999) Physician involvement in management and governance: the moderating effects of staff structure and composition. Health Care Management Review, 24 (1): 33-44.

Veronesi, G., Kirkpatrick, I. & Vallascas, F. (2013) Clinicians on the board: What difference does it make? Social Science and Medicine, 77: 147-155.

Veronesi, G., Kirkpatrick, I. & Vallascas, F. (2014) Does clinical management improve efficiency? Evidence from the English NHS. Public Money and Management, 34 (1): 35-42

Veronesi, G., Kirkpatrick, I. & Altanlar, A. (2015) Clinical leadership and the changing governance of public hospitals: Implications for patient experience. Public Administration, 93, (4): 1031-1048.

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