Now that you are a physician executive, however, what do you think is the probability of being fired during a two-decade career in management? Not so sure? Perhaps we should qualify the term fired.' Substitute whatever fits--downsized,' 'rightsized,' 'contract not renewed,' 'not reelected,' 'forced to retire,' 'asked to resign'--what we're talking about is any time you are required to depart from a management position before you personally intended to do so.
The health care industry's constantly shifting landscape is well known. What hasn't been so clear is what impact this volatility has on the "job mortality" of physician executives. It's not exactly a subject that has been headlined on the front pages of professional literature or featured at national meetings. But stories of such terminations are buzzing at dinners, in the lobbies, over cocktails--everywhere physician executives congregate. It's the dark side we'd rather not acknowledge of the wonderful opportunities in health care management.
The relative risk of being fired?
At the American College of Physician Executives' 25th anniversary meeting in San Antonio on May 20, 2000, I had the honor of closing the conference with a frank look at the epidemiology and implications of "being fired" for our senior physician executives. From our training in public health and preventive medicine we know that "relative risk" is the ratio of the incidence of a given condition in exposed persons to the incidence of the same condition in non-exposed persons. If we consider the condition of interest here to be "job mortality" (i.e. being fired) and the exposure of interest to be a prolonged career in health care management, we could calculate a relative risk for physician executives in the usual fashion (please see Figure 1).
Do we have any reasonable facts about incidence? This past January and February we conducted a survey of 2,037 "senior' ACPE members, asking them about their executive employment history. This was not a randomized clinical trial and there were some weaknesses in our retrospective sampling technique. Our source, for example, was the ACPE database, and our means of identifying "seniority" was by looking at such proxies as length of membership in the College. Still, this was the largest and best study of its kind to date, partly because it is the only one that has explored the phenomenon of physician executive termination in any depth. While the 'evidence' is less than perfect, the data suggest several interesting conclusions.
From our survey population of 2,037 senior physician executives we received responses from 620-- 30 percent. Of those, 47 percent (290 respondents) stated that they had personally "been fired" during their management careers. Some of them had been fired more than once, although the survey limited respondents to describing a single incidence of termination.
My own observations over the past 29 years in health care leadership--25 as an active executive and the last four years as a consultant to boards and senior executives--are not inconsistent with the survey results. On reviewing the files of a highly selected sample of more than 30 talented senior physician executives whom I have personally coached in recent years, I discovered that a very similar proportion, approximately 40 percent, had experienced either outright termination or a major threat of termination during their management careers.
Considering both these sources, it seems quite realistic to estimate that the relative risk of being fired from a management position is somewhere between 20 to 40 times higher than it was during your clinical career. Now that's a substantial risk! Some executives have told me they think even this is an underestimate.
Furthermore, not only does the relative risk appear to be substantial, but our study also suggests that it may be increasing. As you can see in Figure 2, the total number of physician executives being fired has risen steadily over the past 20 years. There are a number of possible explanations. One is that it simply reflects an increasing level of management experience in the sample population. According to our survey data, however, the terminations occur at all levels of management experience (please see Figure 3). If anything, the peak is at four to 10 years. Likewise, the results do not differ greatly between for-profit and not-for-profit organizations, or among local, regional, or national ownership arrangements. Termination risk thus seems to be both increasing and present in a variety of organizational settings.
Managing your risk
When we physicians identify an exposure that increases the risk of disease by a factor of even three or four, we recommend all sorts of treatment, sometimes strong medication and lifestyle changes. If the relative risk of being fired from a health care executive position is 20 to 40 times higher than for clinicians, perhaps it's time for physician executives to consider some better risk management strategies.
This is not, quite, as murky a sea as one might suspect. Based on my own executive career, on insights from coaching senior executives, and from 34 in-depth interviews with our survey respondents, we have a lot of information to go on. The remaining sections of this article suggest strategies to better predict high-risk situations, to prevent termination when appropriate, and to increase the likelihood of your professional and personal well-being when termination becomes inevitable.
Prevention requires prediction
Our survey identified several factors that may be associated with shortened executive tenure. Organizational type is one of those characteristics. Of 15 health care organization types we examined, two-thirds of the 290 terminations occurred in the following kinds of organizations:
* 25 percent in hospitals or health systems with more than 250 beds
* 18 percent in health plans with more than 100,000 lives
* 8 percent in plans under 100,000 lives
* 8 percent in hospitals with fewer than 250 beds
* 7 percent in integrated delivery systems
The top two types represented 43 percent of the total. Group practices, interestingly, despite their prevalence among ACPE members, were way down on the list. In other words, there may indeed be potentially higher-risk organizations.
We also asked about nine different job types, from CEO, COO, dean, and department head to chief medical officer and vice president of medical affairs. Some jobs were associated with very low job morbidity, while fully 36 percent of those terminated had been local level chief medical officers or vice presidents of medical affairs. Another 19 percent functioned as CMO or VPMA at corporate or system levels--thus, over half the terminations involved just these two positions.
Our survey data, supplemented by the 34 interviews, suggest six more factors that are associated with a higher risk of being fired. Each of these characteristics was present in 25 to 35 percent of the 290 terminations.
Being the first person in a new or unclear job, for example, especially if hired from outside the organization (it's easier to let an outsider go), seems to be associated with increased frequency of being fired. So is working for an entity with two or more years of significant financial losses, particularly if a poorly-performing unit is under the physician executive's direct management. Persistent conflict with a boss, board member, or key stakeholder--concerning either personal style or organizational strategy--is another commonly present danger signal.
Additional predictive variables include recent termination or departure of a boss, recent merger, and widespread organizational downsizing or re-engineering. And, of course, if the company forgets to send you a paycheck, you might become suspicious! Because of the retrospective nature of our study we cannot prove any of these factors actually cause firing, only that they are often associated with it.
Using these eight predictive factors, we could consider doing a risk assessment, as we often do in clinical situations. Consider the "risk profile tool" in Figure 4. The more such characteristics apply to your own situation, the higher your likely risk of being fired.
Notice that few of these variables appear to relate directly to the executive's own performance. We asked the 34 in-depth interviewees what, then, might be preventable. Most said that while they probably could not have averted the outcome, they should have recognized it and acted sooner. When your boss is let go, for example, it might be prudent to freshen up your own curriculum vitae.
The first question to ask yourself when such predictive variables are present is whether you still really want this job. That is, should you engage in primary prevention? This is clearly no longer the same wonderful opportunity you took some years ago. Sometimes it's best to just "fire yourself." Consider the following pearls of hindsight, culled from our interviews:
"Maybe I shouldn't have taken that job in the first place."
"I should have left a year earlier when the job changed."
"I don't think he ever really understood the concept of physicians in management."
"There weren't any conflicts. I was just dead right too often!"
If you decide not to fire yourself, but to try to keep the job, then there are three secondary prevention tactics that can help avert an unwanted termination. In epidemiologic terms, recognize that you've been exposed, so try to reduce morbidity.
First, you must clarify and re-clarify today's job expectations. Too many executives are still pursuing the management mandate they received at their hiring, even though changed conditions may have made it obsolete.
Second, drill down on the performance of units that report directly to you. Your own accountability is nowhere more visible than in those operating groups under your personal management. Don't be blinded by peering up at shining goals the organization no longer subscribes to or can afford.
Third, invest in the "politics of retention." Personal effectiveness derives primarily from one-to-one and team relationships with bosses and direct reports. But the politics of retention demand a much wider circle of contacts, especially among those who are not within your own chain of command, contacts with people like influential hoard members, community and medical staff leaders. Retention is more like the initial hiring situation, when you were interviewed by a number of people you rarely saw again, but who are key stakeholders nonetheless.
If you are temperamentally unable or unwilling to do these three things then you are probably chasing a job that is a figment of your imagination. In that case go back to prevention question one: "Do I still really want this job?"
It's the contract, doc
Even if getting fired is unavoidable, there are several important ways you can prevail over the experience. Your contract is a key determinant of your rights in the event of termination. You can't rewrite it now, but you can be sure that your next job contract contains three components in the "termination without cause" section.
1. Significant severance compensation (18 months to three years at full pay)
2. Maintenance of all major benefits during the severance period
3. Continued participation in any executive incentive plan
Health care management is a high-risk job, so a good contract acknowledges this risk and shares it. If you can't get a contract that provides appropriate protection for you and your family, don't take the job.
Even if the axe has already fallen, you can often negotiate a civil "departure agreement" just as you once negotiated an employment agreement. Remember that both you and the company have needs at this time, and that meeting mutual needs is the basis of effective negotiation. The organization certainly doesn't want you dragging their name through the mud. So ask for extended benefits, significant outplacement, retraining, and relocation assistance. Few physician executives appreciate how valuable outplacement services can be, especially for testing and self-assessment. And get references from your about-to-be-ex-colleagues in hand before you depart. They, too, may be on the way out soon, and they'll not be so easy to find later.
If ever there was a reason to network, network, network, this is it. In all high-risk jobs, you must get out of your office! Keep in regular contact with at least three recruiters whom you respect. You've helped them with names for years--now is the chance to travel the other direction on this two-way street. Maintain good relationships with your boss, board members, and colleagues--don't burn bridges--even as you search for your next position. The job you land is more likely to be a function of the length and quality of your relationships than the length and quality of your CV.
Finally, keep a wide open horizon for new opportunities. Although you have probably emerged from a fairly narrow career track--clinical practice to health care executive suite--there is a much broader field open before you now. Your next job is not going to look like the previous one; also, your kids are older and you are much more mobile. Don't rule out the wonderful new challenges in technology, industry, the international sector, and entrepreneurship.
This brings us to some closing advice after learning that you've been fired. Take a deep breath! This is a time for deliberate self-reflection. Enjoy those outplacement benefits. Take that trip. Sit down at that rusty old piano. Especially make room to enjoy your family and friends, maybe even the kids you never got to know very well. And take it easy on yourself, too--don't indulge in self-recrimination. This is a known risk of our profession.
My interviews show that many physician executives credit the period right after they were fired as among the very best times in their lives. Let go of the past. Take advantage of this incredible opportunity and make plans for the next fulfilling chapter in your personal and professional life.
Figure 2 An increasing risk? Number of Physician Executives Fired 1983-85 3 1985-91 24 1991-95 73 1996-2000 194 Note: Table made from bar graph Figure 3 At all levels of experience? Years of Management Experience % of Terminations <1 1 1 - 3 17 2 - 6 26 7 - 10 24 11 - 15 * 16 - 20 * >20 6 * Unreadable in original source Note: Table made from bar graph
RELATED ARTICLE: A Risk Profile Tool
* Job type e.g. CMO
* Organization type., e.g. Hospital>250 beds
* First hire join a new position
* Organizational financial losses > 2 years
* Significant conflict with boss/board
* Recent departure of boss
* Recent merger/consolidation
* Widespread organizational downsizing
Bridges, William. Transitions: Making Sense of Life's Changes, Reading, Massachusetts: Addison-Wesley, 1980.
Schachter-Shalomi, Zalman and Ronald S. Miller. From Aging to Sage-ing, New York, New York: Warner Books, Inc., 1997.
Metcalf, Franz. What Would Buddha Do? New York, New York: Ulysses Press, 1999.
Keyes, Ralph (ed). The Wit and Wisdom of Harry Truman. New York, New York: Gramercy Press, 1999.
Levinson, Daniel. The Season's of a Man's Lift. New York, New York: Ballantine Books, 1986.
Howard L Kirz, MD. MBA
DR. Joe... you'Re FiRed!
The Curious Case of Joseph Goodheart, MD, FACPE
Joe and Becky Goodheart had lived in Midvale since right after Joe's residency and endocrine fellowship. It was a great town for raising their twins, with good schools, nice tree-lined streets, and was only 45 minutes from a major metropolitan center. After six successful years in a group practice of 20 internists, Joe was elected to two terms as Chief of Staff for Midvale Community Hospital (MCH). His increasing skills and interest in management led him to three years as MCH's half-time Medical Director and then to his role as full-time VPMA. In both positions Joe focused successfully on improving relationships with the voluntary medical staff and developing new hospital programs.
In his first interview with the Bracken Health System (BHS) folks Joe was tentative. His in-laws had moved to Bracken three years ago and it seemed that he had the right skills and experience for the job. But although he'd been on the Board of his group practice for five years and had created several financially successful programs at MCH, he wasn't sure he was ready for "bottom line" responsibility for the larger BHS programs.
The registered letter from CEO Bill Healy offering Joe the job as BHS's first CMO arrived. It described the base pay ($275,000), annual bonus (up to 30 percent based on organizational and individual targets), and a relocation stipend (up to $25,000 against actual receipts), and even included a brochure on BHS's standard executive benefits (auto allowance, club dues, CME, severance, 401(k), and insurance). Attached to the letter was a draft job description that Joe had seen during his interview process. Below Bill Healy's signature was scrawled "Welcome to the BHS team, Joe!" After discussions with Becky and his accountant and a few minor modifications, Joe signed the letter and began planning his final months at MCH.
Joseph R. Goodheart, MD, FACPE CMO, Bracken Health System
During his transition from MCH to Bracken, Joe was careful to begin developing the relationships he knew would be needed to be successful. While Becky house-hunted and got the kids enrolled in summer activities, Joe scheduled "get-to-know-you" breakfasts with his new colleagues on the senior management team and active members of the medical staff. Everyone was cordial and enthusiastic. Many spoke of their hopes for "improved medical staff relations" or "increased physician input" and several people openly appreciated Joe's friendly style and "much-needed physician leadership skills."
His first year served to validate Joe Goodheart's decision. It turned out to be a good job. He hired Sam Greene, MD, MPH, as his first Associate CMO, putting Sam in charge of the quality, utilization, and risk management areas. Joe concentrated on his new role on the senior management team, medical staff relationships at the three Bracken hospitals (which had merged the previous year), helping Bracken's wholly-owned primary care group (43 physicians), and opportunities to build several "centers of excellence." Bill Healy regularly expressed his satisfaction with his work, occasionally confiding that he expected a physician executive like Joe would some day succeed him.
At the end of Joe's first year, one small cloud appeared in an otherwise cloudiess sky--Bracken's system-wide financial performance. The consolidated financials showed a year-end loss of about $5 million, less than 1 percent of overall revenues. While Bill Healy deftly described it to the Board as part of the "inevitable costs of merger in a resource-limited environment," the atmosphere of the senior management team began to change.
In his second year, cost-cutting became the order of the day. A break-even budget was devised with the expectation that a positive margin of at least 3 percent would be restored no later than the subsequent year. The Bracken Primary Care Group, which had lost $75,000 per doctor during Joe's first year, came under increasing scrutiny. Joe, of course, had nothing to do with the creation of the group, but as CMO he was tasked to figure out how to improve its performance.
Some of the initiatives Joe and COO Nancy Richards had begun for centers of excellence became casualties of cost-cutting. The Joint Replacement Center didn't seem doable in the face of a more limited debt capacity. The new Cardiovascular Lab, clearly a moneymaker in the long run, was nevertheless back-burnered to accommodate more urgently needed upgrades in General Surgery and ER. Joe found himself spending more time in his office looking for expense reductions and explaining the slow-downs to disgruntled members of the medical staff. Bill continued to be supportive of his CMO. Together they often pointed out that the primary care group, while losing money on a P & L basis, contributed significantly through its admissions, specialty referrals, and ancillaries. Joe worked to reduce the losses, but even with a new compensation system and billing agency, the group continued to struggle financially. By year's end several of the key physicians had left for greener pastures, blaming "mismanagement" and taking a num ber of their patients with them.
As his second year drew to a close, Joe had an uneasy feeling. His boss continued to be a strong supporter. The medical staff, however, seemed a little more distant. Other members of the senior management team, while cordial in both public and private, seemed less effective as a team and individually more distressed. The CFO accepted a new position in his hometown and it was rumored that Nancy was being considered for the CEO position at a nearby hospital. Joe wasn't sure what it all meant, but being CMO certainly wasn't quite as much fun as it had been.
How could they do this?
Year-end financials had only been out a week when Bill Healy called Joe into his office. "I want you to hear this directly from me. I've been asked to leave. The Board met last night, reviewed our year-end performance and decided they want to switch horses. Despite all the hard work you and the others have put in this year, a $17 million loss following on the heels of last year's red ink just isn't acceptable."
That night Joe found himself at a complete loss. "How could they do this, Becky? Bill's as good as any CEO I've ever met. He's not responsible for the BBA mess, the managed care environment, or the explosion of medical technology. How can they fire him when we're working so hard and we're such a good team?"
The interim CEO, announced Friday morning, was John DeVoir, an ex-hospital CEO and consultant, well-known to the Board who'd worked on several re-engineering and governance projects at Bracken over the past two years. On Monday DeVoir arrived at 7 am. By noon he'd scheduled meetings with each of Bracken's senior managers. Joe's meeting was at 4 pm.
"Hello Dr. Goodheart, nice to see you again. I guess you know the Board's appointed me interim CEO for the next six months. They've given me some narrow marching orders: 'Get us back on track!' I'm asking each of the senior managers to prepare a plan over the next two weeks to get our budget balanced within their respective areas. While you're working on this I'm going to do some checking on our team, gathering opinions and getting a sense of what we've got to work with."
Two weeks later Joe found himself in DeVoir's office, explaining what he thought was financially possible in the group, in downsizing the quality and utilization departments, and finding more savings for the hospital departments. In truth he was not able to easily find the savings DeVoir had requested and his group budget was mostly a speculation.
After listening politely for about 20 minutes, DeVoir spoke up." Joe, that all sounds okay, but I've got another concern. It seems that you were effective as a CMO here in a relatively peaceful environment, but this past year you might have been a fish out of water. The primary care group's performance is, at best, only slightly better than last year, and you're telling me that it might not be much better next year. The cardiologists I've talked to are in a snit about the CV Lab. Our orthopods are talking about doing the joint center on their own and members of our medical staff tell me you've spent a lot of time in your office this year rather than communicating with them.
"To be honest with you Joe, I'm not sure that you're the right guy for the job right now I've only got a limited amount of time to do my own job and I need the best possible team. I think the best thing for both of us might be if we simply ended your tenure here in the best possible way."
Joe: "You mean... you're firing me?"
--Howard L. Kirz, MD, MBA
Howard L. Kirz, MD, MBA, is an 'active" retiree and past president of the American College of Physician Executives. A Principal of The Clearwater Group, when not fishing or biking, he specializes in physician board and leadership development and the personal coaching of senior health care executives. He can be reached by calling 206/624-5757 or via email at firstname.lastname@example.org.
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|Author:||Kirz, Howard L.|
|Date:||Jul 1, 2000|
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