By Philip L. Glick
On Jan. 29, 2020, The Buffalo News’ headline read, “After six years as Kaleida CEO, Lomeo stepping down at year-end.” Jody Lomeo has done a great job. He led a $1.3 billion-a-year, red-ink organization financially into the black, opened a new state of the art children’s hospital, built partnerships in all eight counties of Western New York, strategically shifted Kaleida Health from an inpatient to outpatient care, and closed underperforming units. Kudos all around!
But, as Lomeo stated himself, “Health care is a really difficult business … and it’s not going to get any easier.” Correct – the next CEO’s job will have even greater challenges.
There are existential challenges that will threaten the future of Kaleida as we know it. These will include decreases in: third-party payer reimbursement, New York State-subsidized Medicaid, federally funded Medicaid, Disproportionate Share Hospital funding, and reimbursement to Western New York hospitals.
Kaleida Health is said to be hiring an executive search firm to find the next president and CEO. “A handful of internal candidates, as well as local and national contenders,” will be considered, said Frank Curci, Kaleida’s board chairman. Should these candidates be physicians or nonphysicians?
A century ago, most hospitals were physician-led, but that isn’t the case now. Currently, only 5% of U.S. hospitals are led by chief executives with medical training. What do the health care leadership experts say about this? Multiple studies show that physician-led health care organizations outperform those run by nonphysicians by many important metrics. A 2011 study found overall quality and outcomes scores were 25% higher when physicians, not lay business leaders, were in charge. Even more specifically, for cancer care organizations, the data showed 33% higher scores for physician-led organizations.
Experts suggest that physicians take an oath to provide the best possible care to their patients, know how to make tough decisions, medical training incorporates process improvement into the differential diagnosis pedagogy. Also, physicians are lifelong learners, have worked their way up the health care delivery chain, know how to advocate for their patients and understand that patients’ well-being always needs to be considered when financial imperatives are considered.
These professional qualities make for a good doctor, but obviously leadership skills, financial expertise, regulatory savvy and being strategic, among other qualities, are also essential. The next chief executive of Kaleida health should be a doctor.
Philip L. Glick, MD, is a pediatric surgeon and professor of surgery at the Jacobs School of Medicine and Biomedical Science and professor in UB’s School of Management.