Southern California Job Market : Challenges / Opportunities : Hospital Managers Feel the Pinch : Administrators discover that the cost spiral is making life difficult. Some get out, but those who can cope get more.
The turnover rate among hospital administrators in Southern California is an astounding 40%. Some of them retire, others just move on to something better. But most of the turnover among these chief executives is involuntary, said Sheldon S. King, president of Cedars-Sinai Medical Center in Los Angeles.
Across the country, hospital administrators are leaving their jobs in record numbers, added Gregory Burfitt, chief executive of AMI Brookwood Medical Center in Birmingham, Ala. “Some of the people who were used to doing things one way for 20 or 30 years just aren’t very comfortable in today’s environment. A lot of people are opting for early retirement,” he said.
These are lean times for America’s hospitals. The people who pay most of the nation’s medical bills--the government and private insurers--are limiting what they are willing to pay for medical care. Hospitals have had to adjust by cutting costs and doing a much better job of managing revenue. Administrators who are skilled business managers will find ample opportunity for advancement and reward. Those who are not are being pushed--gently or otherwise--out the door.
A wave of consolidations in the industry has shrunk the number of available positions, and many hospitals are cutting costs by eliminating mid-level administrative posts, said Gary Kaplan, president of Gary Kaplan & Associates, an executive search and consulting firm in Pasadena.
“Entire layers have been eliminated,” said Jack L. Schlosser, a partner in the Los Angeles office of the Heidrick & Struggles executive search firm. “Some vice presidents and assistants have been eliminated. In some cases, the chief operating officer has been eliminated and those duties now fall to the CEO.”
Despite their assessment of opportunities in hospitals, executive recruiters interviewed recently are not making an argument against pursuing a career in health-care administration. Hospital administrators who have proven that they can operate by the new rules are being offered bigger salaries and perks unheard of in the industry, Schlosser said. “In this climate, there is a recognition of the value of keeping talent where you have it,” he added.
A recent survey--by the William M. Mercer consulting firm--of the nation’s top health-care concerns shows that between 1985 and 1990 the number of hospitals with management bonus and incentive plans jumped to 29% from 16%.
But for budding health-care executives, the jobs are not just in hospitals.
Nearly all of the college programs that traditionally trained hospital administrators have changed the program names to denote a master’s degree in health-care administration, eliminating any reference to hospitals, said Layton Crouch, president of UniHealth America Ventures of Chatsworth and a former public and private hospital administrator. Also, he adds, the traditional hospital administrators’ professional organizations are now calling themselves “associations of health-care professionals.”
“That gives you a clue to what’s going on. The kids who go to those schools are finding jobs in HMOs. You find more program graduates in various administrative positions, like members’ services,” said Crouch.
Crouch said about 25 health-care administration program graduates work for him performing a variety of administrative duties. “That’s more than are in (any one) hospital,” he said. Crouch’s firm, a for-profit unit of the nonprofit UniHealth America system, operates an HMO and home health-care concern, among other medical ventures.
King, who in May, 1989, was recruited from the top job at Stanford University Medical Center to become chief of Cedars-Sinai, said program graduates going to work in hospitals cannot expect the relatively quick and simple route to the top administrative post as was the case in years past. “They may have to settle for a department head,” he said.
He added that he has become “disenchanted” with health-care administration program graduates. “They have very good knowledge of health care, but very few hands-on skills in business,” he said.
King said he has filled many positions with MBA holders who understand the business skills a hospital needs. That strategy assumes “you could teach them about health care. That is the route I urged my daughter to take, and she is now working in a hospital,” he said.
