40  Pursuing Excellence in Healthcare 24. Epstein, A. L., and Bard, M. A. 2008. Selecting physician leaders for clinical service lines: Critical success factors. Academic Medicine 83 (3): 226–234. 25. Larson, E., and Gobeli, D. 1987. Matrix management: Contradictions and insights. California Management Review 29:126–138. 26. Crist, T. B., LaRusso, N. F., Meyers, F. J., Clayton, C. P., and Ibrahim, T. 2003. Centers, institutes, and the future of clinical departments: Part II. American Journal of Medicine 115 (9): 745–747. 27. Longshore, G. F. 1998. Service-line management/bottom-line management. Journal of Health Care Finance 24 (4): 72–79. 41 3Chapter Leadership in the Academic Medical Center I recommend that the organization of the Hospital shall be on the Military or Railroad plan, i.e., that it shall have one head, and only one, who shall receive his directions from, and be responsible directly to the Board of Trustees, and that all orders and instructions which the Board may make relative to the discipline and internal manage- ment of the Hospital shall be issued through him. is Officer should be a competent medical man, and a man of executive ability. John Shaw Billings Planner of e Johns Hopkins Hospital, 1875 [1] Introduction Although the AMC at the turn of the century might have been amenable to a leadership structure similar to that of the military or the railroad, as described by Dr. Billings, the complexity found in today’s AMC makes it unlikely that lead- ership strategies can be defined in such a straightforward model. Unfortunately, few objective assessments have been made of the value of different leadership structures in the AMC. is is in marked contrast to the wealth of data avail- able on leadership strategies in the world of business. For example, Amazon.com lists over 53,000 titles related to “business” leadership, but only 33 titles related 42  Pursuing Excellence in Healthcare to leadership in academic medical centers—half of which are not specifically related to the search term. As AMCs face increasing economic challenges and begin to integrate their various entities, the development of an effective leadership structure becomes increasingly important. Indeed, integration and restructuring cannot effectively be undertaken without a significant change in the leadership structure. In this chapter, we will look at recent data confirming that the current leadership struc- ture needs to be revised, discuss the organizational impediments to effective leadership that are found at many AMCs, describe a model that can improve the role of leaders in today’s AMCs, and present recommendations on how to transition from our current structure to a new leadership paradigm. is new leadership structure strengthens the ability of the AMC to focus on the core mission of providing outstanding patient care. AMC Leaders Face Formidable Challenges Although business scholars have not carefully studied the leadership structures of the AMC, substantive information supports the notion that current leadership structures are not effective. For example, the average tenure of a dean of a U.S. medical school—the individual generally presumed to be the senior academic official at an AMC—is less than 4 years, which is 1 year less than the median tenure of CEOs of Fortune 500 companies [2]. Arthur Rubenstein, dean of the University of Pennsylvania School of Medicine and executive vice president for the health system, attributed the relatively short tenure of medical school deans to “a combination of dean burnout because of the intensity and time requirements of the job as well as the challenges associated with maintaining the favor of a broad range of constituents—including faculty, students, donors and the university leadership—in a challenging environment and with limited resources” [2]. Claire Pomeroy, vice chancellor for human health services at the University of California, Davis, and dean of the university’s School of Medicine similarly noted [2]: Being a dean is challenging. First, you have to balance these really diverse missions—academics, research and a complex clinical deliv- ery system—which takes a wide spectrum of skills. We’re all more expert in one of those areas than in others, and it’s very hard to find the person who is comfortable talking with the HMO providers as meeting one-on-one with first-year medical students. ere’s a lot of culture clash that goes on and it’s really hard to satisfy all those constituencies for a long period of time. Secondly, one of the main Leadership in the Academic Medical Center  43 jobs of being dean is getting people the resources they need in those diverse missions, and recently they have been inadequate resources. You’re constantly battling to get the resources that your organization needs to be successful and you don’t meet everybody’s needs. A recent survey by the Council of Deans of the Association of American Medical Colleges provides additional insights into the challenges facing AMC leaders [3]. A majority of respondents noted that the role of dean was impacted most by the decline in the resources available to medical schools following an era of abundance, the increased competition that AMCs faced in the clinical arena, and a reliance on clinical revenues to support medical education. One dean noted that this change resulted in a shift from “being what I’d call more of an academic deanship to more of what I’d call a marketplace CEO” [3]. e majority of respondents also noted that a major impediment to surviving both as a dean and as a medical school in the new healthcare environment was the failure of the AMC environment to align the dean’s responsibilities with the authority to manage. e respondents noted three factors that could be assessed to evaluate the dean’s potential for leading the institution in a time of change [3]: 1. Does the dean have adequate support from higher management to serve as a change agent? 2. Does the dean have sufficient authority over the clinical enterprise? 3. Does the dean have enough internal leverage to pursue the school’s mis- sion effectively? Institutional stability was also seen as an important component of a success- ful tenure as a dean. Two-thirds of the respondents noted that, to be effective, a dean needed support from above as well as stability in senior leadership in both the university and the hospital. Indeed, four of eleven former deans had resigned their positions due to institutional instability. Additional obstacles to success were a “failure of will on the part of the institution to endorse the dean in ini- tiating change” and university leaders who “distance themselves from the dean, who, in turn, becomes expendable” [3]. As one former dean noted [3]: ere’s got to be a clear understanding between whoever is doing the hiring and the candidate as to what the university or the institution wants accomplished, and ideally, there is an understanding that the resources and political support that will be necessary to achieve those objectives will be forthcoming, if not forever, for three years, for five years, whatever the time frame may be to accomplish the changes. 44  Pursuing Excellence in Healthcare A major cause of the early departure of deans has been the intense conflicts that arise between the academic and clinical missions at many AMCs. One dean summed it up best when he said [3]: If I am in charge of both the hospital and the medical school, I don’t have to arbitrate[;] I just say that’s what’s going to happen. I may have people below me, one says we don’t want the students, the other says I want the students, but there’s somebody who has the author- ity to make the final decision.…If you have split administrations, how do a man and wife decide? ey argue it out. ey fight it out. If you have one person calling the shots, it’s easy.…It is the central governance problem in academic medicine today. e chairpersons of the clinical departments face challenges no different from those of the dean. In the early parts of the twentieth century, the chairs of clinical departments had God-like status. ey spent their time caring for patients, teaching, and pursuing research and, because of the relatively small size of most departments, their administrative roles were limited. As AMCs grew in both size and complexity, the job of the department chair became increas- ingly administrative and far more intricate. Because departmental practice plans remained independent, the chairs of the large departments had considerable autonomy and authority. In the mid- to late 1990s, the independent department practice plans began to merge together into unified practice plans. Although these practice plans often did not work as integrated entities—that is, revenues were not shared across the traditional departmental barriers—they did have leadership teams. In some cases, the boards of the practice plan consisted of the entire group of clinical chairmen; in others, the practice plan was managed by a committee of chairs. Regardless of structure, major decisions regarding clinical finances began to be made by the group of departments rather than by the individual chairs. At the same time, the economic and administrative separation of academic hos- pitals from their affiliated medical schools further diminished the role of the department chair. Chairs found themselves with similar levels of responsibility, but substantially less authority and a reporting structure to a large number of administrators—many of whom had different agendas [4]. In some AMCs, a department chair may need to discuss a single business opportunity or recruit- ment with a dean, a practice plan director, a practice plan CEO, a hospital CEO, a hospital COO, a hospital CMO, and a provost in order to achieve the neces- sary buy-in and support. is inefficient and cumbersome leadership structure usually results in nothing getting done. Leadership in the Academic Medical Center  45 e failure to define their roles clearly and to provide them with the nec- essary level of administrative authority has led to marked instability among department chairs and deans. is has led to job insecurity, which in turn causes many potential leaders to turn away from leadership opportunities and those who accept the mantle of leadership to do so for a relatively short period of time [5,6]. For example, in the 1970s, the average tenure for chairs of departments of medicine was 5.272 years. However, between 2000 and 2006, the average ten- ure of a chair of medicine had fallen to 3.997 years—less than the term of most start-up packages and contracts [6]. is average tenure is shorter than that of university presidents (8.5 years), chairs of obstetrics and gynecology (7.5 years), and the chief executive officers of Fortune 500 companies (~5 years) [2]. ere might be some consolation in the fact that chairs of medicine do have a slightly longer average tenure than do NFL head coaches; however, the coaches have substantially higher salaries and often longer contracts [7]. However, like NFL head coaches, Department of Medicine chairs sometimes move on to other “teams” as a dean or as a chair [6]. When asked how they might advise current chairs, a group of former chairs responded in the fol- lowing ways: “Don’t think of a chair as a permanent position; evaluate your effectiveness regularly; plan your exit; consider your next career move as soon as you become chair and reevaluate your plan regularly; don’t threaten to resign; and negotiate an exit package at the time of appointment or reappoint- ment” [8]. A lack of job satisfaction is also found among the chairs of other medical spe- cialties. A survey in 2002 found that 22% of chairs of obstetrics and gynecology departments were “somewhat/very dissatisfied with their positions” [9]. ey also noted “emotional exhaustion” and female chairs reported working more hours per week than their male counterparts [9]. Even chairs of ophthalmology, a group that is usually thought of as having higher job satisfaction, reported scores on a recent survey that reflected low personal achievement, emotional exhaustion, and a high risk for career burnout [10,11]. ese results were con- sistent with a study evaluating burnout in chairs of departments of otolaryn- gology, who identified stressors that had resulted in decreased job satisfaction, including hospital and department deficits, billing audits, loss of key faculty, staff dismissal, disputes with the dean, and being a defendant in a malpractice case [12]. It has been noted that “the current environment of academic medicine— with increased demands to do more with less—has made [these] chairs par- ticularly susceptible to developing burnout” [10]. During his presidency of the Association of American Medical Colleges, Jordan Cohen said, “As unprece- dented reforms pull our complex organizations in new directions, the depart- ment chair is arguably the linchpin bearing the most stress” [13]. According 46  Pursuing Excellence in Healthcare to Wilson, “Department chairs, once managing partners who set the research agenda, determined the clinical direction, and designed creative educational programs, find themselves in the role of ‘shop stewards,’ ensuring the work out- put, setting the hours, organizing call schedules, settling disputes, negotiating wages, and scuffling for directorships with the administrators” [14]. The 5-Year Rule At a national meeting of department chairs, I had lunch with a group of col- leagues: ree had just become chairs for the second time and two had recently become chairs. e conversation turned to what one colleague referred to as “the 5-year rule.” A neophyte, I asked what they meant by this expression. One col- league replied, “at’s when the money from your recruitment package runs out and you find that there really aren’t any other funds at your disposal so you have to leave or begin to fire everyone that you hired over the past 5 years.” Because deans at many schools do not have enough resources to support all of the school’s departments, a common strategy is to put together a recruitment package that provides opportunities for only short-term growth and recruitment. At the end of 5 years, the dean must shift the resources to other departments, leaving few resources to support the extended packages of the new division chiefs and inves- tigators who were recruited during the later years of the 5-year package. When the dollars that come from the medical school drop precipitously, the depart- ment is left to stand on its own two feet. is strategy fails for two reasons. First, no research program can stand on its own without institutional support and, second, unexpected budget down- turns can occur, resulting in an inability of the medical school to fulfill its 5 years of obligations. us, as pointed out by my colleagues, the real meaning of the 5-year rule is that, before reaching the 5-year window, a departmental chair should begin to look for what one of my colleagues described as an “exit strategy.” us, it is not surprising that the average tenure of a chair is less than 5 years. Although one can look humorously at the 5-year rule, a closer examination reveals that it can have a significant impact on leadership in the AMC. Like deans and department chairs in academia, corporate CEOs also have a relatively short tenure—only about 1 year longer than that of a medical school dean. However, there are distinct differences between a corporate CEO and a dean. For example, corporate CEOs generally do what they were trained to do; that is, they manage people and companies. us, when a CEO leaves a position, he or she has the opportunity to go to another position in the same or a different industry. Leadership in the Academic Medical Center  47 By contrast, AMC leaders are trained to be clinicians, investigators, or both rather than business leaders. ose in higher leadership positions, including deans, vice presidents, or even chairs of large departments, are often unable to continue their research or clinical activities at a level that would allow them to be competitive on a full-time basis and thus it is very difficult for them to transition readily back into a general faculty position. Unlike CEOs in corporate America, deans and department chairs do not have “golden parachutes”—exit packages or stock options that allow them to transition from one job to another without personal financial sacrifices and often allow them to land quite comfortably into retirement. e average age of today’s AMC dean is 58, so, in most cases, he or she is neither old enough nor financially stable enough to retire after stepping down from deanship. As a result, many former deans populate the offices of healthcare consulting firms, venture capital funds, the pharmaceutical industry, and large multina- tional executive search firms. More importantly, the uncertainty of their future also leads deans to be risk averse. ey avoid initiating unpopular changes in structure or culture that could shorten their tenure, believing that deferring decisions about implementing major change could appreciably prolong their ten- ure [15,16]. Cultural Impediments to Effective Leadership Because faculty, and in particular senior faculty, were taught from medical school to be self-sufficient and independent and because promotion in an AMC is based singularly on individual achievement rather than on a commitment to a collective goal, the faculty by definition becomes an impediment to change— particularly when that change involves moving to a more collaborative environ- ment and a team approach to both clinical care and science. Institutional power and influence are directly related to the money that any individual brings to the institution from grants or from clinical revenues. At large AMCs with thousands of faculty members, governance is often more rational because any single physician or group of physicians has less influ- ence on the economic integrity of the whole. However, at smaller AMCs—over half of the current 125 medical centers—smaller overall research portfolios, hos- pital margins, and endowments are associated with a smaller margin between revenues and expenditures. us, any single investigator or clinician can have a real or perceived impact on institutional finances if he or she leaves the institu- tion. As one dean noted [3]: 48  Pursuing Excellence in Healthcare e problem…is that your survival frequently is dependent upon the faculty at large, their judgment; and, you know, that can make it difficult to take the bold steps you may need to take at a time when there’s a lot of change going on around you. [ere is] always the fear that you’re going to upset too many people, and the more people you upset, the less you could manage. Another dean noted from a more academic business standpoint: “Well, the problem with academe [is that] academe is a compendium of a thousand small business people,…most of whom place their own interests at least on a par with the interests of the institution at large. And so, consequently, the first question they may ask is, well, how does this affect me?” [3]. us, to be successful, a dean must have some type of leverage over the faculty; resources and authority are the two levers that can most successfully be used to effect change. Another cultural impediment to effective leadership in an AMC—one that is rarely discussed because it is viewed as politically incorrect to do so—is the presence in some AMCs of voluntary faculty over whom the dean or hos- pital president has no control. Many have likened leadership in the AMC to an effort to “herd cats”; one can describe efforts to lead a voluntary faculty as “herding tigers.” Voluntary faculty do not care about academic awards, promotion, nomina- tion to leading academic societies, research support, or research space. eir salaries are not controlled by the dean and they often include technical services in their practices that compete directly with those housed in the AMC, such as imaging facilities. Although they often enjoy the opportunity to teach and can “draft” off the esteem associated with being a faculty member at a prestigious university, voluntary faculty also have an open opportunity to move their prac- tice to another hospital—especially when multiple AMCs or quaternary teach- ing hospitals compete in the same geographic region. e portability of their practice often gives them a level of influence in the AMC that is out of propor- tion with the actual financial impact of their practice. Although no objective data to assess the true role of voluntary faculty in any single AMC exist, it is interesting to note that of the top hospitals on the U.S. News and World Report list, most have so-called “closed staff models” in which only full-time members of the faculty practice plan receive hospital privileges. How leadership in open-staff models deal with voluntary faculty—or how good they are at herding tigers—can often supersede the ability to provide excellence in patient care as a marker of success or failure of an AMC leader. Leadership in the Academic Medical Center  49 Structural Impediments to Effective Leadership—The Loosely Coupled System Although scholars in the fields of business and management have not studied AMCs per se, some of their work is directly applicable to the structure of the AMC. For example, the structure of an AMC is very much like the organiza- tional structure that Orton and Weick first referred to as a “loosely coupled system” [17]. In such a system, “individual elements have high autonomy relative to the larger system in which they are imbedded, often creating a federated char- acter of the institution.…actions in one part of the system can have little or no effect on another or can unpredictably trigger responses out of proportion to the stimulus” [17]. e individual elements of a loosely coupled system are poorly integrated because each element focuses on itself rather than upon the whole. Furthermore, the central authority is derived from the members rather than the individual parts of the entity receiving their authority from a centralized struc- ture. Indeed, one might define the loosely coupled system as an anarchy rather than an organization. Numerous situations can occur in a loosely coupled AMC that obviate the ability of its leaders to make the right decision at the right time. For example, one colleague described a recent episode at an institution in which the chief of the division of cardiology decided that his group was not getting its fair share of discretionary dollars available to the department. Based on a strategic plan, the chair of the department had decided to invest some of the department’s dis- cretionary dollars in the recruitment of two very promising young clinician sci- entists and a new development person to enhance the department’s fundraising efforts. However, the chief of cardiology wanted to raise the salary of his clinical group, despite the fact that their productivity had remained relatively flat over the previous 2 years and that they were already at the 75th percentile of salaries for academic divisions. When the chair of medicine stood his ground, the chief of cardiology took his concerns to the dean of the medical school and to the CEO of the hospital. Fearing that the hospital’s cardiology program could be at risk if the chief of car- diology left for a competing hospital, the CEO agreed to provide additional dol- lars to the division. However, because the hospital and medical school finances were a zero-sum game, the hospital withdrew some of its support to the dean, who in turn decreased support to the department. As a result, the chair was unable to pursue the department’s strategic goals. A second challenge that faces the loosely coupled AMC is what John Isaacson has referred to as the difficulties in building alliances between “church” and “state” [18]. Isaacson uses these terms to define the two halves of the AMC: the professional half (the church) and the managerial half (the state). In church–state [...]... for the particular tasks at hand; can “train” a large number of leaders at one time, thereby allowing them to begin to work together as a team by breaking down organizational boundaries that may separate them; and can be very effective in changing the organizational culture These programs are built on the experience of successful industry training programs [34,35] Successful companies have continuously... the physician–patient interaction or the management of an independently funded research program By contrast, administrators usually advance in their careers by pursuing graduate degrees in business or management, perfecting their managerial and leadership skills through job opportunities, and demonstrating an ability to build collaborative teams that can focus priorities toward attaining a defined vision... continuously trained their own leaders and planned the succession of those leaders into progressively more senior positions; this has allowed them to maintain and continually align their institutional visions and goals [26] Recent initiatives have focused on training at the medical student and resident levels rather than waiting for physicians to complete their training and then matriculate into academic faculty... make decisions regardless of their popularity Decisions are neither arbitrary nor capricious and are made in a manner consistent with the clearly defined core mission of the institution: in the case of the AMC, the ability to provide outstanding patient care The development of a service line concept facilitates the organization and management of multidisciplinary teams focused on improving the quality... Excellence in Healthcare areas in which the company competes [26] For example, a survey of Canadian companies in 2006 demonstrated that individuals with relevant industry experience topped the profile list for new directors [41] In addition, 98% of Canadian companies surveyed offered continuing education for directors run by the board rather than by management in order to enhance the board’s knowledge base... [Most of the service line leaders] lacked decision making power in one or more of the following areas and had to cede authority to a related academic or hospital leader: influence or authority over academic appointments; span of budgetary authority (up to and including profit and loss accountability); authority over allocation of clinical and research space and equipment; influence or authority over clinical... Leadership in the Academic Medical Center    55 confront the brutal facts of the current reality while maintaining absolute faith in the ability to succeed; have an incurable need to produce sustained results; approach tasks with a workmanlike diligence; and more often than not, come from within the institution The leaders of these “good to great” companies did not “create alignment,” “manage change,”... Victor Dzau at Duke, Arthur Rubenstein at the University of Pennsylvania, Samuel Their at Harvard, Edward Miller at Hopkins, Toby Cosgrove at the Cleveland Clinic, Dennis Cortese at the Mayo Clinic, Michael Johns at Emory, Herbert Pardes at New York Hospital, Edward Benz at the Dana Farber Cancer Center, and Michael Bishop at the University of California, San Francisco, to name a few It is important to. .. internally Because of the matrix organizational model, most of the cardiology centers interviewed sought leaders who had the capacity to influence others and build collaboration across departmental, disciplinary, and organizational lines”; cancer centers had the added need to identify individuals who were comfortable in all aspects of the cancer center, including bench research, clinical research, and... access to study the success or failure of these very different service line models Train the Next Generation of AMC Leaders Another mandate that has come out of the many efforts to understand the complexities of leadership in the AMC is the urgent need for younger individuals who have didactic training in the “business of medicine.” The absence of physician involvement in both strategic and tactical planning . and authority. In the mid- to late 1990s, the independent department practice plans began to merge together into unified practice plans. Although these practice plans often did not work as integrated. department chair became increas- ingly administrative and far more intricate. Because departmental practice plans remained independent, the chairs of the large departments had considerable autonomy. was impacted most by the decline in the resources available to medical schools following an era of abundance, the increased competition that AMCs faced in the clinical arena, and a reliance