Hospital CEO turnover reached a record high in 2013, according to a report from the American College of Healthcare Executives (ACHE).
Last year, the CEO turnover rate tracked at 20 percent, the report states, the highest since ACHE began monitoring the rate in 1981. The turnover rate in 2012 was 17 percent, and varied between 14 percent and 18 percent in the last decade, according to the report.
"The increase in the turnover rate may be indicative of a combination of factors, including an increased number of baby boomers seeking retirement, the emerging trend toward consolidation in our industry and the complexity and amount of change going on in healthcare today," said Deborah J. Bowen, president and CEO of ACHE. "The increase in the rate reinforces the need for healthcare leaders to work with their boards to ensure appropriate succession plans are in place."
On a state-by-state basis, Alaska had the highest adjusted CEO turnover rate, with 37 percent, followed by Oklahoma with 33 percent and Arkansas with 30 percent. Vermont and Rhode Island, both with zero percent, tied for lowest turnover, followed by New Jersey and West Virginia, both with 10 percent, according to the report.
As turnover increases, the healthcare sector looks to hire leaders from outside the industry. A recent healthcare executives survey said the next generation of leaders would come primarily from the financial sector, the hospitality industry and the investment industry, echoing December 2013 findings by Black Book Rankings.
"It's been very recent in our 25-plus years of experience in executive search that a shift to a skill set outside of the industry norm has become acceptable," said William J. Ferguson, co-chairman and co-CEO of Ferguson Partners, Ltd., in the survey announcement. "But with growth and recapitalization of key strategic priorities, as well as the rise of guest-focused care, it's not surprising that finance and hospitality were the two 'outside' industries our respondents thought could be most successful."