The good news is that the economy is improving. LastFriday’s economic news shows that the economy is growing at a faster rate than previously thought.
The bad news is that we are a long way from anything approaching robust growth, and the continued recovery is actually hanging in the balance as the White House and Republicans in Congress scuffle over plans to avoid the fiscal cliff with its financial sequestration, the across-the-board spending cuts that could cost as many as 700,000 jobs in healthcare if the full impact of the reductions are allowed to take effect, one study predicted, and certainly another recession.
In healthcare, an industry historically known for being recession proof, and therefore an attractive career choice for an increasing number of graduate students, our most recent deep financial downturn should disabuse anyone from thinking that there will be ample jobs to absorb the recent graduates with healthcare management degrees. Yes, the number of healthcare executives who will be retiring over the next 10 years will push the turnover rates to new highs—the retirements, and those executives who are unable, or unwilling, to adapt to the new realities and are forced out.
With these thoughts in mind, here is a summary of career management trends over the next five years:
CEO and C-suite turnover will jump from about 17 percent to more than 25 percent on an annual basis
This turnover will create new opportunities for well educated, top performing executives, but industry consolidation and smaller executive teams will fuel intense competition for the top leadership positions
Hospital CEOs will accelerate the pace of shedding costs, which means they will outsource any function that is not critical to core business lines, hence the smaller executive teams
Being a hospital chief executive is currently one of the most desirable positions in the healthcare food chain. Within eight years that may not be the case as more of the care is shifted to outpatient settings
Deficit reduction will produce a series of 1998-styled Balance Budget Acts every three to four years that continue to ratchet down government payments to hospitals. The industry will reach a financial tipping point that will force redesign of the business model. Less regulation, new systems of care delivery and vendor relationships will produce unparalleled opportunities for executives who can successfully innovate
Executives will be forced to spend more time on career management issues. The average effort most healthcare executives spend today will be woefully inadequate within five years. Performance and innovation competency will be important differentiators
The top performing executives will be in high demand. Organizations that embrace innovation will be the employers of choice
The rapid flow of information will require new time management skills. Executives must master the ability to focus on the information that is critical to their jobs and delegate the rest. In larger organizations, the CEO’s assistant will play an increasingly important role. Look for one new position to emerge—a Chief of Staff type of role