CEO turnover has been rising during the past two years, among organizations that run the gamut as far as size, tax status and ownership structure.
The reasons behind the trend are also plentiful. For starters, many hospice leaders are aging with the rest of the population and reaching retirement age. Others have migrated to other providers or have been removed by a company’s board.
Tangential to this is executive shake-ups related to acquisitions, though those are typically a planned component of the subsequent integration.
Hospices should always be prepared for a leadership transition, even if it occurs on an interim basis, according to Susan Hunt, board chair for North Hawaii Hospice.
“Looking at hiring a new executive director is probably one of the most important functions that a board does, and so we did some research on how to set up a policy that would guide the governing board if the executive director was absent and we weren’t sure when they were coming back,” Hunt told Hospice News. “This could be because of either a temporary, planned issue like a medical leave or things like medical emergencies, an accident that causes a death or just some other unexpected event.”
Key considerations include determining who will communicate the transition to the public and employees and whether the organization will need an interim leader. The board would also have to define the parameters of an interim CEO’s authority, Hunt said.
The North Hawaii board hypothesized about potential circumstances that could result in a temporary or permanent leadership change and created policies for how they should respond.
As they developed their plan, North Hawaii Hospice began incorporating questions into their executive performance reviews regarding their future plans or which individuals on their teams could step up during an unexpected event.
Some providers begin their preparations years in advance.
The Florida-based nonprofit Empath Health included a transition plan in its agreement to merge with the former Stratum Health in February 2020.
As these transitions occur, the next generation of hospice leaders will have to stay nimble and adapt to the changing health care environment, Scuillo told Hospice News days before he retired.
“Just in the 40 years that I’ve been in health care — it should come as no surprise — the needs of individuals have changed in priority, and we’ve got to move with that,” he said. “I would say ‘Have courage. Have the courage to step outside of your comfort zone,’ and I realize that in many ways that’s how hospice began.”
CEO turnover will almost always cause some level of disruption, but careful planning can mitigate the impact, according to Hunt. For example, the board and others within a company for a time may be working with a team that is not yet up to speed on an organization’s market, processes or other critical functions.
Providers should also consider the possibility that the search for a new executive could take some time, particularly in rural or more sparsely populated areas.
When a new CEO does come in, they too must be ready for change, Hunt indicated. This could require a new set of skill sets among hospice leaders.
“The existing structure for hospice and the per diem payments have been around pretty long,” Hunt said. “But with value-based reimbursement models that are being proposed, we’re going to need to look at a whole new aspect of data management, data collection and data analysis. For the younger generation, using data for analysis and making business decisions will be the norm.”
The rising profile of managed care was a consideration in Amedisys Inc.’s (NASDAQ: AMED) decision to bring in former Tivity Health (NASDAQ: TVTY) CEO Richard Ash to lead the company.
For the wellness solutions company Tivity, Medicare Advantage is their bread and butter.
Amedisys seeks to leverage Ashworth’s managed care experience as the payer mix for its home health, high-acuity and palliative businesses gravitates toward managed care.
“The other thing [in choosing Ashworth] is Tivity. One of the things that I think is really important is that they depend on payers, and their understanding of how payers work,” Amedisys Chairman Kusserow told Hospice News. “Understanding how to deal with payers is increasingly important, understanding how payers think about what they’re looking for. I think we have the solutions for them.”
Ashworth is also well-poised to lead a large organization, according to Kusserow. The Amedisys footprint includes 532 locations in 37 states and the District of Columbia, and they employ close to 20,000 people.
Recent examples abound for CEO turnover.
PE-backed Bristol Hospice in February tapped Alex Mauricio as its new top executive. Mauricio previously served as the company’s president and chief strategy officer. He succeeded Hyrum Kirton, who moved on to the board of directors.
Also in February, California-based post-acute care company Charter Healthcare Group appointed Cheryl Lovell as its new CEO. The company, a portfolio company of Pharos Capital Group, provides hospice, home health, complex care management and palliative care services to nearly 13,000 patients in eight states.
The prior month, Melinda Egging took the helm at Colorado-based Sangre de Cristo Community Care. Leadership transitions also occurred at Calvary Hospital, By the Bay Health, Community Hospice and Hospice Maui.
As more CEOs hand over the reins, providers have a vested interest in helping the next generation of leaders prepare, according to Bill Dombi, president of the National Association for Home Care & Hospice (NAHC).
“We need a mentoring program for that next generation because there are some obstacles. Perhaps primarily, they’re driven financially, because middle management has been one of the places to cut administrative costs. So that next generation is not as accessible as they might have been if there was that middle management,” Dombi told Hospice News. “I’d say, and this comes from my observation, that the next generation shares the passion for the delivery of care — be it hospice or home health services or other home care services. They do bring a much more evidence-based approach to the clinical and business operations side.”
Companies featured in this article:
Amedisys, Bristol Hospice, By the Bay Health, Calvary Hospital, Charter Health Care Group, Community Hospice, Empath Health, Hospice Maui, National Association for Home Care and Hospice, North Hawaii Hospice, Pharos Capital Group, Sangre de Cristo Community Care, Tivity Health