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Abstract

This study documents the rising rate of hospital CEO turnovers between 1978 and 1988, a trend that has accelerated since the introduction of Medicare's prospective payment system. Using data from the American Hospital Association, we identify characteristics of hospitals experiencing rapid CEO turnover. Results show that full utilization along with a positive operating margin can prolong the CEO's tenure but ownership and system membership specify the findings.

For example, CEO turnover is higher in investor-owned, multihospital systems hospitals if they are small, if their costs are high and if they have recently joined a multi-hospital system. By contrast, in not-for-profit multihospital systems, turnover is higher if they have low occupancy and low operating margins.

CEO turnover in not-for-profit, freestanding hospitals is higher in metropolitan areas and in the Western region of the US as well as in hospitals with low occupancy, low operating margins and lower costs per patient day. Governmental hospitals experiencing higher CEO turnover are small, metropolitan and tend to be located in any region except the Midwest. Many have recently joined a multi-hospital system and have experienced low operating margins.

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Hospital CEO Turnover: Modelling More or Less Durable Places to Work

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