Why Veterinarians should control Veterinary Hospitals

Why Veterinarians should control Veterinary Hospitals 

The Myth of the paired administrator and medical leader

For many years the mantra in human medicine has been that hospitals run best when an administrator and a medical leader are paired.  This structure allows business to be run by business folks and the medical side to be handled by those with the most medical knowledge.  The idea of this pairing was that it allowed each party to handle what they did best. Many large veterinary group practices have followed this structure.  In addition, many of the larger consolidators are messaging that business issues are hard so why not turn them over to business experts and have veterinarians just concentrate on medicine?

The problem in separating business issues from the practice of medicine is that there is tremendous overlap. The quality of medicine you can provide really depends on the culture of the organization, recruitment of quality support staff, the caliber of the equipment and technology you have available, and whether dollars are committed to training, research, and quality improvement projects.  The way resources are allocated can have a dramatic difference on the type of medicine you can provide.

The main question with a paired medical leader and business administrator is how final decisions are made  Many times, deep discussion in the pairing can lead to collaborative results.  However, what happens if there is not alignment?  Is the medical leadership ultimately in charge or is the administrator?  This often can come down to who is the CEO.

The Power of Expert Leaders

A recent ideacast from the Harvard Business Review discussed this question. Amanda Goodall, a professor at Cass Business School in London, has shown in several studies that the best CEOs of most organizations are not hired administrators, but are actually the experts in their field. .  Her research confirms my strong opinion that veterinarians should control veterinary hospitals.

Much of Goodall’s research has looked at hospital leadership and its impact on quality. A 2011 study looked at the 100 best hospitals in cancer, digestive and cardiovascular care and found that quality scores were 25% higher in physician run than in non-physician run hospitals.   Another similar study looked at 12 additional specialties and confirmed this relationship between physician leadership and quality.  It is no coincidence that the CEOs of the top two hospitals, Mayo Clinic and Cleveland Clinic (according to US News and World Report’s rankings), are both physicians.   In 2014, all of the top 10 psychiatric hospitals in the US were run by experienced psychiatrists.

Quality at these organizations has not come at the expense of profit.  Additional studies have shown no difference in financial performance of hospitals with between physician and non-physician leadership.  As mentioned in my blog last week, Mayo Clinic provides some of the most efficient care in the nation with Medicare costs per patient in the lowest 15% in their community.

So why is physician leadership better? 

This question was explored in a Harvard Business Review article, “Why the Best Hospitals are managed by Doctors.”  One of the reason is peer to peer credibility.   Doctors tend to listen better to other doctors and this leads to better organizational alignment. In addition, studies across workplaces have shown that employees have higher job satisfaction if they perceive their boss as someone who would be able to step in and do the work well.  In addition,  expert bosses are better able to assess skill and performance in those that work for them than are trained managers or administrators.  In the medical field, Dr. Toby Cosgrove, CEO of the Cleveland Clinic believes that having a physician at the helm creates a safe space for physicians to discuss and test innovative ideas. The Mayo Clinic has embedded physician leadership in their culture that always puts patients first.

Why should this matter to veterinarians?

Many current consolidators are pitching a merger or sale so veterinarians can give up the headaches of business.  and  just concentrate on medicine.  This pitch minimizes the incredible in the trenches business knowledge of veterinarians. Many women, who can suffer from imposter syndrome, are easily swayed to believe that there must be someone better than them to handle management challenges. It ignores the huge overlap that exists.

None of this is saying that skilled managers and administrators are not valuable.  The key is really whether veterinarians work FOR administrators to create cash flow for investors or whether administrators and managers work FOR veterinarians to help them provide quality care for pets and their families.  I am advocating that veterinarians frustrated with management need to hire a skilled manager who reports to them.

If we want to continue to provide the best quality for pets and their families, and to provide workplaces where veterinarians have high job satisfaction, we need to work as an industry to keep veterinarians at the helm.