Job Turnover of CEOs in Teaching and Nonteaching Hospitals

Abstract

Using data published annually by the American Hospital Association, this research compares the turnover rates of chief executive officers (CEOs) at approximately 800 teaching and approximately 4,700 nonteaching hospitals. (In this study, teaching hospitals were all hospitals with any reported affiliation with a medical school. About half of the hospitals studied had a major commitment to teaching, with several residency programs and a substantial number of residents in each program.) For each year studied (1981 - 1987), the teaching hospital CEOs experienced less turnover than did nonteaching hospital CEOs. While the turnover of CEOs from nonteaching hospitals showed a linear increase each year, culminating at 25.2% in 1987, the turnover of CEOs from teaching hospitals showed a more erratic pattern, resulting in 18.7% that year. A group of hospitals was identified that accounted for a large proportion of all recent CEO turnover. For example, 16% of the teaching hospitals experienced two or more CEO turnovers between 1981 and 1986. But these "higher-turnover" hospitals accounted for almost half of all teaching hospital turnovers. The higher-turnover hospitals were disproportionately found among non-federal government hospitals, in regions outside the Midwest, and in large cities; these hospitals also experienced higher costs per patient day and lower operating margins than did the lower-turnover hospitals. The research suggests that turnover may be accounted for, in part, by the comparative performance of a hospital relative to other hospitals of its type. Thus, whether hospitals experience stable, increasing, or declining operating margins, the higher-turnover hospitals typically under-perform relative to other hospitals.