Why a Career in Hospital Turnaround Management?

The following article was written by a colleague, Arnie Kimmel. Arnie (for clarity, let's call him Arnie2) is an experienced turnaround CEO currently a partner at Tatum. I want to express my gratitude for Arnie2's contribution to Arnie's CFO Spot, as this is an important and timely topic for the industry.



First let’s clarify terms. I find that people use the terms “interim management” and “turnaround management” interchangeably but appropriately when describing a short term leadership engagement in a hospital facing some sort of transition. Typically such a transition involves a search for a new CEO, a deteriorating bottom line and/or a pending affiliation. Since none of these circumstances could be described as maintenance of the status quo, let’s stick with turnaround management.

Next, the advantages. It’s a virtual certainty that there is and will continue to be a significant demand for these services. Hospitals continue to lag other industries in the application of technology to effectively manage both productivity and quality, the boost from Obama-Care notwithstanding. To the extent that payers, starting of course with Medicare, phase in a hybrid system of payment that takes into account both the quantity and quality of services and to the extent that hospitals and doctors will begin to have partially aligned incentives to provide mutually accountable care, there will be many hospitals and health systems that won’t be able to adapt quickly or well enough.
In my experience, most of the hospitals facing these issues are aware of the need for change, so the time, energy and political chips needed to be spent for education there is minimized. Otherwise, leading the unwilling becomes a most unpleasant and time-consuming challenge. The process of sorting out priorities to be addressed in the short term is both a challenge and an opportunity. Making decisions with incomplete information, trusting one’s intuition as well as intellect and then making a positive difference in an organization that’s not used to positive change can provide the kind of reward that makes the profession of management worthwhile in the very first place.
Finally, the disadvantages and a word (or two) about risk. Clearly the major disadvantage of the kind of work described above is travel and the dislocation caused by being gone during the week for months at a time. There are ways to minimize the dislocation, such as being sure to be home both Sunday and Friday nights and Skyping.

Also, it must be said that turnaround management on an interim basis does not provide the satisfaction of seeing the long term benefits of decisions made earlier.
My advice is that turnaround management is not for the faint of heart. It requires a fair amount of courage and self confidence to believe that one can identify the right issues in what Peter Drucker described as the most complex organization to manage; that is, a hospital. Being able to do that and then “turn” the organization in a positive direction can provide a significant feeling of major accomplishment.