CEO turnover in rural hospitals
UND’s Center for Rural Health talks to West River Health Services CEO Matt Shahan about leadership in rural healthcare.
Leading a rural hospital or health system is difficult. Just ask Matt Shahan, who daily tackles everything from recruitment, retention, and salaries to board governance, facility growth, community involvement, and third-party reimbursement.
As chief executive officer (CEO) of West River Health Services (WRHS) in Hettinger, N.D., Shahan understands the opportunities and challenges that come from being a CEO in a rural hospital. Most people in rural healthcare positions wear multiple hats, and Shahan wears three: he is also the CEO of Western Horizons Living Center, an assisted living and skilled nursing facility, and the West River Health Services Foundation System.
And although there has not been much research or data on rural hospital CEO turnover to date, many in the industry are beginning to realize the need for such research.
NRHA policy paper
This is where Shahan comes in, for he’s also a National Rural Health Association (NRHA) fellow. NRHA’s Rural Health Fellows is a yearlong, intensive training program that develops leaders who can articulate a clear and compelling vision for rural America. The program is set up to educate and orient new administrators to policy development. The platform helps build leaders for the future, and one of its objectives is to have fellows write policy papers that could potentially be used to help shape future federal policy.
Helping shape such policy is why Shahan and his co-NRHA fellow Mellie Bridewell, CEO of Arkansas Rural Health Partnership, a public nonprofit comprised of 14 rural hospital members and two Federally Qualified Health Centers spanning south Arkansas, spent a lot of time interviewing health system CEOs in the past 18 months. Out of these conversations emerged a paper entitled “Rural Hospital CEO Turnover,” which Shahan and Bridewell wrote for the NRHA.
According to Shahan and Bridewell, the need for strong and steady leadership at rural health facilities has never been greater. Yet turnover rates for top executives in America’s hospitals remain high. As the pair note, CEO turnover rates average 18 to 20 percent per year, “with turnover rates as high as 30 percent in some states,” according to a report by the American College of Healthcare Executives.
“While leadership is not the sole factor in a hospital’s success or failure,” Shahan told the UND Center for Rural Health, “the smaller the facility, the bigger the impact a positive or negative leader can have on the success of the hospital.”
If you’ve seen one, you’ve seen one
Shahan has been the CEO at WRHS for almost five years. He previously worked in the hospital’s information technology department, then left for a few years before applying for the CEO position. That local and organizational knowledge helped prepare Shahan for the new position. He knew what issues to expect.
“There is a saying in rural health,” he shared. “‘If you’ve seen one Critical Access Hospital, you’ve seen one Critical Access Hospital.’ You can’t pool them all together.”
Noting that he and Bridewell tried to highlight the importance of mentorship, Shahan said that “Even before COVID-19, four or five times a week I would reach out to another CEO and ask ‘have you ever gone through this, and how did you handle it,’ and I get those same types of calls.”
And as the paper argues, CEOs often do not have someone helping train them or offering advice on their performance – and they might be open to working with a coach or mentor to help develop their leadership abilities and help with challenges. Available resources such as the NRHA or hospital associations can help prevent rural hospital CEO burnout and provide additional peer support.
Part of that training involves helping leaders understand their community roles.
“Not only is it important to be a strong leader for the hospital,” added Shahan, “but we are typically the largest employer in our community. We are the economic driver behind our community. At WRHS we employ 240 staff. If we are not succeeding, our community is not succeeding. It is really important for the leader to be community-involved and community-minded, and to remember you are here to serve the members of the community. Our communities need us to serve their needs.”
Training and education are also valuable tools, not only for CEOs, but also for the facility’s board of directors. One state has even begun requiring and financing training opportunities after realizing that poor leadership can lead to the poor performance of a hospital.
“For incoming CEOs,” Shahan continued, “they often want to hit the ground running and make an impact, but all people really care about is if you care to get to know them. Coming into a new role, in a new community, the biggest thing you can do, and the most challenging in rural, is to try to get to know as many people as you can, try to get involved in the community.”
“Taking matters one step further,” the paper continued, “rural facilities also need an educated, well-informed, and engaged board of directors. Boards are typically unpaid positions at nonprofit hospitals, and requiring continuing education is often a reason to not join or maintain memberships on rural boards.”
The board of directors is there for governance, and the CEO is responsible for operations. It is easy for the board to want to set a direction that the CEO doesn’t believe the organization can go. CEOs can struggle when the board wants to move in another direction.
“The education of the board is incredibly vital to the success of the organization,” he continued. “Healthcare is extremely complex. How do we expect volunteers who go to a meeting once or twice a month to grasp it and make educated decisions on the future of the organization without providing some form of education?”
This is why Shahan tries to recruit “people that represent our entire service area” to the West River Board, including business owners, retirees, homemakers, bank presidents, teachers, and farmers and ranchers.
North Dakota is unique because there is a law in the state’s Century Code that states organizations cannot spend more than a specific amount of money for nonprofit board work. Taking members to a national conference, which could include registration, travel, and lodging, can be expensive. In-state training opportunities have been valuable, including programs run through UND’s Center for Rural Health.
“We have to get creative in providing some of these opportunities,” Shahan said. “Some of the rural North Dakota hospitals have talked about going in together to get our boards trained. The intent of the law was good, you don’t want to incentivize volunteers, but there have been some unintended consequences.”
Succession planning is another important aspect examined in the paper. In a small rural community, what happens to a facility if the board decides to part ways with the CEO?
To that end, Shahan’s and Bridewell’s paper quoted Deborah J. Bowen, president and CEO of the American College of Healthcare Executives, as suggesting that “Organizational restructuring, the movement of CEOs to different positions within health systems, and the fact that many CEOs are reaching retirement age all contribute to this high level of turnover in hospital CEO positions. Succession planning for C-suite positions, along with a focus on developing the next generation of leaders, is key to organizational success.”
Shahan believes succession planning is incredibly important and incredibly hard. In rural facilities, if a staff member could potentially be training for a future role, their current role may not be fulfilled.
“I have a documented sheet of the type of traits I believe the board should look for,” said Shahan, “companies they could call and talk to, contacts in the state they could get a hold of, ideas for how to tweak the process of a search. Succession planning is so important, because if I am in a car accident tomorrow morning and there is no leader, they can’t afford to wait a month before they try and fill my role. They need to have a document so they can know the facility direction and not create a concern amongst the staff.”
Whether the issue is current administrative affairs or succession, though, Shahan concludes that the central focus of any health CEO should be leadership.
“Mellie and I really wanted the paper to highlight the success or failure of an organization can ride on the leadership or lack thereof, of this position,” Shahan said. “I’ve had quite a few people reach out to me through LinkedIn. They read the paper and appreciated it. There have been some follow-up questions from individuals. In the end, the point of these papers is to create conversation and brainstorm and try to do better.”