With the business side of health care becoming increasingly tied to success on the clinical side, more organizations are seeking CEO candidates who have an MD as well as an MBA.

As payment and delivery models transition to value-based care, the need for medically trained CEOs and other senior executives is becoming more fully recognized.

“Who better to understand quality and patient care than the physician, right?” says Linda Komnick, principal and co-leader of the physician integration and leadership practice of Oak Brook, Ill.-based recruiting firm Witt/Kieffer.

Seven to 10 years ago, Komnick says, most searches for physician leaders were for clinical roles, such as vice presidents of medical affairs and chairs of departments. Now, health systems, accountable care organizations, integrated delivery networks, and insurance companies are seeking clinical expertise in candidates for their highest-ranking positions.

“All those organizations are looking for physician leaders,” Komnick says. “I would say the demand is outpacing supply, and I don’t think that’s going to change anytime soon.”

Komnick says physicians often are the best choices to lead other physicians and organizations. “They know how to create alignment and drive the delivery of high-quality, patient-centered care,” she says.

Demand Outpaces Supply

Because of the low supply of physician executive candidates relative to demand, Komnick says many organizations are struggling to hire experienced MD/MBAs. “Many of these physicians are looking at three to four different positions at one time,” she says.

Despite the urgent need, Komnick says the best way to fill physician executive roles is internally, through succession. Building your own physician leaders through experience, education, and training produces candidates who already are familiar with the organization’s culture.

“I think the most important thing is developing your own talent,” Komnick says. “You’ve got to have some sort of pipeline. It’s so important to start educating and building your own team of healthcare executives focused on the physician leaders.”

“We’re seeing that now—many organizations have leadership academies and other physician-executive development initiatives,” she adds. “It creates loyalty and commitment by the physician.”

Peter Angood, MD, CEO and president of the American Association for Physician Leadership, says the ability to recruit from within depends largely on the size of the organization and the physician affiliation structure. “The more integrated physicians are into an organization, the better opportunity there is to potentially identify those who could do well in these types of roles,” he says. Larger health systems may also have a greater pool of candidates.

Physicians who have high emotional intelligence (EQ) and are adept at building consensus and creating effective teams often make good business leaders, Angood says. This EQ can be demonstrated through work in areas such as quality, safety, and patient relations initiatives, he says. “An organization ideally needs to identify early those physicians who have a natural aptitude and then help facilitate a maturation of those aptitudes and skills through training and experience.”

Helping Organizations Perform Better

The combination of clinical expertise and experience coupled with strong business acumen appears to be effective for running a healthcare organization, according to a study and recent performance data.

“There is a recognition that well-educated physicians with leadership and management skills will help organizations perform better,” Angood says.

Physician-run hospitals perform approximately 25 percent better on quality scores compared with hospitals run by nonphysician executives, according to a 2011 studyof top-performing U.S. hospitals by Amanda Goodall, PhD, an associate professor at Cass Business School, City University London.

Goodall’s research focused on performance in three specialties: cancer, digestive disorders, and heart and heart surgery, using rankings from U.S. News & World Report’s “Best Hospitals 2009.”

In an articlepublished in 2013, subsequent to her initial research, Goodall points out that the U.S. News & World Report rankings also include an “Honor Roll” of hospitals that consistently outperform other hospitals in at least six quality measures. Goodall found that the CEOs of these hospitals are more likely to be medically trained physicians, and the trend has been evident since at least 2009, when Goodall’s data were collected.

Additionally, Angood points to Centers for Medicare & Medicaid Services data on Pioneer accountable care organizations (ACOs), which show that physician-led ACOs generally perform well in quality and financial outcomes.

A 2014 studypublished in Health Affairs found that 51 percent of ACOs were led by physicians, and another 33 percent were run jointly by physicians and hospitals. A majority of the governing board was comprised of physicians in 78 percent of ACOs. The authors contend that physician involvement with ACOs will influence how effective the organizations are in improving quality and reducing costs.

Although many ACOs are physician-driven, only about 5 percent of hospitals are led by physicians, according to the American Hospital Association. However, Angood says that figure will surely rise as more healthcare organizations realize the advantages of placing physicians in leadership roles. “There is clearly an increased demand for physicians to be in leadership roles in the C-suite, and numerous health systems are actively seeking physicians to be their CEOs,” Angood says.

“A lot of it has to do with that strong comprehension of clinical delivery and good, strong business acumen, and how you marry those two together,” he says. “That’s an added advantage that the nonclinical leaders don’t have.”

Read more: Previous Physician Business Adviser articles on physician hiring trends include a look at the increasing prevalence of employed physicians and an examination of labor shortages, salaries, and turnover.

Karen Wagner is a freelance healthcare writer based in Forest Lake, Ill., and a member of HFMA’s First Illinois chapter.

Interviewed for this article: Linda Komnick, principal and co-practice leader, Physician Integration and Leadership, Witt/Kieffer, Oak Brook, Ill.; Peter Angood, MD, CEO and president, American Association for Physician Leadership, Tampa, Fla.

Publication Date: Monday, December 07, 2015