Beyond bedside manner: How physician CEOs get it done

Hello and welcome to Modern CEO! I’m Stephanie Mehta, CEO and chief content officer of Mansueto Ventures. Each week this newsletter explores inclusive approaches to leadership drawn from conversations with executives and entrepreneurs, and from the pages of Inc. and Fast Company. If you received this newsletter from a friend, you can sign up to get it yourself every Monday morning. Many of America’s top hospitals are led by physicians. Mayo Clinic CEO Gianrico Farrugia is a gastroenterologist. Cleveland Clinic CEO Tomislav Mihaljevic is a surgeon. Mihaljevic’s predecessor, Toby Cosgrove, has argued that physician CEOs are successful in managing health systems because they have “peer to peer credibility” with the practitioners in the field. A keen eye for unbiased details Robert I. Grossman, CEO of NYU Langone Health, says his medical training, in turn, has helped make him an effective leader—and even given him skills businesspeople may lack. Grossman, who is board-certified in radiology and neuroradiology, says good radiologists “try to take out all your biases and just look for the signals,” enabling them to detect, say, a metastasis that a pulmonologist or primary care physician might dismiss as pneumonia. “I think that’s unusual for a CEO to have training that enables them to extract their biases, detect signals from the noise, and manage in a very focused way,” he says. He also credits his background in research with providing him with rigorous thinking and structure that has held him in good stead as a manager. “There’s a discipline in thinking about hypothesis-driven research that actually carries over to running a business,” he says, adding: “In medicine, if you’re going be successful academically, you have to be very well organized.” The complex business of care Grossman’s detail-oriented approach has paid off. NYU Langone posts annual revenue of $14 billion across the entire health system, up from $2 billion in 2007, when Grossman became CEO and dean of NYU’s medical school. Grossman says NYU Langone is the most profitable academic health system in the United States, with its hospitals posting an EBITDA margin of 14.7% last year, according to its audited financial statements. Indeed, the complexity of running a nonprofit healthcare system rivals that of most for-profit companies. Healthcare CEOs face many of the same issues as their corporate counterparts—attracting and retaining talent, managing rising costs, dealing with technological change and cyberthreats—while also navigating a host of federal, state, and local regulations. (Not all physician CEOs are successful. Steward Health Care, led by surgeon and entrepreneur Ralph de la Torre, filed for bankruptcy in May, and the U.S. Senate is holding hearings on the system’s collapse.) For Grossman, who is retiring next year, hospitals, in particular, need to be reliable and consistent in delivery of care. But he says NYU Langone is also in the hospitality business. “You want the patients to feel comfortable, like there’s compassion and caring—that combination of high reliability and hospitality that’s very unusual for an organization,” he says.   Equity and excellence in harmony Grossman says he has made reliability and hospitality a priority across all the systems’ facilities, which have expanded to include hospitals in Mineola, a suburb of New York City, and Brooklyn, in a neighborhood with one of the highest Medicaid populations in the U.S. Since taking over the former Lutheran Medical Center in the Sunset Park neighborhood in 2016, NYU Langone Brooklyn has seen a 33% drop in mortality rates, according to a study published in JAMA Network Open. “We said our poor patients deserve the same care as rich patients,” he says. “There’s no equity without excellence.” There’s a lesson here for all leaders trying to navigate similar tensions in their business: Rather than seeing equity and excellence as being at odds, healthcare leaders such as Grossman see them as complementary. “A lot of health systems are facing increasing pressure to cut costs and boost the bottom line,” says Bryan Blatstein, executive vice president of Spectrum Science, a health and science advisory firm. “It’s the rare executive who can strike the balance between stakeholder demands and patient needs, but that’s precisely who is best positioned to lead the way forward.” Do you balance profit and purpose? How does your organization handle the tension between consistency and care, equity and excellence, or profit and purpose? Send your ideas and insights to me at stephaniemehta@mansueto.com. I’d love to publish some of your stories in a future newsletter. Read more: unconventional leadership• Meet Netflix’s unconventional co-CEOs • The makings of a “good boss”• Transformative leadership for extraordinary times