Major N.J. health system may not have to look far for a new CEO with the ‘right stuff’

The retirement of Atlantic Health CEO Joseph Trunfio has left one of the state’s biggest and most important hospital systems looking for a new leader.

Atlantic has said it will be making a nationwide search to find the right candidate.

But according to industry experts, the best one already may be in the Garden State.

“I’m sure everyone does a national search just because they want to see (all available candidates),” said David Knowlton, chief executive of the New Jersey Health Care Quality Institute. “But I have a hunch they may do better looking closer to home.”

For many reasons.

“(New Jersey) people know the lay of the land,” he said. “Health care is very local; the practice of health care in New Brunswick or Morristown is very different than Omaha, Nebraska.

“It’s an incredibly difficult job and the advantage someone from within has is they know the (health care) system and they know New Jersey.”

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Mark Manigan, a health care attorney with Brach Eichler, agreed. He said government regulation of hospitals is tougher in New Jersey than some other regions of the country.

“In addition to knowing and being expert in the business of health care, you ultimately have to become expert in the business of New Jersey, which has a significant governmental and political overlay to it,” he said. “These are really difficult jobs and crucial to the success and operation of these businesses, which are in a really challenging market and time right now.”

Traditionally, New Jersey has seen executives move from one hospital to another or up through the ranks.

Robert C. Garrett had nearly three decades of experience at Hackensack University Medical Center before he got the top job in 2009, and Barry Ostrowsky was a 20-year veteran executive at the state’s largest health system, Barnabas Health, when he became its CEO on Jan. 1, 2012.

Of course there is one factor that can’t be overlooked.

While both Garrett and Ostrowsky were promoted within the past five years, the CEO job description since their hiring has changed dramatically.

So says Reggie Yoskowitz, a senior partner in the health care executive search firm Foley Proctor Yoskowitz in Morristown. She said the CEO skills that health care boards are seeking are different now than 10, five — or even two or three years ago.

“(The CEO) needs to understand the whole concept of population health management, that health care is no longer just going to be about inpatient care and building more beds,” she said. “It’s really about their ambulatory footprint, their ability to connect to the community.”

And to understand the changes in the insurance component, as health care systems are venturing into health insurance to better manage and improve the health of their population.

“They may be seeking someone who has the experience of running a large integrated system that may include a medical school and an insurance product,” Yoskowitz said. “They have to be thinking in a broader and different way.”

Yoskowitz is not involved in the Atlantic Health Search, but she knows what they should be looking for.

Charting the future of a health care system often demands the ability to negotiate alliances with diverse partners, from physician groups to health insurers, she said.

“That is what really helps the organization: someone who is very adept at knowing what the end goal is and how to position the organization for success,” she said.

These new hires must have the right long-term vision.

“(Many executives) are very good at operations: that’s the day to day running of the hospital,” Yoskowitz said. “But when you are talking about where is the future going to be, and how do we make sure we’re a successful, thriving, viable part of that — you have to do much more than run a hospital.

“(A health care leader) has to be looking at where we need to be five or 10 years down the road and how do we get ourselves there. And that means creating very strategic alliances, and looking at new ventures, and being out in the community in ways that hospitals have not always been before.”

Creating partnerships, she said, is more important than ever.

“I have clients that are creating alliances with academic centers around the country,” she said. “You have to be able to understand the importance of that, and you have to be able to make those deals happen.”

Knowlton said the job has gotten tougher as the federal government and commercial insurers push hospitals to deliver more outpatient care and avoid overusing their emergency rooms — all of which can reduce revenue.

“You want a CEO who is completely committed to the highest level of quality, completely supportive of all the doctors that serve the hospital and who is very sensitive to the bottom line while remaining sensitive to community interests,” he said. “It’s a pretty tall order and these people you are seeking are very talented people indeed.”

Who don’t come cheap.

People with these skills are in demand in other industries, which drives up salaries, Knowlton said.

“(A health care CEO) needs financial, legal and regulatory skills, and also the political skills to walk your way through the political mine fields that surround health care today,” he said.

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