Changing Roles and Skill Sets for Chief Medical Officers

By Martha Sonnenberg, MD, MS
June 19, 2018

CMOs must acquire leadership skills to direct hospitals and systems. Here, the author reviews their changing responsibilities in today's complex health care environment. 

There is a sea change occurring in American hospitals and health care organizations. We are witnessing a radically changing health care environment in which hospitals and physicians are scrambling for a diminishing piece of the reimbursement pie, as the fee-for-service model of reimbursement gives way to the value-based model.

Hospitals and physicians need alignment of their goals to create safe and high-quality care at lower cost. It has fallen primarily to the CMO to forge this alliance.

Patients and payers, as well as state and federal governments, are demanding improved quality and safety, and cost containment. In this environment, the traditional hospital organization, as well as organized medical staffs, based as they are in a traditional autonomous role for physicians, are struggling to provide and sustain responsible quality and cost-effective care to patients.

Given the nature of these changes, hospitals and physicians find it increasingly difficult to function efficiently as separate entities. Hospitals and physicians need alignment of their goals to create safe and high-quality care at lower cost. It has fallen primarily to the chief medical officer to forge this alliance, to form a meaningful and operational liaison between hospital administrators and physicians.

The Current Role of the CMO

It is the CMO who must lead the necessary culture change from that of the autonomous physician to that of physicians as members of a health care team.

The CMO must spearhead physician acceptance of transparent performance improvement metrics and of working in partnership with nurses and case managers.

The CMO must ensure that physicians take steps to decrease variation in practice, leading to compliance with best practice guidelines and to decrease the overall length of stay in hospitals. In so doing, the CMO promotes coordination of patient care throughout the hospital experience and during the post-discharge phase.

The chief medical officer provides an integrating force linking all aspects of hospital care:

  • Utilization
  • Quality and Safety
  • Credentialing
  • Physician practice evaluation (see Illustration 1)

This integrating role is required regardless of the type of organizational model, be it a small community hospital or large health system. The order of organizational complexity may change, but the requirement for a unified and integrated strategic leadership does not. The CMO translates administrative imperatives to the medical staff and provides a clinical perspective to administrative vision and strategy.

ILLUSTRATION 1: THE CMO PROVIDES AN INTEGRATING FORCE, LINKING ALL ASPECTS OF HOSPITAL CARE

cmo ill 1


Without a CMO, hospitals are poorly equipped to address the inherent conflicts between autonomous physicians and hospital goals. Although much literature has been written to address how best to leverage the relationship of physicians to hospital goals, the essence of the issue is that such alignment requires strong and skilled leadership with the authority to achieve accountable performance at all levels.1,2,3

Without alignment, hospitals will be vulnerable to competitive forces, and they will struggle to recoup value-based reimbursement. This will be increasingly true for smaller hospitals, which are at much greater competitive risk than larger institutions.

Indeed, the need for “transformational executives,” including CEOs and CMOs, is now recognized in smaller, and even in rural hospitals.4  This also holds for larger hospitals with more complex organizational structures that need integration. Health care systems moving toward integration and forming accountable care organizations will need a strong and skillful medical leadership structure that includes a skilled CMO.

The Changing Role of the CMO

Historically, the CMO role was neither well-defined nor critical. The CMO role was frequently filled by a senior physician, often as a part-time position, who functioned primarily to influence staff physicians to perform at higher standards and to accept administrative policies.

Many of these CMOs were quite skilled in engaging members of the medical staff; they were physicians who were well-liked and respected by their peers, and who were trusted to represent the medical staff in administrative matters. They facilitated the work of chiefs of staff and department chairs, and focused primarily on medical staff issues such as peer review, credentialing and privileging.

Ultimately, however, even the most skilled were unable to effect sustainable change in physician behavior and in effecting alignment with hospital goals; they rarely had strategic or operational responsibility, let alone accountability.5

Over the past 20 years, the CMO role has evolved far beyond peer review and privileging, to include utilization review, program growth and development, practice acquisition, integrating health systems, and aligning and coordinating ambulatory and inpatient care, technology acquisition and implementation, process improvement, and regulatory compliance, among others. 6,7 (see Illustration 2)

Increasingly, the CMO position is full time. The current CMO’s success and authority lies in accountability for outcomes to the CEO, the governing board or other stakeholders.8 The CMO must demonstrate an ability to deliver with respect to engaging and aligning medical staff, improving performance metrics, improving quality of care and at the same time curtailing costs by more efficient use of resources.

ILLUSTRATION 2: CMO ROLE HAS EXPANDED OVER PAST 20 YEARS

cmo ill 2

To meet the requirements of accountability, today’s CMO must have a skill set that has also evolved.

The Changing Skill Set Required of the CMO

Yesterday’s CMO got by with an engaging personality and a sense of camaraderie with his or her peers. Today’s CMO is encouraged to obtain degrees in business and management, or certification from organizations, such as the American Association for Physician Leadership, that have developed to support and train physician leaders. CMO competency is required in multiple areas:

Understanding organizational structure and function: Above all, the CMO needs a clear understanding of how his or her organization functions currently, and how it may evolve. The CMO should be able to assess where integration is needed to break down clinical or administrative silos, and whether current clinical leadership is adequate to the tasks required. The CMO must be willing to recommend and make necessary changes to improve functioning of the organization.

The CMO should be comfortable with all the moving parts of the organization; he or she must know when and how to align different constituencies within the organizational setting.9

The CMO must be able to bridge institutional silos to achieve results and align operations with clinical effectiveness. CMO partnerships with the chief nursing officer, a vice president of care management, a chief operating officer, and a chief financial officer to get outcomes results, manage projects, develop programs, or execute plans often will be necessary. Similarly, the CMO may need to work with other C-Suite physician leaders, e.g. chief information officer, chief strategy officer, chief marketing officer, or CMOs of regional or affiliated organizations.

The CMO must work with the executive administrative team to develop strategies of sustainability and market success. When the organization is involved in mergers, consolidations or systems integrations, the structural complexity is ratcheted up, and the CMO must be able to work with that additional complexity; the CMO’s involvement will be critical in strategizing a health care system’s successful transition to population health management. (See Illustration 3)

ILLUSTRATION 3: CMO ROLE IN CLINICALLY INTEGRATED ORGANIZATIONAL CONTEXT

In the clinically integrated organization, the CMO must be able to interact with other chief executive leaders, as well as possibly multiple regional CMOs, and strategically direct the integration of ambulatory care, in-patient care, and post-acute care, as well as directing the medical staff leadership at multiple sites.

cmo ill 3

Promoting Leadership: The CMO should provide support for current medical leadership and have the ability to identify and nurture future leaders to ensure sustainable delivery of quality care by the organization.1,3

Many current medical staff leaders have no leadership training — including such basics as how to chair a meeting effectively. The CMO can provide coaching and mentoring, and champion improved communication among medical leaders.

The CMO must be able to show the administration that investment in leadership development is necessary for the organization’s ongoing ability to provide quality care as well as to grow and meet competitive challenges in a sustainable manner.

Facility with IT and analytics: The CMO must have a strong working understanding of metrics and medical analytics. Metrics are the vehicle for transforming organizational vision into reality, and are the most effective form of organizational communication. Metrics are critically important to the functioning of a meaningful ongoing professional practice evaluation (OPPE) process.

A CMO must ensure that data and metrics are accurate, current, well-defined and relevant. If the organization has a chief medical informatics officer (CMIO), the two must work together to institute electronic medical records (EMR) and computerized physician order entry (CPOE) systems that actually work, are user-friendly, and facilitate meaningful communication of medical information.

A CMO/CMIO alliance is powerful and can more successfully get important resources from administration to support performance improvement, quality and safety efforts, and the necessary IT infrastructure for population health management.

Understanding the Importance of Accurate Clinical Documentation: The CMO must have a clear understanding of the importance of accurate clinical documentation within patient medical records. Accurate documentation, along with a utilization review process, is a condition of participation for CMS reimbursement to hospitals.

Understanding the relationship of physician documentation to final coding of the patient’s diagnoses upon discharge increases the ability of hospitals to be appropriately reimbursed for the services provided.

The CMO needs a good understanding of the physician compensation processes, productivity incentive packages and the concept of fair-market value, both for independent and employed physicians and for individuals and groups.

The CMO can steward clinical documentation improvement processes in hospitals, oversee a clinical documentation physician adviser and institute a physician query process to assist physicians in providing accurate documentation; this process will ultimately be a part of an effective EHR program.

Business, Marketing and Legal intelligence: Hospitals and other health care organizations are increasingly vulnerable to a number of federal and state regulations that, if violated, can have serious civil or even criminal repercussions.

The CMO needs a good understanding of the physician compensation processes, productivity incentive packages and the concept of fair-market value, both for independent and employed physicians and for individuals and groups.

This can have significant legal implications — the CMO should be knowledgeable about the Stark laws, or various state law equivalents, prohibiting physician referrals to entities (labs, procedures, consultants) with which they have a financial relationship.

The CMO should be familiar with the federal anti-kickback statute and the dangers of placing hospitals and health care organizations at risk when assigning medical directorships, discounted office space and complex joint ventures that may appear to remunerate physicians, or groups of physicians, for referrals to the organization. 10,11,12 These risks are of particular importance as accountable care organizations become more prominent.13, 14

Similarly, the CMO must be attuned to other legal landmines with regard to the Health Insurance Portability and Accountability Act (HIPAA), the Health Care Quality Improvement Act (HCQIA),15 vulnerability to Recovery Auditor Contracts (RAC) and avoidance of practices that could invoke fraud and abuse enforcement (billing for services that do not meet medical necessity criteria on over billing for services).

Vigilant CMOs can save their organizations from costly fines and legal consequences if they are able to alert the administration when practices appear legally questionable, or might trigger audits.

The CMO can also provide the organization important clinical perspectives on financial decision making with regard to clinical department budgets, purchases of technology or equipment, the acquisition of group practices and other investment opportunities.

Managing Culture Change: As health care institutions and hospitals respond to the changing economic environment, enormous cultural changes are required. For physicians this means the transition from the traditional role of autonomous practitioner in a physician-centered system, to becoming a member of a health care team that focuses on the coordination of care in a patient-centered system.

Physicians must make the transition, in their decision-making process, from relative independence to compliance with order sets, best practice guidelines and evidence-based medicine.

The CMO, as the liaison between medical staff and the organization as a whole, must be able to spearhead necessary culture changes. This requires significant conceptual and interpersonal and communication skills; the CMO must frequently act as a champion of new patterns of physician behavior and lead physicians through change.

This is not an easy task and is one that requires courage and confidence as well as patience, persuasion and perseverance along with a robust diplomatic acumen.16 These are not insignificant skills; trying to effect change with too heavy a hand can backfire and cost the CMO credibility. The CMO must be able to use his or her power of influence, not to force, but to leverage physicians’ capacity for change.

Engagement and Alignment of Physicians: A necessary part of culture change is the engagement and alignment of physicians with the organizational goals. Without the active participation of physicians, including independents, employed, hospitalists, specialists and groups, in providing safe, quality and cost-effective care to patients, the contemporary health care organization cannot succeed.

Consequently, the ability to engage and align physicians to implement the goals of the organization is probably the most important, and possibly the most difficult, work the CMO can do.

The CMO often must overcome a history of negative and dysfunctional relationships among physicians, and between physicians and administration. Knowledge, sensitivity and understanding of organizational history will be important in moving beyond dysfunction to engagement.

The key skill is the CMO’s ability to gain the trust of the various participants, to demonstrate honesty in communication and integrity in interactions. The CMO’s position alone will not engage physicians, nor will likability or popularity suffice. This task requires that the CMO be able to leverage influence into changed physician behavior demonstrated by improved performance metrics.1

Further, once physicians are engaged, and they are committed to performing their jobs well, they still must be aligned with organizational goals. Alignment, beyond engagement allows people to work together to maximize organizational success.8 Alignment of physicians, and indeed of all employees, is what ultimately allows the organization to realize its strategic vision and move forward in a sustainable manner.

The CMO is, ultimately, like the orchestra conductor: Without that role, we may have many expert performers, and a beautifully written score, but we do not have the symphonic music that delights the listener.

The CMO’s role is no longer a luxury, but a necessity for the successful functioning of today’s hospitals and health care organizations. 

Martha Sonnenberg, MD, MS, is former CMO of Brotman Medical Center in Culver City, California, and currently works as an independent consultant in areas of physician leadership, physician alignment, and quality and safety. This article was originally published by the American Association for Physician Leadership in January 2015. 

REFERENCES

  1. Beeson S, Engaging Physicians: A Manual to Physician Partnership, Pensacola, Fla.: Firestarter Publishing, 2009.
  2. Makary M, Unaccountable: What Hospitals Won’t Tell you and How Transparency Can Revolutionize Health Care, New York: Bloomsbury Press, 2012.
  3. Reynolds S, Prescription for Lasting Success: Leadership Strategies to Diagnose Problems and Transform Your Organization, Hoboken, NJ: John Wiley and Sons, Inc., 2012.
  4. Nelson B, Small hospitals can lure transformational executives, Hospitals and Health Networks Daily, November 21, 2013,
  5. Kain D and Myers A, Chief medical officers—past, present, and future, Tyler and Company Tyler’s Tidbits, Summer, 2013.
  6. Runy L, The evolving role of the CMO, Hospitals and Health Networks, 83(1):27-33, Jan. 2009.
  7. Coile R, Physician executives in the 21st century: new realities, roles and responsibilities, Physician Executive Journal, 25(5): 8-13, Sept/Oct 1999.
  8. Kraines G, Accountability Leadership: How to Strengthen Productivity Through Sound Managerial Leadership, Pompton Plains, NJ: Career Press, Inc., 2001.
  9. A Chartis Group Whitepaper, The art and science of execution, The Chartis Group, Fall 2004.
  10. Daniel J and Newby M, Legal and financial considerations, Presentation ACPE conference on Integrated Health Systems, Annual Meeting and Spring Institute, San Francisco, Ca, May, 2012
  11. Watnik R, Antikickback versus Stark: what’s the difference?, Healthcare Financial Management, 54(3): 66-7, Mar. 2000.
  12. United States Department of Justice, Justice News, November 9, 2010.
  13. Zismer D, Integrated health systems design: if you’re heading there, it’s best to have a map, The Governance Institute, May 2009.
  14. Baicker K, Levy H, Coordination versus competition in health care reform, N Engl J Med, 369(9):789-91, Aug. 29, 2013.
  15. Hurney T, Jones R, and others, A practical analysis of HCQIA immunity, In-House Defense Quarterly, Fall 2009.
  16. Larkin H, CMO: Influencer in chief, Hospitals and Health Networks, March, 2012.

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