Chief Executive Officers’ Perspectives on Characteristics and Conditions Associated with Hospital Financial Distress and Risk of Closure

Previous research into hospital closures has been unable to identify causal factors in advance. Twelve experienced hospital chief executive officers were interviewed using a semi-structured questionnaire to identify tractable and intractable factors associated with hospital financial distress and risk of closure and to learn how CEO assess and prioritize these factors. Results were coded and analyzed using a grounded theory approach. Five primary themes emerged: 1. Intractable and tractable factors are highly interrelated and are addressed through systems thinking. 2. Intractable issues of local context are among the most significant determinants of hospital viability. 3. Physician culture issues are becoming more critical for hospitals. 4. Unprecedented continuing rates of disruptive change require increasing learning, adaptation, and innovation by hospital CEOs to succeed. 5. Effective governance, leadership, and community support may help some vulnerable hospitals forestall financial distress and closure for the short- to mid-term future but may not ensure long-term survival. The data revealed that CEOs are more comfortable working in the realm of tractable factors day-to-day. They are advised to extend their view to incorporate the realities of intractable factors in a longer term planning horizon in order to appropriately address the viability and sustainability of their organizations