Health Policy 79 (2006) 24–34

Leadership and priority setting:

The perspective of hospital CEOs
David Reeleder a,∗ , Vivek Goel a , Peter A. Singer b , Douglas K. Martin c
a Department of Health Policy, Management and Evaluation, Faculty of Medicine, University of Toronto, Health Sciences Building,
155 College Street, Suite 425, Toronto, Ont., Canada M5T 3M6
b Department of Medicine and the Joint Centre for Bioethics, University of Toronto, Toronto, Ont., Canada
c Department of Health Policy, Management and Evaluation and the Joint Centre for Bioethics,

University of Toronto, Toronto, Ont., Canada

Abstract

The role of leadership in health care priority setting remains largely unexplored. While the management leadership literature has
grown rapidly, the growing literature on priority setting in health care has looked in other directions to improve priority setting
practices—to health economics and ethical approaches. Consequently, potential for improvement in hospital priority setting
practices may be overlooked. A qualitative study involving interviews with 46 Ontario hospital CEOs was done to describe the
role of leadership in priority setting through the perspective of hospital leaders. For the first time, we report a framework of
leadership domains including vision, alignment, relationships, values and process to facilitate priority setting practices in health
services’ organizations. We believe this fledgling framework forms the basis for the sharing of good leadership practices for
health reform. It also provides a leadership guide for decision makers to improve the quality of their leadership, and in so doing,
we believe, the fairness of their priority setting.
© 2005 Elsevier Ireland Ltd. All rights reserved.

Keywords: Priority setting; Hospitals; Leadership; Leadership guide; Accountability for reasonableness

1. Background to improve their practices in an increasingly complex

The role of leadership in healthcare priority set-
ting remains largely unexplored. Simultaneously, the
management literature on leadership has grown sub-
stantially, as business leaders have required new models
∗ Corresponding author. Tel.: +1 416 484 6004;
fax: +1 416 212 2869.
E-mail address: david.reeleder@utoronto.ca (D. Reeleder).
knowledge-based economy [1,2].
The growing priority setting literature has empha-
sized the role of evidence-based medicine and health
economics and the process of decision making and
under-emphasized the importance of leadership [3–6].
As hospitals everywhere are struggling to fulfill mis-
sion and meet growing patient demand while keeping
within their funding limits there is scant empirical data
describing the contributions of leadership to priority

0168-8510/$ – see front matter © 2005 Elsevier Ireland Ltd. All rights reserved.
doi:10.1016/j.healthpol.2005.11.009
 D. Reeleder et al. / Health Policy 79 (2006) 24–34 25

setting [7–9]. A clearer understanding of how priority
setting in health services could be improved through
effective leadership therefore has not been realized.
Leadership has been described as a process whereby
an individual influences a group of individuals to
achieve a common goal [1]. The science of leader-
ship is elusive and fragmented [10], and many framing
approaches have been brought forward to describe lead-
ership, ranging from personality traits and values, to
group processes, influence and power, to distinctions
between management and leadership, and to situational
and behavioral contingencies. At a broad level the man-
agement leadership literature may be organized into
two perspectives: ‘what leaders do’ and ‘who they are’.
Kotter and coworkers have emphasized ‘what leaders
do’, including the importance of vision, alignment, set-
ting of priorities, relationships and process [11–20].
Others, including Bennis have emphasized ‘who lead-
ers are’, and focused on character traits and values
[21–26].
Priority setting, also known as rationing or resource
allocation, has been defined as the distribution of
resources among competing programs or people, and
occurs at all levels of the health system [27]. Tradi-
tional approaches to priority setting have emphasized
evidence-based medicine and cost-effectiveness analy-
sis. Recent theories of health care priority setting have
emphasized the importance of ethical processes [3,28].
Daniels and Sabin have proposed an ethical framework
for priority setting in health care institutions called
‘accountability for reasonableness’ [Table 1] which has
become a leading international model for ethical deci-
sion making under limited resources [3,4,29,30].
‘Accountability for reasonableness’ is a frame-
work for legitimate and fair priority setting. It pro-
vides four conditions that emphasize transparency and
stakeholder engagement in democratic deliberation.
Leadership has been identified as an enabler of the
enforcement condition in healthcare settings, but the
role of leadership in priority setting has not been
explicitly described [9,31], but seems to hinge on two
points. First, the enforcement condition of A4R sug-
gests that good leadership involves attention to the
ethical aspects of priority setting. Second, leadership
approaches describe a variety of values and behaviors
which align with, and can be viewed as enablers, for
A4R.
While it is commonly understood that executive
leadership influences institutional priority setting [32],
to our knowledge there has been no research describ-
ing how this occurs in practice. In particular, the role
of leadership in priority setting has not been viewed
through the perspective of leaders themselves, to clar-
ify contributions from the vantage point of the chief
organizational decision maker.
The purpose of this study is to describe the role of
leadership in health services priority setting from the
perspective of hospital leaders, and provide a set of
lessons for effective priority setting practices in health
care facilities.
2. Method
2.1. Design
We conducted a qualitative study, involving semi-
structured interviews with Chief Executive Officers of
Ontario hospitals in which we probed their views on
the relationship of leadership to priority setting.
2.2. Setting/sample
With 12 million people, Ontario is the largest
province in Canada. Like the rest of the country, it is
a single payor, predominately publicly funded health
care system with some privately funded services and
products (e.g. dental services, drugs) [9]. There are 152

Table 1
Accountability for reasonableness
Relevance Rationales rest on evidence, reasons and principles that fair-minded parties can agree are relevant to deciding how to
meet the diverse needs of a covered population under necessary resource constraints
Publicity Limit-setting decisions and their rationales must be publicly accessible
Appeals/revision There is a mechanism for challenge and dispute resolution regarding limit-setting decisions, including the
opportunity for revising decisions in light of further evidence or arguments
Enforcement There is either a voluntary or public regulation of the process to ensure that the first three conditions are met
26 D. Reeleder et al. / Health Policy 79 (2006) 24–34
hospitals in Ontario, comprising a broad range of teach-
ing, community and specialized, and rural and northern
facilities. Each hospital has a CEO leader, with a report-
ing relationship to an independent, voluntary board.
A purposeful sampling strategy was utilized in which
we elicited the views of CEOs from a blend of facili-
ties of different sizes and types. We stopped enrolling
new participants when ‘theoretical’ saturation had been
reached – i.e. when no new themes appeared in suc-
cessive interviews. We conducted interviews with 46
CEOs between February 2003 and February 2004. The
average number of beds reported for the CEO’s 46
Ontario hospitals was 395 (28–1600 beds). The average
reported hospital budget was US$ 155 million ($Cdn
6.5–850 million).
2.3. Data collection
One of us (DR) asked open-ended questions, pur-
sued emerging themes, and sought clarification where
necessary. Exploratory interviews emphasized the pri-
ority setting activities of the CEOs’ institutions. How-
ever, it became quickly clear that the theme of leader-
ship was foremost on the minds of our participants.
Therefore, as is traditional in qualitative research,
we refocused our questions in light of these findings
(Table 2). All interviews were audiotaped, transcribed
and analyzed.
2.4. Data analysis
Analysis of the data consisted of a modified the-
matic analysis organized into three phases: open, axial
and selective coding [33]. In open coding, the data was
read and then segmented by identifying parts of data
that related to an idea (e.g. leadership, values). Units
of text were underlined, with descriptive notes writ-
ten into margins of the transcripts, and placed into an
electronic spreadsheet to facilitate viewing and summa-
rization. In axial coding, concepts were organized into
overarching themes (e.g. alignment) according to per-
ceived importance, which were based on prevalence,
consistency of responses and decision makers’ empha-
sis. Finally, in selective coding, descriptions of the
themes were developed using the decision makers’ own
words.
We addressed the validity of our findings in five
ways. First, we interviewed a large number of hos-
Table 2
Interview guide
Preliminary questionnaire checklist
What are your priority setting goals?
What is fair priority setting and how do you accomplish this?
How do you set priorities? How do you operationalize priority
setting?
What role do stakeholders play in the priority setting process?
What are barriers for effective priority setting?
How do you meet the conditions of A4R—relevance, publicity,
appeals/revision and enforcement?
What is the role of leadership in priority setting?
What is the role of technology in priority setting? What role did
SARS play in priority setting?
[5pt] Final questionnaire checklist
How are priorities set in your institution?
How do you achieve fair priority setting?
What is the role of leadership in priority setting?
What values are important to you in context of priority setting?
Describe the importance of collaborative planning?
What is your leadership style?
Describe the tensions between physician and administrative
leaders?
What is the relationship between leadership, management and
governance?
How would you evaluate the quality of your leadership?
pital CEOs within the health system from which we
obtained diversity and comprehensiveness of views.
Second, the principal researcher worked with a second
senior researcher in developing a coding framework.
Third, interim results were presented in several forums
and scholarly exchanges to enhance ‘reflexivity’ and
ensure that prior assumptions, experience and personal
bias were acknowledged and examined. Fourth, all
research activities were rigorously documented to per-
mit a critical appraisal of the methods. Finally, the draft
framework was distributed to participants who verified
the verisimilitude of the findings in light of their expe-
rience and the reasonableness of the interpretations in
light of their own interview.
2.5. Research ethics
Approval was obtained from the University of
Toronto Research Ethics Board. Written informed con-
sent was obtained from each individual before inter-
view. All raw data were protected as confidential and
available only to the research team. No individuals have
been identified in dissemination, without their explicit
agreement.
 D. Reeleder et al. / Health Policy 79 (2006) 24–34
3. Results
In this section, we describe our participants’ views
and have included verbatim quotes to illustrate. The
CEOs in our study reported a strong overall relation-
ship between leadership and priority setting, “I think
by definition, leadership is priority setting” and “lead-
ership plays a significant role in relation to priority
setting”.
Leaders described some distinctions between lead-
ership and management, with the former bringing “a
sense of direction to the overall organization, a com-
mon vision and a common direction”, while manage-
ment was more concerned with “operational issues”,
“efficiency and effectiveness” and “implementing the
day to day activities that support the mission and val-
ues of the organization”. Another CEO said, “I would
like to think that my board are the governors and
they rely on my leadership, and I rely on my staff to
manage things. So it’s a hierarchy of complexity, of
thinking”.
Participants pointed out that leadership may reside
in all levels of the organization, but that the CEO has
a distinctive role to play in relation to priority set-
ting in five specific areas: fostering a vision, creating
alignment, developing relationships, living values and
establishing an effective process by which internal and
external stakeholders can abide [Table 3].
3.1. Foster vision
CEOs emphasized in priority setting the need for a
compelling, shared vision to mobilize internal stake-
holders in a common direction, to set boundaries or
limitations on what was feasible, to create a vision for
alignment, to set an agenda for efficiencies and consol-
idations, and to provide a basis for the living of shared
values. One leader said that “as a leader you have to
have a vision and translate that vision to the organiza-
tion and create some meaning so people will go in a
certain direction”.
Leaders emphasized the importance for priority set-
ting of fostering or nurturing a vision among the local
institution and various stakeholders so that the vision
was shared or aligned. Change management strategies,
education and communications were described as vehi-
cles to foster this uptake. One participant said his task
was a “massive management process in the hospital,
27
both internally and externally of—not selling, but com-
municating the vision”.
A CEO distinguished between the fostering of a
vision for the future and the “setting of priorities around
reducing or constraining resources, and trying to deter-
mine what will survive and what won’t survive in a
rationing environment”. A participant said “I’ll be hon-
est with you. I think there are times when people lose
sight of the longer term because they’re just so wrapped
up in the pressures of the day to day”.
CEOs stressed the importance of setting boundaries
around what was feasible. In constrained fiscal envi-
ronments it was not possible “to be all things to all
people”, it was necessary to “create focus within the
organization”. A CEO said “you’ve got to focus in on
your core programs and services that are the basis of
what you do”.
Several participants described the importance for
alignment of fostering a vision. A CEO said her vision
was “to be a facilitator of a network of care and service
for people, not that we’re delivering all ourselves, but
that we’re working with others to deliver”.
Visioning facilitates priority setting in helping set
the agenda for consolidation, efficiencies and ser-
vice reengineering. A participant said she is lead-
ing “realignment away from a site model to a sys-
tems model . . . surgery at one site would operate
on surgery from another site. They weren’t working
together under a common leadership to look at consis-
tencies, standardization, best practice, realignment of
resources”.
A vision provides a basis for the living of shared
values. Set and promulgated in an open manner an
inclusive vision promotes these values. One leader said
“we’ve set out what our future is, and where we think
that’s headed. Everybody’s agreed on that. And now it’s
a very open and participatory and transparent process”.
3.2. Create alignment
In setting priorities, CEOs said a vital role for lead-
ership was the creation of alignment. A participant
said “when I say alignment, I mean skills culture,
resources, physical facilities, and just people’s view
of what’s important”. Another CEO said “going into
this exercise of setting priorities we need a very, very
strong alignment between the community, the board,
the senior team and the medical leadership. And we
28 D. Reeleder et al. / Health Policy 79 (2006) 24–34

Table 3
Leadership practices and benefits
Domain Leadership practices for priority setting Benefits
Foster vision Determine vision Mobilize stakeholders in common direction
Apply strategic planning Create meaning
Use change management strategies, education and communications Enhance feasibility
Do not lose sight of long-term time horizon Create alignment
Focus on core programs Improve services
Emphasize alignment Improve efficiencies
Focus on key values
Create alignment Develop shared institutional understanding of vision, values and roles Enhance affordability
Ensure ‘power triangle’ in balance Enhance fairness
Align stakeholders Facilitate service integration
Engage private sector and governments Improve ‘buy in’
Collaborate in networks Shared resources
Manage networks Creates innovation
Establish trust Social capital
Retain autonomy
Develop relationships Physician: involve in decision making Enhances services to serve public
Physician: establish teams Provides balanced perspectives
Board: respectful relationship Enhances inclusivity
Board: provide context, choices and process Increases organizational performance
Staff: delegation Avoids staff ‘push back’
Staff: create trusting milieu Increases revenues
Funder: program advocacy
Live values Transparency: reveal agenda Fairness
Evidence: use criteria and relevant information Self-evaluation
Inclusivity: involve relevant stakeholders Cooperation
Trust: establish trust in relationships Affordability
Honesty: manifest honesty in priority setting Social capital
Good conduct
Virtue
Establish process Promotes vision, values and criteria Fairness
Enhance planning Consensus
Engage stakeholders Performance
Align programs Shared direction
Enhance communications Quality
Use challenging goals Alignment
Measure progress Accountability
Apply clinical program management
Frame choices
Clarify leadership style

need a decision making model that allows us to do this
in a very open and transparent way”.
Leaders expressed a need for alignment with other
hospitals, their communities, governments and private
sector partnerships to drive priority setting. Alignment
is concerned with ensuring shared directions, plans and
values, and in creating networks of interest to optimize
service delivery and in meeting need through redistri-
bution of limited resources.
Many times these aligned relationships took the
form of networks of providers, either formal or infor-
mal, formed to deal with common service access, con-
solidation, or emergency issues, leveraging member
resources and geographical distribution. One partici-
pant said in reference to the Ontario SARS epidemic,
that there was “nothing like the threat of an out of
control infectious and communicable disease to bring
hospitals and the system together . . . a call for people
 D. Reeleder et al. / Health Policy 79 (2006) 24–34
to really be very open and transparent and honest with
each other and to try to work collaboratively together”.
Another CEO from a large children’s hospital said
“strategically and for the good of the province—we
needed to form a collaborative network, of all the chil-
dren’s programs in the province, and we formed what’s
known as the Ontario Child Health Network”. A CEO
described a network of hospitals where “we’ve got a
proposal to put a joint, electronic record . . . thereby
saving on traveling time and physician availability”.
Another participant said “vertical”, rather than “hori-
zontal integration” of provider facilities was important,
“there’s more to be gained by sharing with the nursing
home in town, or with the mental health agency in town
. . . than there would be in sharing with a hospital three
hours away”.
With a partnership or alignment among hospitals,
trust is key. A CEO of a hospital about to ally with
another, said “In a small hospital there’s the threat of
takeover. And so partnership is very much about being
able to trust as you make yourself vulnerable, know that
you’re not going to be taken advantage of”. Sometimes
the alliance is not necessarily the best for the institution
but, “for the good of the health system we’re going to
do something that is not going to bring any advantage
to us as an organization”.
3.3. Develop relationships
CEOs described a set of complex, interrelated and
specific relationships with their boards, physicians,
staff, communities and patients, funders and other
providers that facilitate priority setting. A participant
said, “frankly good leadership in this industry is all
about relationships, whether that’s dealing with doc-
tors or dealing with the government”. A CEO described
the importance of working collaboratively, “Big part
of my life is collaboration. Working with other hospi-
tals, within the organization . . . to make sure that we’re
properly integrated to best serve the taxpayers and the
patients”.
An effective leader needs to cultivate a respectful
relationship with her board, develop a set of ground
rules or processes for which priority setting decisions
are made, provide context, choices and information
to enable the board to make informed decisions, and
encourage the board to provide public input into prior-
ity setting processes. A participant described his role,
29
“to pose choices in a form in which the board can exer-
cise policy setting responsibility without getting into
micromanagement”. Another said, “you have to create
the context for them so that they know the options”.
Physicians play a critical role in allocation of
resources, and it is vital that the leader is able to enlist
their cooperation in her priority setting pursuit. As one
CEO put it bluntly, “you have a bunch of people who
are not our employees who spend most of our money
through their decisions”. Another CEO said, “My phi-
losophy has always been to help the doctors help the
patients”.
Participants pointed to the importance of CEO lead-
ership in balancing the “power triangle” between physi-
cians, administration and the board, of involving physi-
cians in decision making and making them feel valued,
of establishing teams, of trust, and of using an inclusive
process to offset a “squeaky wheel” syndrome in which
powerful physicians garner disproportionate levels of
resources. A CEO said of the triangle, “as long as that’s
in balance, you can work . . . if the board only listens
to doctors, there is difficulty in setting priorities based
on the needs of whole organization”.
Leaders need to develop processes to understand
and engage the community and patients while seek-
ing alignment, especially when priority setting leads to
rationing or consolidation of existing services. There
was a recognition by several that identifying and meet-
ing needs of the population was difficult, “that’s some-
thing we’re poor at, going out and really understanding
needs . . . you almost need to do some kind of public
poll that lets the community speak about their needs, as
opposed to let us deciding that four Operating Rooms
will go to hips this year, and six Operating Rooms will
go to cancer”. A CEO also said it was valuable to bring
in stakeholders “knowledgeable about particular top-
ics, who represent consumers who have an interest”. It
was also important to respect inclusivity “I knew this
was an issue for aboriginals because they have cultural
things like burning sweet grass, that are different and
their needs would not necessarily be represented by a
group which was non-native”.
Leaders emphasized the importance of motivation
and mobilization of the workforce to meet and set pri-
orities through empowerment and delegation, balanced
expectations, alignment, teams and the development
of respectful environments characterized by trust and
honesty. Leaders work however within the constraints
30 D. Reeleder et al. / Health Policy 79 (2006) 24–34
of a complex milieu of professional associations and
unions, limiting funds and flexibility. A CEO empha-
sized the need for balance in priority setting, “I want to
get out there that it’s a balancing act. Good managers
have high levels of patient satisfaction, and high levels
of employee satisfaction—while at the same time are
managing to get their finances balanced”.
Leaders described the importance of managing the
relationship with their primary funders, the provincial
ministry of health. A participant said, “one of the great
aspects of leadership is just advocacy . . . your ability
to employ the right tactics in your government rela-
tion strategies, and in your communities to ensure an
awareness of needs, that programs are appropriately
positioned for consideration, and that we’re not forgot-
ten in the fray of competition”.
3.4. Live values
Leaders emphasized that leadership in priority set-
ting was about connecting transparency, evidence,
inclusivity, trust and honesty with conduct, and with
embodying values in approaches and self-evaluations.
A CEO said that “increasingly thoughtful leaders are
much more focused not on what they do, what job they
do and what tasks they take on, as much as who they
are, what values they embody, what priorities they set”.
Leaders are transparent about their agenda and
expect reasons or rationales for sharing decision. A
CEO said, “with transparency people understand how
you’re making decisions”. Another said transparency
reinforces trust, “I think when the whole thing is trans-
parent and you do that time after time, then they know
that they’re going to trust you”.
Participants described the importance of relevant
evidence and criteria in their decision making. A CEO
said, “We try to be evidence based. I think we try to be
criteria driven. But at the end of the day you use some
common sense and pragmatism. And marry up against
your criteria”.
Leaders said they valued multiple stakeholders in
collaborative planning, but admitted challenges in
engaging the public. A CEO said “getting proper rep-
resentation is cumbersome, but we place a very high
value on the involvement of the consumer and family
members”. Leaders said that involving the ‘right’ stake-
holder was important in priority setting, and that it was
important to consider the type of activity engaged in.
For example, “inclusivity is a question of who should
be included, and how they should be included”.
Participants emphasized the importance of trust in
priority setting. A CEO said ‘trust’ facilitated tough
decisions he has made, “Trust is absolutely paramount
. . .. So you have to be careful and cognizant of how
you make decisions and why people express the views
they do. Respecting each other’s positions develops
trust”.
Leaders said ‘honesty’ was essential for leader-
ship, describing it as “having the ability, willingness,
courage, to sort out reality from perception . . . having
the courage to say, there are more ways to solve this
thing than just throwing money at it”.
3.5. Establish process
A CEO said, leadership in the context of priority
setting “is a process”. Another participant said his job
“as a leader is to ensure that processes are set up so
that things are done ethically and when they’re not, or
people in the organization feel they’re not, there’s got
to be mechanisms where people can come forward and
express their concern”. Leaders reported that at the end
of the day they “carry the can”, and were responsible for
making the “tough decisions”, when consensus cannot
be reached.
CEOs reported establishing strategic plans, annual
operating plans, and frameworks for review of shorter
term rationing decisions. For example, a participant
described working from a “blueprint called our strate-
gic directions, which are set by the board. It’s a rolling
three year plan where there are major reviews of
directions—it migrates down through the organiza-
tion to guide operational priority setting in respect to
resource allocation”.
A participant described their priority setting as fair,
“because we are driven by a vision and values that we
reflect on. We have strategic directions that the board
has identified”. Another said, “everybody agrees up
front to the criteria . . . people understand the rules,
and know who’s going to make the final decision”.
Participants said it was important to engage a vari-
ety of stakeholders in priority setting. A decision maker
said establishing a fair process helps ensure that every-
body’s voice is heard, “before it was whoever had the
most clout, the most weight, the most voice, the most
aggressive”.
 D. Reeleder et al. / Health Policy 79 (2006) 24–34
Alignment of program rationing contributes to
improved process and helps avoid criticism. For exam-
ple, a CEO discussed the need for alignment, pointing
out instances when other hospitals, “never asked what
the impact of cutting open heart surgery would have on
us . . . so there was very little cooperation”.
Several CEOs emphasized the importance of com-
munications to the public and the media within a pri-
ority setting context. A CEO said, “we’re been very
public. Everyone understands the rules and we nego-
tiate the rules openly before we start priority set-
ting”. In describing guidelines for dealing with the
media, a CEO said “state the facts as they are. Timely
responses are important. If they don’t get it from you,
they’ll get it from somebody else. It may be the wrong
information. We need to be seen to be responsible
corporate citizens and the community has a right to
know”.
In evaluating the achievement of goals CEOs
emphasized measurement and the need for challenging
goals. Further, participants pointed to clinical program
management or quality team approaches for better
management of resources, improvement in physician
and management relationships, and integrated atten-
tion to outcomes. A CEO also said, “I think the most
fundamental responsibility of leadership is to propose
clear choices, and to frame questions in a way where a
choice can be made”.
Participants described five leadership styles, helpful
in effective priority setting. A CEO described a ‘facil-
itative’ role, “to facilitate competing forces at work
in a hospital . . . both between disciplines who were
very much focused on trying to protect professional turf
around scope of practice, and to mediate between inter-
preting community needs and trying to get providers to
be more community population needs driven”. Another
CEO described her style as ‘participative’, “Very much
focused on relationship building, walking the talk, par-
ticularly around corporate values, and very visible”.
Some CEOs said they were ‘results oriented’, “I try to
push the envelope, and I’m very definite. And I give
a clear direction. So people are not left wondering
what the direction is, what the future is”. Some par-
ticipants said their style was ‘visionary’. Finally, some
decision makers said their style was ‘adaptive’, say-
ing “a good leader is going to be different things in
different times depending on what the circumstances
warrant”.
31
4. Discussion
This study makes four contributions to knowledge
regarding the relationship of leadership to priority set-
ting. First, we have identified leadership domains in
the context of priority setting from the perspective
of health services leaders. Second, we have described
leadership practices reported by heath services lead-
ers in their organizations. Third, we have described
leadership styles in priority setting from the perspec-
tive of leaders. Fourth, we report a fledgling frame-
work to guide decision makers or academics in priority
setting.
First, we have organized CEOs’ views about lead-
ership in priority setting into a framework of five
interrelated domains, involving vision, alignment, rela-
tionships, values and process. These domains have
been identified by others—Kotter and coworkers have
discussed fostering vision, creating alignment, devel-
oping relationships and establishing processes; Bennis
and Goleman have discussed the importance of val-
ues; Daniels and Sabin have discussed the relationship
between priority setting and ethical processes. For the
first time however, we have provided empirical data
to describe the relationship of leadership to health ser-
vices priority setting from the perspective of the chief
organizational decision maker.
While the current management literature portrays
leadership as a broad based characteristic within orga-
nizations [1,2], not limited to the CEO who never-
theless is empowered as de facto leader through for-
mal rank and power to influence priority setting, it
points to distinctions between management and leader-
ship [1,11,12], with management providing order and
consistency to organizations and leadership providing
change and movement.
Our study of priority setting in health services
organizations helps clarify the distinctions between
management and leadership, but also points out com-
mon ground. While leadership is partly about vision
and alignment, unless these enablers can be cultivated
through nurtured relationships, enshrined values and
durable processes, it is debatable whether leaders and
managers in priority setting will achieve their goals of
order and consistency. Additional research is required
to clarify leadership and management good practices,
including what roles middle managers and physicians
play in organizations while supporting CEOs.
32 D. Reeleder et al. / Health Policy 79 (2006) 24–34
Second, CEOs describe a set of approaches for effec-
tive priority setting in their institutions, dependent on
these leadership characteristics. Leaders report their
role in fostering a vision for acceptance by various
communities of interest. However, in order to achieve
this, CEOs need alignment of their internal and external
stakeholders for agreement on goals and ways of meet-
ing them [34,35]. In addition, CEOs engage specific,
but diverse set of complex stakeholder relationships,
each with their own interests and challenges, for a bal-
anced airing of voices and priority setting approaches
[36,37]. By encouraging a values-based culture rooted
in the decision maker’s own character and beliefs,
leaders ensure competing priorities can be discussed
openly, inclusively and honestly, in the context of trust
and good evidence practices. Finally, the CEO estab-
lishes institutional mechanisms for due process in order
to exchange ideas and develop or operationalize goals
[19,20,36], otherwise their vision will lack legitimacy
or moral authority [4].
Third, leaders described five styles to enable prior-
ity setting in their institutions, emphazing facilitative,
participative, results-oriented, visionary and adaptive
styles. A variety of other leadership styles have been
described in the literature, such as directive versus
supportive distinctions [38], task versus relationship
motivated [39], and authoritative versus democratic
[22,23]. From the perspective of leaders interviewed,
they indicated a movement away from hierarchical,
authoritative leadership styles to open collaboration
and stakeholder engagement. However, it is not known
whether actual and self-reported styles are the same,
and the operational impact of leadership style on pri-
ority setting.
Fourth, we report the early makings of a leadership
action plan or guide for decision makers to improve the
quality of their leadership, and in so doing, we believe,
fairness of their priority setting. Priority setting review
sessions could be established between hospital boards
and their CEO leadership, in which CEO actions may
be evaluated against the guide. Current priority setting
issues, or critical areas requiring increased attention in
the future, could be explored. For example, our lead-
ership framework suggests that prior to budget-related
decisions the CEO should ensure that all relevant stake-
holders have been consulted (‘relationships’), that the
decisions make sense in view of the hospital’s mission
and previous decisions (‘alignment’), that decisions
have been brought to the attention of government (‘pro-
cess’ and ‘relationships’) for consideration, and that
decision making is transparent and based on an hon-
est assessment of the facts so promoting good will and
trust in the future (‘values’).
Entrenching cultural change for leadership and fair
priority setting will be required to sustain this health
reform. Leadership self-reporting systems may be con-
sidered in which leaders within institutions report on
their ability to foster collective vision, create alignment
and social capital, nurture relationships with stakehold-
ers, live ethical values and establish fair process. Within
each self-report, leaders could be asked to provide
examples of good practices and areas for improvement.
This assessment need not be limited to leaders, but
could include staff or community stakeholders asked
to comment upon the effectiveness with which their
leaders have fairly connected to them, and the degree to
which self-reinforcing cooperative behaviors have been
generated, citing concrete situations where priority set-
ting has improved as a result. As well, performance
contracts could be established between CEOs and their
boards, using this leadership framework to help facil-
itate effective and fair practices. Finally, government
could take a participatory role by creating incentives
for sharing of leadership and fair practices within the
health system.
4.1. Limitations
Our study has three main limitations. First, this
description of participants’ views on the relationship of
leadership to priority setting is limited by the perspec-
tives of hospital CEOs within a particular health sys-
tem. It may not be fully generalizable to priority setting
or leadership in other contexts such as governments,
regional authorities or health care agencies. However,
the goal of qualitative research is not generalizabil-
ity, but to provide rich description of context-specific
phenomena that have an independent, valuable and sig-
nificant meaning [40]. Second, social desirability bias
was possible in that the views of participants expressed
in these interviews may not have corresponded to what
they actually believed, or did. However, CEOs’ views
were probed, and fulsome examples were provided by
decision makers in elaboration of their responses sug-
gesting what they said matched with what they did.
Third, corroborative evidence of executive leadership
 D. Reeleder et al. / Health Policy 79 (2006) 24–34
was not obtained through in-depth interviews with
board or community stakeholders, or through review
of other relevant information (e.g. board minutes). This
final limitation remains the subject of additional study
relating the leadership role of the CEO in priority set-
ting from the eyes of the board.
5. Conclusions
This study emphasizes the key role leadership plays
in priority setting. We have described, from the per-
spective of leaders in health services organizations, a
framework of five leadership characteristics to facili-
tate priority setting. It is our view that these features
form the basis for sharing of good leadership prac-
tices in hospitals. Further research is required to clarify
leadership and management good practices, to assess
the impact of leadership style and to understand lead-
ership in priority setting from the perspective of the
health services board.
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