Department of Health Services Management, TeMS.C., Islamic Azad University, Tehran, Iran. & Health Economics Policy Research Center, TeMS.C., Islamic Azad University, Tehran, Iran. , sheikhy@iau.ir
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Dear Editor,
Policymakers, managers, and health economists are the stewards of a system in which a substantial share of a population’s health outcomes is closely linked to their foresight. Every decision in this domain can have a direct impact on the satisfaction of healthcare service recipients, the overall performance of the health system, and the quality of life of the population [1, 2]. Ensuring the continuity of this role requires planning for the training and replacement of future leaders; succession readiness (defined as the extent to which a system is prepared to maintain uninterrupted performance during managerial transitions) and succession planning (defined as the structured process of preparing future managers to assume key organizational roles) are key approaches to achieving this objective. This article deliberately adopts succession planning as its central analytical focus.
Succession planning in the health system—across all three levels (operational, middle, and senior)—can be regarded as a strategic policy to ensure the continuity of the system’s core functions [3]. The increasing complexity of healthcare services, together with evolving service delivery environments, rapid technological change—particularly the emerging artificial intelligence revolution—the need for constructive engagement between the health sector and various political, social, economic, and cultural institutions of the country, and the requirement for continuous and equitable responsiveness to changing population needs [4, 5], all necessitate that health systems be equipped with structured mechanisms for identifying, developing, and retaining talented personnel. The absence of such a mechanism increases the risk of disruption in decision-making processes, loss of institutional knowledge, and reduced organizational resilience. Succession planning, at its core, carries profound economic implications.
From the perspective of health economics, succession planning should be regarded as a long-term investment with a high return on investment (ROI), aimed at preserving and strengthening an organization’s managerial and knowledge capacity over time. In this approach, the training of health managers and leaders should not be considered a routine operational cost, but rather a capital investment with positive externalities, with returns realized through reduced costs associated with frequent managerial turnover and the minimization of resource wastage within the system. The effects of succession planning are not confined to organizations alone but extend to society at large. Managerial stability and evidence-based decision-making, enriched by experience, at a macro level, lead to more efficient use of public resources and, consequently, the promotion of equity and social welfare. Furthermore, succession planning can be viewed as a form of organizational insurance that, by creating a pool of capable and primarily young, ready-to-deploy personnel, reduces the risks associated with sudden managerial departures, environmental changes, or socio-political and economic crises. Just as health insurance prevents unpredictable costs for the covered population, the succession planning mechanism likewise prevents hidden costs arising from managerial vacancies in the health system by ensuring leadership continuity. Accordingly, succession planning within the framework of health economics can be considered a long-term strategy with multi-layered human, organizational, and social returns. To more concretely understand the economic dimensions of succession planning in the health system, its consequences in the absence of such planning can be examined through a more realistic scenario.
It may be envisaged that, in the midst of implementing a health provider payment reform program, an experienced manager at a university headquarters—who has for years managed to maintain, as much as possible, a balance between budget constraints and service quality—resigns from their position for various reasons (this event may also occur at the operational level of the health system, including comprehensive health service centers, with varying intensity and consequences). In the absence of the key element of succession planning, the replacement process becomes marked by confusion and delay; routine decisions are postponed, financial commitments become misaligned, and staff motivation is likely to decline. As a result, substantial direct and indirect, as well as both visible and hidden, costs are imposed on the organization. In contrast, when the organization has previously invested in developing potential managers, the transfer of responsibilities takes place without interruption, decision-making continuity is maintained, and trust among staff at different levels, as well as among healthcare service recipients, is sustained. This situation illustrates that, in the logic of health economics, succession planning plays the same role as prevention does in relation to treatment (i.e., lower cost versus more extensive consequences). In other words, succession planning is not merely a managerial policy, but an economic instrument for safeguarding human capital and maintaining the resilience of the health system against potential future shocks. A systematic review has shown that hospital managerial turnover is costly and is associated with short-term declines in productivity and financial performance, increased replacement costs, inefficiencies, and disruptions in decision-making processes [6].
Overall, from a health economics perspective, every managerial decision within the health sector entails an opportunity cost; if optimal investment is not made in training future managers within this ecosystem, a substantial cost will be incurred in the form of lost continuity of effective management in the future, which will ultimately be borne by the state’s limited public resources, and in a more adverse outlook, the health status of various population groups may be significantly affected. It is recommended that the perspective toward managers in health-oriented organizations be transformative and human-centered rather than consumptive and short-term. However, potential limitations in merit-based selection and instability arising from high managerial turnover rates may constrain the realization of such approaches. Undoubtedly, various challenges and barriers lie ahead for health policymakers and decision-makers, which should be identified through scientific analysis and addressed gradually. All hypotheses presented in this paper are preliminary in nature and require rigorous scientific testing and validation; future studies are recommended to develop and expand the literature in this field.
Declarations
Ethical considerations: Not applicable.
Funding: This research was conducted without any financial support.
Conflicts of interest: The authors declare that there is no conflict of interest.
Authors' contributions: Mohammadreza Sheikhy-Chaman: Conceptualization, Writing – review & editing, Final approval.
Consent for publication: Not applicable.
Data availability: Not applicable.
AI deceleration: Not applicable.
Acknowledgments: Not applicable.
Policymakers, managers, and health economists are the stewards of a system in which a substantial share of a population’s health outcomes is closely linked to their foresight. Every decision in this domain can have a direct impact on the satisfaction of healthcare service recipients, the overall performance of the health system, and the quality of life of the population [1, 2]. Ensuring the continuity of this role requires planning for the training and replacement of future leaders; succession readiness (defined as the extent to which a system is prepared to maintain uninterrupted performance during managerial transitions) and succession planning (defined as the structured process of preparing future managers to assume key organizational roles) are key approaches to achieving this objective. This article deliberately adopts succession planning as its central analytical focus.
Succession planning in the health system—across all three levels (operational, middle, and senior)—can be regarded as a strategic policy to ensure the continuity of the system’s core functions [3]. The increasing complexity of healthcare services, together with evolving service delivery environments, rapid technological change—particularly the emerging artificial intelligence revolution—the need for constructive engagement between the health sector and various political, social, economic, and cultural institutions of the country, and the requirement for continuous and equitable responsiveness to changing population needs [4, 5], all necessitate that health systems be equipped with structured mechanisms for identifying, developing, and retaining talented personnel. The absence of such a mechanism increases the risk of disruption in decision-making processes, loss of institutional knowledge, and reduced organizational resilience. Succession planning, at its core, carries profound economic implications.
From the perspective of health economics, succession planning should be regarded as a long-term investment with a high return on investment (ROI), aimed at preserving and strengthening an organization’s managerial and knowledge capacity over time. In this approach, the training of health managers and leaders should not be considered a routine operational cost, but rather a capital investment with positive externalities, with returns realized through reduced costs associated with frequent managerial turnover and the minimization of resource wastage within the system. The effects of succession planning are not confined to organizations alone but extend to society at large. Managerial stability and evidence-based decision-making, enriched by experience, at a macro level, lead to more efficient use of public resources and, consequently, the promotion of equity and social welfare. Furthermore, succession planning can be viewed as a form of organizational insurance that, by creating a pool of capable and primarily young, ready-to-deploy personnel, reduces the risks associated with sudden managerial departures, environmental changes, or socio-political and economic crises. Just as health insurance prevents unpredictable costs for the covered population, the succession planning mechanism likewise prevents hidden costs arising from managerial vacancies in the health system by ensuring leadership continuity. Accordingly, succession planning within the framework of health economics can be considered a long-term strategy with multi-layered human, organizational, and social returns. To more concretely understand the economic dimensions of succession planning in the health system, its consequences in the absence of such planning can be examined through a more realistic scenario.
It may be envisaged that, in the midst of implementing a health provider payment reform program, an experienced manager at a university headquarters—who has for years managed to maintain, as much as possible, a balance between budget constraints and service quality—resigns from their position for various reasons (this event may also occur at the operational level of the health system, including comprehensive health service centers, with varying intensity and consequences). In the absence of the key element of succession planning, the replacement process becomes marked by confusion and delay; routine decisions are postponed, financial commitments become misaligned, and staff motivation is likely to decline. As a result, substantial direct and indirect, as well as both visible and hidden, costs are imposed on the organization. In contrast, when the organization has previously invested in developing potential managers, the transfer of responsibilities takes place without interruption, decision-making continuity is maintained, and trust among staff at different levels, as well as among healthcare service recipients, is sustained. This situation illustrates that, in the logic of health economics, succession planning plays the same role as prevention does in relation to treatment (i.e., lower cost versus more extensive consequences). In other words, succession planning is not merely a managerial policy, but an economic instrument for safeguarding human capital and maintaining the resilience of the health system against potential future shocks. A systematic review has shown that hospital managerial turnover is costly and is associated with short-term declines in productivity and financial performance, increased replacement costs, inefficiencies, and disruptions in decision-making processes [6].
Overall, from a health economics perspective, every managerial decision within the health sector entails an opportunity cost; if optimal investment is not made in training future managers within this ecosystem, a substantial cost will be incurred in the form of lost continuity of effective management in the future, which will ultimately be borne by the state’s limited public resources, and in a more adverse outlook, the health status of various population groups may be significantly affected. It is recommended that the perspective toward managers in health-oriented organizations be transformative and human-centered rather than consumptive and short-term. However, potential limitations in merit-based selection and instability arising from high managerial turnover rates may constrain the realization of such approaches. Undoubtedly, various challenges and barriers lie ahead for health policymakers and decision-makers, which should be identified through scientific analysis and addressed gradually. All hypotheses presented in this paper are preliminary in nature and require rigorous scientific testing and validation; future studies are recommended to develop and expand the literature in this field.
Declarations
Ethical considerations: Not applicable.
Funding: This research was conducted without any financial support.
Conflicts of interest: The authors declare that there is no conflict of interest.
Authors' contributions: Mohammadreza Sheikhy-Chaman: Conceptualization, Writing – review & editing, Final approval.
Consent for publication: Not applicable.
Data availability: Not applicable.
AI deceleration: Not applicable.
Acknowledgments: Not applicable.
Type of Study: Letter to Editor |
Subject:
Health Economics
Received: 2026/04/15 | Accepted: 2026/06/21
Received: 2026/04/15 | Accepted: 2026/06/21
References
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2. Sheikhy-Chaman M, Hoseini Abforosh N, Souresrafil A, Makhtoumi V. Inspiring managers in the Iranian health system; now more than ever: a letter to editor. Tehran University Medical Journal. 2024;81(10):811-3. [In Persian] Available from: https://tumj.tums.ac.ir/article-1-12846-en.html
3. Turner P. Succession planning and leadership development. Talent Management in Healthcare. Palgrave Macmillan, Cham. 2018:157-87. doi: [DOI:10.1007/978-3-319-57888-0_7]
4. Paschoalotto MAC, Lazzari EA, Rocha R, Massuda A, Castro MC. Health systems resilience: is it time to revisit resilience after COVID-19?. Social Science & Medicine. 2023;320:115716. doi: [DOI:10.1016/j.socscimed.2023.115716]
5. Ali O, Abdelbaki W, Shrestha A, Elbasi E, Alryalat MA, Dwivedi YK. A systematic literature review of artificial intelligence in the healthcare sector: benefits, challenges, methodologies, and functionalities. Journal of Innovation & Knowledge. 2023;8(1):100333. doi: [DOI:10.1016/j.jik.2023.100333]
6. Hermes M, Winter V, Wild EM. Predictors and effects of hospital chief executive officer turnover: a systematic review. Health Care Management Review. 2025;50(3):197-210. doi:
https://doi.org/10.1097/HMR.0000000000000441 [DOI:10.1097/hmr.0000000000000441]
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