@KaBoom - It does kind of sound like a waste to have someone who is trained to treat patients dealing with administrative duties. But just imagine for a minute if say, a plumber was in charge of running the hospital. Or a doctor was in charge of a manufacturing plant. Neither of those would make sense!
It's very important for a chief medical officer to have first hand knowledge of all the things that go on at the hospital so they know how to run it. Also some people just enjoy administrative duties more than hands on patient care.
The chief medical officer salary is also quite high so I can understand why a doctor might choose to take the job.