Hospital CEO incentives focus on clinical quality, patient satisfaction

Quality measures not only determine physician compensation but also hospital CEO pay. And among those target goals is patient satisfaction. Nearly three-quarters of healthcare systems include clinical quality measurements in incentive payments for executives, according to a HealthLeaders Media Executive Compensation Survey.

On average, incentives make up 10 percent of CEO pay, with 80 percent consisting of salary and the other 10 percent in retirement and other benefits, HealthLeaders noted. Hospital CEOs listed operating margin (67 percent), patient satisfaction (60 percent), clinical quality (54 percent) and financial efficiency (44 percent) as the four top factors for their current incentive payments.

"Whether it is a big system or a small system or a standalone hospital, we are going to have to be good at tracking performance measures, and tracking how we are performing, and providing incentives for people to achieve the levels that we want to achieve," Jeffrey M. Fried, president and CEO of Beebe Medical Center in Sussex County, Del., said. "Everybody is going to have to be good at that, or they are not going to survive."

Emory Healthcare CEO John Fox similarly pointed to the growing importance of pay for performance and the need for data.

In an interview with Atlanta Journal-Constitution, Fox said that the Georgia health system established an office to look at quality data and changed the incentive compensation philosophy to reflect its quality, safety and service goals. In addition, all of Emory's 600 leaders go through a quality academy, a three-day course focused on quality improvement.

Although the process took several years to roll out, Fox noted, a Quality Acceleration Team, which included up to 70 leaders on it, met twice a month for four hours each session to speed up its mission. Physicians, nursing, lab, pharmacy, finance and information services met to move the needle on quality, which sometimes meant reprioritizing projects.

Fox advised other hospitals, "Make sure you're engaging people and not pounding the table. Pounding the table does not work. People are doing what they're doing because that's the local culture or that's what they've been trained to do."

For more information:
- here's the HealthLeaders article and report (.pdf)
- read the Atlanta Journal-Constitution article

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