Bonuses Still Tied to Better Financials

Quality-of-care performance means more to CEO paychecks at some for-profit hospital companies than at others.

Among the five largest publicly traded systems, Tenet Healthcare Corp. and HCA go farthest in tying executive pay to quality-of-care measures. Still, use of quality incentives—the cash awards that companies reserve for top operational and strategic priorities and that can double an executive's salary—is uneven. At systems that explicitly pay executives based on quality, the weight given to incentives varies from 15% to 25%. Measures of performance used range from those indirectly related to quality, such as employee turnover, to those widely acknowledged as central, such as rates of fatal healthcare-associated infections.

But for an industry plagued with inconsistent patient safety and outcomes, healthcare has been slow to focus top executives' attention on quality by using performance-pay incentives. This is evident in compensation of the publicly traded health systems, which operate 1 in 10 U.S. hospitals and saw 3.8 million admissions last year.

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Source: Modern Healthcare