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CEO Incentive Pay Gets a Makeover

Philip Betbeze, for HealthLeaders Media, September 20, 2013

Being measured is nothing new for top healthcare leaders, but for many, renewed board focus on the future means that leaders are being measured based on an increasingly complex conglomeration of performance targets.

Measures and metrics are starting to better define healthcare success, and that's a good thing. It's all part of being more accountable about costs and waste in an industry that's infamous for both. But that measurement isn't just for reforming wasteful processes or measuring patient compliance or satisfaction anymore: Now it's right in the middle of the C-suite.

That means more of your compensation is at risk, or as is said, 'dependent' on these measures. Where it gets interesting is the kinds of new measures that are being introduced by active boards around the country that determine more and more of compensation.

Being measured is nothing new for top leadership, but what they're being measured on is changing rapidly, according to Andrew Chastain, managing director of the southeast region and vice chairman of the board at Witt/Kieffer, a well-known healthcare executive search and consulting firm.

Those who would like to see healthcare emulate other industries in terms of rigor around performance targets are getting their wish.

"It used to be that incentive compensation was around the financials and it defined quality as patient satisfaction," he says. "Now it's literal outcomes."

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3 comments on "CEO Incentive Pay Gets a Makeover"


Edward Reed (9/20/2013 at 2:13 PM)
The idea of an BONUS is appalling in this health care atmosphere. Everyone is expected to sacrifice (patients and staff) except the ones who can do with less and not sacrifice anything. A simple definition of Bonus is>something in addtion to what is expected. Why should a CEO/CFO expect something is addition to what is expected. They are being payed like everyone else. They simply are doing what they are hired for. Like the RN, LPN, CNA and other health care workers. I know>>they think they deserve it!!!

bettynoyes (9/20/2013 at 1:46 PM)
I see tremendous ramification of this with the managers ability to lead each department. That skill set is often lacking

bob sigmond (9/20/2013 at 1:25 PM)
How about providing other incentives, instead of or beyond financial incentives? Like more time off for further study, support for greater impact and involvement in local, state and national health policy, etc. Some of the financial incentives are becoming embarrassing