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C-Suite Compensation Remains Taboo

Karen Minich-Pourshadi, for HealthLeaders Media, December 3, 2012

I contacted 10 of the nation's largest and most prestigious hospitals, and received 10 "No, thank you" responses. Except for unusually transparent organizations, it's definitely not something they want to talk about.

Or even necessarily act on—many healthcare organizations haven't yet made adjustments to their executive compensation models. Yet the shift toward incentivizing executives to meet quality and patient satisfaction goals must take place in the near future in order for true healthcare reform to take hold throughout an organization.

"[Hospital] boards are now weighting incentive goals for the CEO and other members of the team. However, we're not seeing the move away from annual incentive goal-setting; rather, we're seeing the board take an additional interest in how to structure and add in long-term performance planning goals," says Sally LaFond, a senior consultant with Sullivan, Cotter and Associates.

LaFond notes that she is seeing new compensation measures in some healthcare organizations, such as quality, safety, and patient satisfaction being added throughout the C-suite incentive structure. Still, these incentives are being applied annually instead of long-term. 

One organization that is approaching executive compensation with an eye on the future is Cincinnati-based The Christ Hospital, a 555-bed, nonprofit acute care facility with more than 90 outpatient and physician practice locations. The hospital changed its leadership compensation structure five years ago in anticipation of healthcare reform. Instead of targeting only physician compensation plans, however, the organization began making structural changes to how everyone was compensated, starting with the CEO and on down to the rest of the staff.

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