Healthcare Reform Revs Compensation in the C-Suite

"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," says Fried, an Intelligence Report advisor. "Everybody is going to have to be good at that, or they are not going to survive."

Nearly all respondents (95%) agree completely or agree somewhat that their organizations need more incentives based on clinical quality performance. Dianna Grant, MD, vice president of medical management and chief medical officer of the 169-licensed-bed Advocate Trinity Hospital, which serves southeastern Chicago, says that incentives based on clinical performance are as important as financial measures. "We have demonstrated that if you do the right thing, you are going to make the financial measures," she states. But Grant cautions that finance executives may have a different perspective because, one way or the other, the financial foundation for much of the industry will continue to be based on patient revenue and cost accounting.

Executive skills in flux

The shift to value-based purchasing also is reflected in respondents' appraisals of skills executives need for success in the future. Ability at cost containment and achieving performance top the list of skills that support a non-CEO executive's success both today and in the five-year time frame. Skills deemed to be more in demand in the future will be the ability to optimize results along a continuum of care and the skills in physician alignment.

Now and in the future, chief executives need physician alignment skills, which are considered by 62% of respondents to be among the top three skills needed for a CEO to be successful. The second-most frequently mentioned item—skills at performance metrics—was mentioned by only 39%, which underscores the importance of the top item.

"If you are working in healthcare, obviously the ability to get along with physicians is a pretty important quality," says Paul Hensler, CEO of Kern Medical Center, a 222-bed acute-care county-owned teaching hospital in Bakersfield, Calif. "There is a strategic aspect to alignment: the CEO strategically thinking about the things that result in strong physician alignment for the future. Some of the things that are important for alignment sometimes are not very popular. You are taking people whose training and background is largely independent and trying to get them to come together as a team and work for the common good. The hope is that by building a better institution, their individual welfare is improved."