The Christ Hospital's board decided to restructure its compensation plan to incent quality outcomes and patient service, along with strong financial performance. The specific measures were based on annually revised critical success factors and metrics tied to the incentive plan for the executive team.
"Our value chain begins with having executive leadership define our strategy and goals and setting our incentives around it. Having that information also helps us attract great leaders, physicians, and employees that can help us grow the business in a positive way—that want to help the organization achieve financial performance and advance the enterprise overall," says Tolson.
To encourage clinical improvements, for instance, Christ Hospital uses metrics to look at overall outpatient ratings from Press Ganey and inpatient metrics for HCAHPS. Each area is weighted 10%, or a total of 20% out of 100%. In order for any incentive to be paid out, the executives must reach predetermined targets. That's a sharp contrast to how most organizations structure their executives' incentives, based solely on overall financial performance. Of course, it would be foolish for any organization—regardless of its tax-exempt status—to think it could survive without encouraging its team to strive to keep a strong bottom line. The Christ Hospital didn't ignore that fact in its structure. No incentive bonuses are paid unless the organization reaches its financial performance goal.