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Healthcare Reform Revs Compensation in the C-Suite

Michael Zeis, for HealthLeaders Media, December 5, 2012

Increasing in importance in the future for CEOs will be skills at mergers and acquisitions, the ability to structure contracts for risk sharing, and leading the organization to provide services along a continuum of care. Judy Brown, executive vice president and chief operating officer for East Jefferson General Hospital, a 420-licensed-bed community hospital serving Metairie, La., explains that a broader set of collaborators requires a broader set of skills.

"You need to understand care partners' businesses and service lines, how they impact the health of the patient, how the care is given to the patient, and where the best place to give the care is," Brown says. "This means aligning with physicians and other partners, third parties along the continuum. Relationships are going to be very important."

As one might expect, most organizations have specialized needs. Alan Fisher, FACHE, CEO of the 40-bed Advanced Specialty Hospital of Toledo, a long-term acute care facility in Ohio, expects that, because of competition, CEOs will need marketing skills.

"The public is becoming more savvy," he says, "and they are looking for quality outcomes. Because of the competition we have in the specialty hospital space, it will be imperative in the future for a hospital to have sound benchmarking and quality programs, to demonstrate to the market that this model of care may be best suited for hospital systems by assisting in reducing their 30-day readmissions"

Increases expected

Half of the executives in our survey (53%) expect total compensation to increase next year. For most (56%), the amount of increase will be relatively modest, 3% or less. One-third (34%) will see increases of 4% or 5%. One-third (37%) expect no change in compensation in the coming year. Although the expectation of reduced reimbursements is challenging the industry to deliver more for less, it is important to remain competitive with compensation. As the incentive proportion of compensation increases, overall compensation may become more volatile, with the result that fewer will see standard year-to-year increases and some may experience declines from one year to the next.

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