Not unlike many other hospitals, The Christ Hospital has endured some tough economic times, and during those years the organization did not pay incentive bonuses. Even then, the organization's compensation structure still acted as a catalyst for employees to pursue quality and patient satisfaction goals, Tolson says.
Also in contrast to many of its healthcare peers, The Christ Hospital's compensation structure moves away from using only annual incentives. The idea is to encourage the C-suite to think long-term and not undercut the organization's future performance while trying to hit the current year's targets. To do this, it established a three-year rolling incentive plan tied to its 7-10-year strategic and financial plans.
"Our [compensation] approach was to find a way to more tightly align our people and our goals by rewarding for quality, patient satisfaction, and financial performance. I think in the future more hospitals and health systems will need to do this, too. In the past, compensation has been about sustainability and maintaining the status quo. Now it's about much more; we all need to row in the same direction to succeed," Tolson says.
For organizations to succeed with population health management, physicians are not the only healthcare leaders who must move away from fee-for-service and toward pay-for-performance. Ultimately, for an organization to continue to achieve financial success in the reform era, the compensation of its leadership must also change.