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Reassessing Executive Compensation

By Michael Zeis  
   November 13, 2013

Staff development is another way to bolster executive skills. Texas Health and others run physician leadership programs for staff physicians and members of their employed physicians' group. MetroHealth's Boutros reminds us that the existing leadership team knows the organization and its culture, so he favors developing or supporting the current team. "I believe new CEOs should either bring in executives now with the right set of skills, or provide opportunity for the executives who are here today who understand the culture and who have longevity with the organization. Or give your executives support in their departments to be able to manage new challenges. So you either do it by hiring new people or you do it by supporting the people who already are here. The latter is the way I prefer."

Noting that 36% of respondents say their CEO will address needed but missing skills by relying on the staff (the top response), Boutros observes, "It says to me the CEO is using more teamwork and less self-reliance. In the past a CEO might have said, 'I'm going to be the captain of the ship. I'm the only guy who's going to be able to do it.' Now CEOs are saying it is really about a team effort."

CMC's Pepe also sees the CEO position as one requiring communication and collaboration skills. "I think education of the board and the ability to align physicians and other hospital staff are extremely important skills. Today and in the future, a CEO has to be a good communicator and collaborator. CEOs who are demanding control and are authoritative really do not have a major role in today's health systems."

The move to value

In just a couple of years, CMC has shifted the basis for its incentive program from 100% volume-based to one that is largely value-based. "We're still living in a volume world," Pepe says, "but I think at CMC we're way ahead of the pack when it comes to knowing where we want to go and putting our money where our mouth is. A lot of people talk about value, but they're still being incentivized almost wholly in the volume world. It's a big change, and it's a culture change, but when I talk to [our] executives, managers, and directors, they understand that we're doing this in interest of the population we serve and the community we serve. They get it. I realize that we're still living a good portion in the volume world, but we have to start making these changes or we won't be prepared for the future."

Reprint HLR1113-3

This article appears in the November issue of HealthLeaders magazine.

Michael Zeis is a research analyst for HealthLeaders Media.

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