Tying Executive Compensation to Quality Outcomes
May 16, 2010
Posted by chcablogadmin in : Boards, Leadership
At last week’s Forum meetings, more than 60 quality and safety leaders listened intently as Chris Dawes and Dr. James Woody of Lucile Packard Children’s Hospital (LPCH) shared excellent advice on how to engage senior executives and the Board in quality performance. One strategy, in particular, piqued our interest: quality outcomes are part of the annual incentive plan for ALL executives at LPCH.
Just last week, the Canadians announced a similar strategy in the form of regulation. With Canada’s “Excellent Care for All Bill,” top executives at Ontario’s 154 hospitals could see their compensation go up or down depending upon their organizations’ quality performance. While no state or federal law like the Ontario measure is likely to be passed, pressure is mounting for CEOs to make sure quality issues—everything from stopping hospital acquired infections to improving disposal of medical waste—are responded to promptly.
In the U.S., CEOs are often measured for the hospital’s financial performance, but how many of you – AND your senior management teams – are accountable for the hospital’s quality outcomes? What’s your take on aligning incentives and quality?
For more on quality incentives, read the HealthLeaders commentary on what happens when quality payment incentives stop.
Note: You may remember Jim Woody from his discussion on innovation at last February’s Executive Dialogue meeting. In addition to his role in the venture capital community, Jim is a member and Chair of the Quality, Service and Safety Committee of the Board, LPCH. If you are interested in a copy of Chris and Jim’s videotaped session, “Board and Senior Executive Engagement in Quality,” please contact Pam Ellis at CHCA. pam.ellis@chca.com or 913-262-1436, ext. 150.
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