Healthcare Issues & Trends

Advice & Insights for healthcare's Leaders & HR Professionals


Improving Quality of Care

Posted on October 28, 2011 by Eric Reehl

Over the last ten years, more and more hospitals have focused on improving their quality of care.  According to a new report from the Joint Commission, this emphasis on improving quality seems to be working.  The Joint Commission’s new report, Improving America’s Hospitals, shows an increase in quality of care for hospitals across the country.  According to the report’s composite performance measures, which combine data for all their performance metrics, since 2002 quality of care has risen by 14.8%.  You can read the full report here.  As quality of care has become more important to hospitals, many are including quality measures in their executive incentive plans.  By including quality in an incentive plan, a hospital focuses the attention of its executives on one of the organization’s most important goals.   One reason quality goals have become more common is that there is now more data on quality of care, which allows hospitals to compare their quality performance with their peers.  The two main sources of hospital quality data are The Joint Commission and the Centers for Medicare & Medicaid Services (CMS).  The Joint Commission measures the quality of care of its accredited hospitals on treatments for heart attack, heart failure, pneumonia, surgery, children’s asthma, inpatient psychiatric services, VTE (venous thromboembolism) and stroke.  This quality data is available at The Joint Commission’s Quality Check website (www.qualitycheck.org).  CMS records quality information from U.S. hospitals including Department of Veterans Affairs hospitals and hospitals not accredited by the Joint Commission.  CMS measures treatments relating to heart attack, heart failure, pneumonia, surgical care and childhood asthma.  This quality data is reported at the CMS Hospital Compare website (www.hospitalcompare.hhs.gov).

Physician Leadership Academies

Posted on October 19, 2011 by James A. Rice, Ph.D., FACHE

Many hospitals and health systems have asked physicians to assume leadership roles in their organizations.  To prepare these doctors for their new roles and to secure the needed number and quality of physician leaders, hospital boards are authorizing increased investment into the formation and enhanced operation of physician leadership academies. The scope and nature of physician leadership academies have expanded substantially during the past five years to support physician leaders in their successful achievement of three classic performance imperatives: align physicians’ time and talents to deliver a superior patient-care experience in a coordinated continuum of care system; encourage physician engagement for the design of new medical care protocols that yield enhanced clinical quality outcomes and cost effectiveness; and earn service volume gains from better designed and managed clinical service lines, referral support systems, and physician co-ventures in new high-tech and high-investment diagnostic and surgical centers.  Most programs offer learning experiences focused on a blend of competencies identified by the American College of Healthcare Executives (ACHE), the American College of Physician Executives (ACPE), the National Center for Healthcare Leadership and the American College of Medical Practice Executives.  The competencies fall into the following 10 categories: 

  • Business operations and financial management
  • Strategic visioning and business planning
  • Project and group management
  • Quality and process improvement
  • Ethics and regulatory compliance
  • Service line management
  • Listening and communication skills for coaching and mentoring
  • Managing disruptive behavior among professionals
  • Leadership situational styles and versatility
  • Healthcare economics

New York Asks Not-for-Profits to Justify Executive Pay

Posted on October 14, 2011 by David Bjork

Trustees of hospitals and other agencies and institutions that receive funding from the State of New York now have to disclose and justify the way they pay their executives in far more detail than required for IRS Form 990.  Governor Cuomo’s newly appointed Taskforce on Not-For-Profit Entities “is conducting a top-to-bottom review, not only to audit current compensation levels, but also make recommendations for future rules to ensure that taxpayer dollars are used to serve and support the people of this state, not pay for excessive salaries and compensation,” according to the chair of the taskforce, Benjamin Lawsky. The taskforce is sending letters to not-for-profit organizations selected on the basis of the value of funds received from the state.  The letters, addressed to the board of directors of the organizations, ask for information on compensation and benefits for executives, administrators, or board members, and on any employee who was paid more than $100,000 in total annual compensation anytime between 2007 and June 2011, as well as information on the organizations themselves. Most of the information requested is already reported in the organizations’ IRS Form 990 for the years in question.  Insofar as the taskforce really wanted to study executive and board compensation at these organizations, it could have started with information already reported to the IRS.  Instead, it ask boards—volunteers who aren’t paid to do this kind of busy work, and who surely have more important things to do—to collect and report even more information that the IRS requires—within three weeks of the date the first letters were sent! In addition to information about compensation paid, the letters also ask for a list of funds received from the state, names of compensation consultants retained by the organization, a description of procedures to ensure that the board will review compensation for executives and board members, and a list of actions the board plans to take to protect taxpayer funds.  They ask whether boards believe that the organizations should recoup executive or board compensation, what comparables are used in determining compensation, what justifies the compensation paid to executives and board members, and what justifies the organization’s not-for-profit status. If the taskforce or staff members knew what they doing, they might be able to justify this study, but the letter makes it clear that they don’t.  It asks for the same information multiple times.  After asking for a detailed report on all elements of compensation for every executive/administrator/board member and anyone who received total compensation over $100,000, it asks separately for a list of each employee receiving compensation equal to or greater than $200,000, then a list of the top twenty-five highest paid executives, administrators, and/or board members.  If the first question asked for the people on the first list to be placed in descending order of total compensation and indicated that the list should include at least the twenty-five highest paid executives, administrators, or board members, one list would have sufficed. After asking for a description of the respondent’s “executive and administrator compensation program, including base pay, bonuses, annual incentive pay, sales incentive pay, long term incentive pay, supplemental incentive pay, and any other incentive plans,” it asks for “a description of your bonus program, including cash and other incentive breakdowns, vesting periods, claw-back provisions and any other provisions to tie compensation to performance.”  Then it asks for a description and chart of all bonuses awarded to executives and administrators for each year.  (How many times can the taskforce expect the respondent to describe incentive and bonus programs?)  It asks questions without defining clearly what it is asking for, then offers definitions that are confusing. After asking for total compensation for any individual who is an executive/administrator/board member or who received total compensation over $100,000, it asks for annual reimbursement received, without defining reimbursement.  One could guess that the question asks about expenses reimbursed—except that a definition of “other compensation” provided later includes travel and hotel expenses of any kind.  Several questions ask for salary, bonus, other compensation, deferred compensation, and total compensation, with no general explanation of what the terms mean.  We ought to be able to figure it out, except that the definitions that are offered are confusing.  It isn’t obvious, for example, whether deferred compensation is supposed to be considered a subset of “other compensation,” or something different.  Eventually, the questionnaire defines “other compensation” as “including, but not limited to, incentive compensation (as if that were different from bonus), benefits of any kind (would that include deferred compensation?), and/or perks such as cars, travel, and hotel expenses of any type, apartments, tickets to games/events and/or club memberships.”  Later, it defines total compensation as the sum of base compensation, annual bonus, other compensation, and deferred compensation.  So compensation evidently includes reimbursement for certain kinds of expenses, but not others; and both bonuses and incentives, whatever the difference is supposed to be—but it isn’t clear whether incentive awards should be reported in the column for bonuses or in the column for “other compensation” or both.  It isn’t clear whether reimbursement for travel and hotel expenses should be reported as “reimbursement” or “other compensation” or both.  And it isn’t clear whether they really want legitimate business travel expenses reported as other compensation and counted as part of total compensation, or only those that really are perquisites. After asking for a description and chart of board compensation, it asks for a description of all policies, procedures, and protections the board has instituted that will ensure board review of all such company expenditures going forward.  (What does it mean by expenditures?  Any compensation for executives/administrators/board members and anyone paid over $100,000?  Or only board compensation?)  Then it asks a number of questions all inquiring, one way or another, whether the board believes that executives are paid too much:  “Do you believe that recoupment and/or clawback of executive and/or board compensation is necessary?”  “What is your view regarding recoupment and/or claw-back or executive and/or board compensation?”  “Is the board or management considering any recoupment and/or claw-back for past salary and/or benefits?”  “What justified the compensation to executives?”  Yet it doesn’t explain whether it means something different by recoupment and clawback, or exactly what it means by those terms.  Does it mean taking back pay the board deems excessive?  Or taking back bonuses or incentive awards paid for performance that was discovered to be not as good as the executives claimed it was?  Presumably boards believe executives are paid appropriately, or they wouldn’t have approve their pay.  It’s obvious, though, that the taskforce believes that executive pay is excessive.  Whoever wrote the questionnaire let zeal get in the way of accomplishing whatever the taskforce thought it might accomplish.  If boards actually answer these questions, the taskforce can be sure that the data will be reported inconsistently, since the questions aren’t clear and the definitions aren’t clear.  Whatever some analyst concludes from studying the data is sure to be wrong, because the data itself will be so inconsistent that no one will be able to make sense of it all. If someone had spent more time figuring out how to write clearer questions, and defining terms carefully, instead of wasting time asking the same questions over and over again, it might have gotten more reliable information.  If the taskforce had spent some time trying to figure out the easiest way to get this information, it might have discovered that almost all the information it asked for, and almost all it needs to determine what it’s looking to determine, is readily available in Form 990.  It might have discovered that the definitions in the instructions to the 990, vague as they are, would be a good enough place to start, and better than what it might make up on its own.  It might have discovered that most not-for-profits don’t have 25 executives, administrators, or board members paid enough to include on a list of “highest-paid” individuals.

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