Hospital safety records, CEO pay increasingly linked

Five years ago, it was rare to find a hospital CEO familiar with ventilator-associated pneumonia. Not anymore.

As more hospitals link their chief executive's pay or bonus to safety measures, more top administrators are not only aware of the problem but also well versed on how to prevent such illness.

"This is a period where hospital administrators have to shift what they are accountable for," said Exempla Healthcare CEO Jeff Selberg, who oversees a three-hospital group in Colorado. "We used to think that the clinical staff takes care of patients."

Selberg said he and other CEOs believed it was their job to focus on the financial end of the business. But with hospitals moving toward transparency, it is becoming every CEO's job to ensure personally that medical care is delivered properly and that systems are in place to improve patients' safety.

Although that seems a natural part of any top hospital administrator's position, that expectation is clearly spelled out today in a way it was not before.

For Selberg, his bonus is based on an overall mortality rate that takes into account how often postsurgery blood clots, central-line infections, bed sores, patient falls and cardiac arrests outside intensive care occur. The people he answers to also consider the rate of ventilator-related pneumonia, among other factors, when deciding his bonus.

Years ago, senior leadership teams may have viewed ventilator-associated pneumonia as an unavoidable medical complication, said Maureen Bisognano, the executive vice president and chief operating officer of the Institute for Healthcare Improvement.

Although the IHI does not possess hard data on how many hospitals link safety measures to CEO bonuses, Bisognano said it's a growing movement. "Certainly, it's on the upswing," she said. "I'm in support of the experiment. It has allowed some new conversations to happen."

But it's no panacea, Bisognano cautioned.

"I don't think it's a long-term strategy," she said. If hospitals institute more complex payment mechanisms for top administrators, it may bog down the system of providing the best health care. "People will just be in the whipsaw they're in now, trying to juggle priorities. You need a small number of aligned target areas, so people are able to focus."

At Beth Israel Deaconess Medical Center in Boston, about one-third of CEO Paul Levy's bonus is tied to specific safety outcomes, a move that has led to significant improvement in patient care, said Lois Silverman, chair of the center's board of directors.

Some months, for instance, the hospital has no central-line infections, she said. The center also instituted a policy that allows anyone to call a superior at any time if he or she believes a patient is not doing well.

"There is no fear of retribution for calling someone at 3 a.m.," she said. "In fact, it's mandated that you must."

Overall, the board is less focused on finances and more focused on quality, Silverman said, noting that the group may spend two-thirds of its meeting time addressing quality issues.

The shift in attention has improved employee attitudes, increased the number of hospital job applicants and decreased turnover, she said.

"It boosts morale, knowing we're all working toward the same goal," Silverman said. "When people feel empowered, they feel they can make a difference."

Continuing to improve the system

There is still work to be done, however. For example, one safety measure tied to Levy's bonus is increasing the number of times doctors and nurses wash their hands before and after seeing each patient, an outcome that is difficult to measure, Silverman said.

Currently, the hospital assesses the amount of soap and cleanser used on a weekly basis. "That's not an adequate measure," she said.

Selberg ran into a similar challenge at Exempla's three hospitals when he wanted to reduce the number of patients with bed sores or pressure ulcers.

"Our record keeping wasn't sufficient enough," he said. Staff tracked the level of incidence but didn't record whether patients arrived at the hospital with such sores. "We've now updated our documentation," he said, "and we're better about early detection."

Selberg said he supports linking safety measures to CEO pay.

"I'm a big believer in this approach," he said, noting that such incentives are becoming more commonplace. "The problem is getting a set measure that everyone agrees to."

And Exempla did not stop with linking safety to its CEO pay. It set improvement goals and created pay incentives for management-level employees. Selberg also is evaluating the hospital's electronic record keeping system to look for ways for more immediate data.

For example, Selberg might review the hospitals' July report cards with safety-related patient data from April and May, which is 60 to 90 days old. "A key issue is if you have immediate results, so you can do rapid cycle improvement," he said.

With the move toward transparency gaining momentum, that data on infections, patient safety and mortality rates eventually will become public. "People ought to know that information," he said. "People like me will have to show good results to be competitive."