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Performance Goals For Hospital CEOs Discourage Change

Tue, 09/10/2013 - 9:27am
Skeptical Scalpel

A big problem with changing the focus of healthcare in the United States is that hospital chief executive officers are incented to produce profits for their institutions.

This chart from Kaiser Health News shows that the goals for most of the CEOs of major hospitals and health systems are profits. Growth and more specifically, admissions growth, are also mentioned.

It also lists CEO compensation figures, which are quite impressive. In addition to their hefty salaries, most CEOs also command large performance bonuses based on meeting financial goals.

According to Becker's Hospital Review, CEO pay has risen over 4 percent per year since 2009 with an increase of 4.8 percent this year.

All this in the era of the $546 charge for 6 liters of saltwater and the $73,002 charge for an emergency department visit for a urinary tract infection.

If you were a hospital CEO, why would you want to emphasize preventive care and outpatient services when your bonus is tied to profits, admissions, and growth?

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