Health Affairs July 6, 2021
As health systems have grown in size and complexity, CEO base salaries and bonuses have steadily increased over the past five years. Board members have attempted to align CEO incentives with those of the institution as a whole by linking CEO compensation to performance metrics. Historically, CEO incentive payments have been primarily weighted toward achieving financial performance targets such as operating margin and market share. Recently, however, there has been a push toward linking CEO incentives to hospital quality metrics (patient care outcomes, safety measures, and patient satisfaction) in addition to financial targets. For example, shareholders of HCA Healthcare recently voted on a proposal to increase the share of bonus pay that is tied to quality outcomes. To the degree...
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