Monday, September 9, 2013

Performance goals for hospital CEOs discourage change

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% per year since 2009 with an increase of 4.8% 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?

Everyone is entitled to make a living. And for sure most doctors do very well. But doctors are being squeezed on many fronts—declining reimbursements, need to purchase expensive and time-sucking electronic medical records software, more ICD codes, rising overhead to name a few. They are being forced to sell their practices to hospitals. Once the majority of physicians become hospital employees, their incomes will no doubt be squeezed further.

The public is demanding more accountability and transparency from hospitals and more emphasis on keeping people well rather than treating the sick.

Yet those who run hospitals have no reason to stress wellness and every rea$on not to. Don't look for anything to change soon.


Anonymous said...

It makes you wonder doesn't it? The hospital CEO's don't seem much different than the insurance CEO's do they? Who is caught in the middle: docs and patients.

Skeptical Scalpel said...

Anon, that is an excellent point.

Cynthia said...

I don't entirely agree with you here, SS, which is very much of a rarity these days.

Wellness programs are based on good ol’ common sense, so these programs should cost hardly anything to run. But the truth of the matter is that those in the wellness industry will find a way to overcharge you for giving out common-sense information. I already see this happening at the hospital where I work. The hospital has recently hired a gold medal winner at the 1999 Pan American games with a PhD in “Human Studies” ( whatever the hell that is) and is paying her six figures to tell employees to do such common sense things like eat right, don’t smoke, look both ways before crossing the street, and always wear a seat belt when your behind the wheel of a car. Sorry, but this is something that a minimum-wage daycare worker is more than qualified to do. What an absolute waste of healthcare dollars!

Skeptical Scalpel said...

Cynthia, it's OK to disagree. Maybe that PhD in Human Studies is really good at what she does.

Anonymous said...

I know 3 patient of his my dad ,and two other friends of mine dads . this guy ruined them and their lives,and families lives. I have a journal on my friends dad that explains the events that took place and how he was treated which I like to say very baldy, and moraly wrong unlawful. this journal was left behind when he moved later on in life. I have kept it because it is unbelievable what is told and that my dad and my friends dads,which they shared the same treat, they themselves were friends .this surgeon should have been stopped well their is a lot I could say

Skeptical Scalpel said...

I think you've said enough already.

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