Hospital CEO pay to be tied to performance

TheStar.com – News/Healthzone.ca
May 3, 2010.   Tanya Talaga, QUEEN’S PARK BUREAU

The Ontario government is getting tough on hospital executives by tying salaries to performance and requiring that each critical incident or medical error is publicly reported and not covered up.

The incentive for executives is simple – the amount of money they will earn will be dependent on patient experience, according to new legislation unveiled Monday by Health Minister Deb Matthews.

And while it is generally understood hospital boards are responsible for the quality of care patients receive, the Excellent Care for All Bill puts it all plainly in black and white, Matthews said. .

Quality teams will be set up in each hospital and they’ll report directly to the board of directors. Each board will now have to examine how its hospital performs – from deadly infection rates to hand washing compliance – and must compare its rates to other institutions, then fix any problems.

For years, the Star has called for improved transparency inside the publicly funded hospital system. A recent series entitled Medical Secrets helped force change inside Ontario’s hospitals. The Ontario government now requires all hospitals to reveal death and infection rates online and for health care regulatory bodies to detail more information on the records of professionals about to treat patients.

Monday’s announcement builds on that initiative by increasing the burden of responsibility on hospital boards and executives.

“This will make it very clear for hospitals right across the province that quality is their responsibility,” Matthews said. “(Every) hospital can achieve the highest possible standards. I am not even sure hospitals are focused on those comparatives yet. But they will be.”

The recent release of the government’s ‘sunshine list’ of public servants earning more than $100,000 a year revealed a number of hospital executives earn more than $700,000 annually. This is nearly three times more than what the premier is paid.

“We want to draw a direct line between the quality of the services that a patient is receiving at a particular hospital and the pay being received by the executive,” he said.

If the proposed legislation is passed, medical errors or critical incidents would be reported directly to the medical advisory committee, to patients and hospital executives – a practice now in place only at some large teaching hospitals like the University Health Network and St. Michael’s Hospital.

At St. Mike’s, there is an online reporting system where all critical events such as an unexpected death or a serious complication are reported immediately and investigated by a quality care committee, said St. Michael’s president Dr. Robert Howard. “Improvement means change,” said Howard. “Traditionally boards have been all over budgets but not all over best practice care. This forces them to get into the arena.”

Adverse events or medical error occur too frequently inside hospitals, experts say. Errors are not only harmful, they are expensive. Last year, more than 140,000 patients were readmitted to hospital within 30 days of being discharged, Matthews said.

“This is bad for patients, bad for their families and it is very costly,” she said. “We have to work together to change this.”

Under the proposed bill, quality committees would also be set up that report to a hospital’s board of directors and it would also require hospitals to submit “quality improvement plans” to be publicly posted on websites.

It will be the responsibility of the hospital board to ensure there is a yearly plan – with measurable results – publicly available, she explained. And a portion of compensation for CEOs and other executives will be tied to achieving those quality improvements. “This is not in addition to what their compensation already is – it is part of it,” she said.

She said she has not yet decided what percentage of executive pay will be linked to performance.

Matthews said she is “concerned” with high salaries in the health sector. She explained the proposed legislation is not about reducing high CEO costs, but it is about improving patient care.

Doctors want to work together with hospitals – not against them – to put patients first, said Dr. Mark MacLeod, the newly elected president of the Ontario Medical Association, the body representing more than 30,000 physicians.

“The doctors of Ontario are 100 per cent committed to this principle,” said MacLeod, an orthopedic surgeon from London. “We have not seen the legislation yet in full but we are here in support of improving the quality of our health care system.”

Progressive Conservative leader Tim Hudak called it “too little too late” for the Liberal government. The Liberals have hidden bureaucratic salaries in hospital budgets, he says. “This is a government near the end of its time in office is scrambling to make up for mistakes it’s made in the last seven years,” Hudak told reporters.

With files from Rob Ferguson

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