Linking Incentives to Risk

By Steven T. Sullivan

As health care transforms, boards are tying executive compensation to long-term performance

Many hospital and health system boards and their leadership teams are at an interesting juncture where each is heavily reliant on the other for strategic support and execution. They have a shared goal of successfully moving their organizations forward at a time when the field is in an overwhelming state of transition.

Boards are expecting their leadership teams to establish accountable care organizations by initiating strategic alliances with a wide variety of partners and by re-engineering medical service delivery across the continuum of patient care.

Health care executives, in turn, are asking their boards to support the initiatives needed to expand the delivery of care services. Boards can do this by approving requested capital expenditures, investing in new facilities, hiring clinical and infrastructure personnel, funding risk-managed insurance programs, and purchasing needed technologies for merging and analyzing insurer and provider disease-treatment data.

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