Fall Symposium

Traditional health care executive compensation programs typically focused on relatively small short-term bonus opportunities earned over periods of 12 months or less, and participants’ awards were often influenced by their business unit affiliation. However, many industry experts believe that the fundamental shift in patient care that is required to succeed in the ACA era will require five to 10 years or more, and will be extremely challenging to finances due to diminishing reimbursement rates for traditional hospital-based care. It is also clear that success will require the sustained collaborative efforts of growingly diverse leadership teams working as a whole across traditional business units. Annual milestones and associated small incentive awards are not sufficient to drive successful transformation. Forward-thinking boards are extending their executive teams’ overall exposure to variable compensation, and the duration of the performance periods in those incentive arrangements in order to align with longer-range indicators of success based on corporate, rather than business unit or department performance.