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Hospitals tie CEO bonuses to safety

Push for a reduction in errors, infections

Hospitals have traditionally rewarded chief executives for their ability to attract patients and make money. But now more are linking a portion of executives' pay to a range of safety measures, from reducing medication errors to monitoring how often doctors wash their hands.

The change is a reaction to increasing pressure from Washington and state capitals over hospital safety, healthcare industry specialists said. Trustees are turning to paychecks as a way of holding executives accountable for medical errors and hospital-acquired infections.

"Regulatory oversight, state attorneys general, and anxiety over billing practices has pushed it right into the boardroom," said James Rice , a compensation specialist in the healthcare division of Clark Consulting in Minneapolis. "The nonprofit hospital sector is under intense scrutiny right now."

Chief executives at Boston's academic medical centers earn more than $1 million a year in salaries and bonuses, according to the latest data available. About half of the nation's nonprofit hospital chiefs, including several in Boston, do not receive full bonuses unless they meet incentive goals, specialists said, including finding ways to double-check patient identifications, track tissue speci mens, make sure test results are not lost, and cross-check medications.

Hospital managers have looked to incentive systems in place at hotels, restaurants, and other service industries, said Helen Drinan , senior vice president for human resources for Caritas Christi Health Care .

"We have to drive a higher level of performance, and part of that is getting your executives' attention," Drinan said. The six-hospital system, which is owned by the Archdiocese of Boston and includes St. Elizabeth's Medical Center in Brighton, began in 2006 to hinge up to 10 percent of executive bonuses on safety and quality improvement.

At Beth Israel Deaconess Medical Center in Boston, chief executive Paul Levy , could lose as much as a third of his $195,000 annual performance bonus if, among other things, he fails to increase the number of doctors and nurses who wash hands between patients, reduce certain types of infections, and increase the number of employees who receive influenza vaccinations. This is the third year Levy has been subject to the requirements.

"Hospitals have been so focused on staying alive financially that maybe they forgot what their original mission was, which was to do no harm," said Lois Silverman , who reviews Levy's compensation as chairwoman of the Beth Israel Deaconess board of directors. "Part of many individual bonuses were based on the financial status of the institution but that didn't seem to be enough for healthcare."

The adoption of such measures locally is spotty, according to a Globe survey of the city's largest hospitals. Tufts-New England Medical Center said it does not directly link incentive pay to quality measures for its chief executive, Ellen Zane , but the pay of some other executives is partially based on incentives.

Boston Medical Center, led by chief executive Elaine Ullian, refused to disclose its policies.

Partners HealthCare, the largest healthcare network in New England, does not have written employment agreements linking safety goals to bonuses for executives, including Dr. Peter Slavin at Massachusetts General Hospital and Dr. Gary Gottlieb at Brigham and Women's Hospital . But Partners chief executive Dr. James Mongan does consider a host of safety performance measurements when deciding how much bonus money to pay, said Thomas Glynn, Partners chief operating officer. Among the measures Mongan reviews: what percentage of patients have bar-coded wrist bands, and what percentage of those with artery blockages get a balloon angioplasty within 90 minutes of arriving at the hospital.

"It is part of their performance appraisal, and it is very detailed and explicit," Glynn said.

Also, Massachusetts General this year began linking 5 percent of their compensation to an incentive payment for senior vice presidents and medical department chiefs who work under Slavin.

Mass. General received a negative safety review after a December 2006 inspection by the Joint Commission , the national, nonprofit hospital accreditation organization, which found that not enough clinicians washed their hands and that some staff members did not adequately maintain patient records. The hospital said its incentives were established before the inspection report.

But monitoring something such as hand-washing is difficult. Mass. General sends infection-control squad members to discreetly mingle at medical units and observe how often clinicians wash between patients, said Gregg Meyer , who was hired as the hospital's first senior vice president for quality and safety last year. The hospital achieved an 87 percent hand-washing rate in the first quarter of 2007; its goal is to improve to 90 percent, Meyer said.

"It's not that quality and safety were never considered, but we're tying it much more explicitly to compensation," he said.

Children's Hospital Boston began a safety and quality-related incentive program for chief executive Dr. James Mandell and other executives in 2003, but the hospital would not disclose how much money is involved. Among the required enhancements on the list: training 3,000 clinicians to follow standardized steps when they communicate information about patient care.

Children's Hospital physicians were the subject of a malpractice lawsuit that focused on communication lapses, after 13-month-old Taylor McCormack died at the hospital because of excess fluid in her brain. In the hours before the girl's death in 2000, a medical resident paged an on-call neurosurgeon who did not respond. The surgeon later said he didn't notice the message because his pager was set to vibrate instead of ring. Hospital staff members also gave conflicting accounts of operating room availability on the night of McCormack's death. In 2005, her family reached an undisclosed settlement with the hospital.

Michelle Davis, a hospital spokeswoman, said the standardized communications system is being rolled out in connection with other efforts to encourage clinical staff -- regardless of rank -- to voice their concerns and opinions about patient treatment.

"We expect these things will greatly improve the quality and effectiveness of communication, hence, improve the quality and safety of care," she said.

Christopher Rowland can be reached at