Healthcare executive compensation is adapting to new leadership competencies

A recent B.E. Smith whitepaper identified several healthcare trends for 2015, including how the changing healthcare landscape is creating new leadership competencies and altering executive compensation.

Due to factors such as pressure to adapt to the shifting healthcare environment and hospital mergers and acquisitions, CEO turnover in the healthcare industry is on the rise, with the highest level of CEO turnover in 2013 at 20 percent, according to the report.

With turnover so high, B.E. Smith suggests healthcare organizations evaluate several strategies, including "development of leadership skills that reflect the changing demands and need for broad leadership integration," including outstanding collaborative skills "to build teams that can operationalize strategic plans across aligned entities and induce significant change."

Adapting to the new leadership realities, executive compensation in the healthcare industry rose 2 percent to 3 percent over the past year, with slightly higher pay raises for CEOs, according to the report.

Although the industry is moving to align executive compensation with performance-based care models, 43 percent of executives surveyed said their organization hasn't taken steps to match incentives to values such as cost containment and clinical outcomes. However, further alignment will occur in 2015, according to the report.

B.E. Smith's analysis was based on surveys of more than 300 healthcare executives.

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