Magazine article Drug Topics

Pay Dirt

Magazine article Drug Topics

Pay Dirt

Article excerpt

Hospitals borrow private-sector incentives to motivate staff

Annual raises for hospital pharmacists may be disappearing as quickly as unrestricted drug formularies. Following the lead set by private industry, some hospitals are beginning to link pay with performance.

In Pittsburgh, the Hospital of the University of Pennsylvania recently replaced annual raises with bonuses based on patient satisfaction and departmental performance. Similarly, the M.D. Anderson Cancer Center in Houston has set up hospitalwide incentive bonuses based on patient satisfaction surveys.

"We really should do a good job regardless of targets and awards," said Roger Anderson, head of the pharmacy division at M.D. Anderson Cancer Center, adding that the incentive program has had a positive impact on patient care.

Employees throughout M.D. Anderson receive a uniform annual bonus based on improvements measured by patient satisfaction surveys. Patient satisfaction is as much a marketing tool as it is a measure of the quality of care, Anderson explained.

"Patient satisfaction is beyond fad," he continued. "Management really does care. With managed care doing a fair amount of steering of patients, patients are already speaking up if they're steered someplace they don't like. Patient satisfaction has a direct bearing on future business."

The University of Pennsylvania is also counting on patient satisfaction to separate its hospital from the crowd. In 1996, hospital employees received a bonus based on responses to patient surveys. This year, employees will be able to earn up to 5% above base salary, if both the hospital and their department meet predetermined targets. "We're not in a bad place in the market," said Richard Demers, interim director of the department of pharmacy. "But we weren't where we wanted to be. Incentives encourage our employees to take a more proactive stance in dealing with patients."

Demers is part of a three-tier program. Half of the annual bonus (50%) is tied to hospitalwide patient satisfaction. The rest is tied to departmental quality measures (25%) and performance goals (25%). Pharmacy is basing its performance bonus largely on volume of pharmacist interventions on physician drug orders. Since the hospital is a teaching institution, Demers said, the steady supply of new physicians in training means R.Ph.s needn't worry about running out of interventions.

Pharmacy managers have their own incentives. Demers has an all-ornothing bonus based on how well the pharmacy department performs. Like other department heads, he gets a bonus only if the department meets its targets, including financial performance. …

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