Hospital program links pay to quality care

Employees are rewarded for meeting specific goals

At Blanchard Valley Regional Health Center in Findlay, OH, every employee receives bonuses linked to the organization's financial and quality performance.

In the past, associates were eligible to receive an annual pay increase based on a schedule and steps in a pay range, but that system did not effectively drive organizational and individual performance.

"We decided as an organization to really push our patient satisfaction scores and to get our quality indicators where they needed to be. Now folks exceeding expectations are eligible for a higher increase," says Sandra Shutt, director of quality. "We really raised the bar when we put the pay-for-performance program in place."

An organizationwide bonus program also is in place, subject to payout based on specific triggers, such as a financial trigger based on the organization's performance compared to budget. "If the organization does not meet the minimum budget trigger, the bonus is not paid out. If the organization is above budget, a higher bonus gets paid out," says Ryan Fisher, the organization's human resources manager.

Every individual has both a group and individual goal for his or her position. The group goal may be a quality-related goal specific to a department, such as improving patient satisfaction, while the individual goal is related to a specific position, such as answering the phone within three rings. "In order to be eligible for the bonus, not only must the organizational financial trigger be met, but you must also meet your group and individual goals," says Fisher.

In 2005, 10 quality indicators were identified, with directors assigned to each indicator. Some of the indicators were tied to core measures established by the Joint Commission and the Centers for Medicare & Medicaid Services, with the goal of getting into the upper 75th percentile for all the indicators. For the directors to receive their bonus, they needed to achieve the goal identified for their indicator. "For me to receive my bonus, all 10 quality indicators had to be met," says Shutt.

The organization has continued with some of the same indicators for 2006, including acute myocardial infarction, congestive heart failure, and pneumonia.

"For this year, it has been determined that AMI will be at 100%, CHF at 93%, and pneumonia at 95%. For the utilization nurses to receive their bonus, all three of those indicators must be met," says Shutt.

The pay-for-performance program was implemented last year, with an evaluation for each employee based on responsibilities and behavior, and the final score determining the percentage of the employee's pay increase.

"This has the same or similar goals to the bonus program. So if you don't do well on pay-for-performance, there is a good chance you might not qualify for the bonus either," says Shutt. The program includes a midyear review in addition to the end-of-the-year review, which improves communication between manager and employee.

The goal is to retain employees who are exceeding expectations and have individuals see the impact they have on quality, say Stacey Chapman, director of human resources. For example, when it comes to making sure a patient gets aspirin on arrival for AMI, any number of people can make sure that happens, she says.

"What it really comes down to is, you are rewarding your top performers because those are the people we want to retain," Chapman says. "We want to hold people accountable, and for the associates to understand how their performance impacts patient satisfaction and core measures."

[For more information, contact:

Sandra Shutt, Director of Quality, Blanchard Valley Regional Health Center, 145 W. Wallace St., Findlay, OH 45840. Telephone: (419) 425-5743. Fax: (419) 423-5463. E-mail:]