A recent article in The Boston Globe sparked my interest in just how closely CIOs’ pay (regular salary and bonus) was linked to quantifiable metrics that related to IT success. I’m not talking about if the CEO and other senior management thought the CIO was doing “a good job.” I’m talking hard numbers that directly correlate to hard dollars.
First, the Globe article. In it, writer Christopher Rowland detailed how some hospitals in the Boston area have tied their CEOs’ bonuses to critical safety issues. “Hospitals have traditionally rewarded chief executives for their ability to attract patients and make money,” Rowland writes. “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.”
This isn’t chump change here. “Chief executives at Boston’s academic medical centers earn more than $1 million a year in salaries and bonuses,” Rowland writes. In his research, he found that “about half of the nation’s nonprofit hospital chiefs, including several in Boston, do not receive full bonuses unless they meet incentive goals…including finding ways to double-check patient identifications, track tissue speci mens, make sure test results are not lost, and cross-check medications.”
That led me to consider if CIOs (and not just in health care) are also being held to similar fact-based and data-intensive standards. For example, because network and application availability and data- and device-loss prevention are so critical to so many organizations right now, is it not reasonable to hold the CIO accountable for those areas–if employees are losing BlackBerrys or laptops at an alarming clip or financial applications are going down at the end of every quarter when the finance department has to have them up, then should the CIO’s pay be negatively affected?
So I got on the phone with John Halamka, who’s the CIO of Harvard Medical School and CareGroup (the hospital system that runs Beth Israel Deaconess Medical Center in Boston), and also an MD. I asked him if it would be a good idea to implement a similar system, with lots of direct accountability, for CIOs.
From his Prius, as he was circumnavigating Boston’s traffic snarls, he told me that this is exactly how has been evaluated for his bonus for the last four or five years. In fact, it was a disastrous network outage at Beth Israel back in 2002 that spanned four days and forced the hospital to revert back to a paper patient-records system that was the catalyst for his move to a more accountable system for his performance and bonus. (To read the harrowing story and how Halamka got through it, check out our award-winning article here.)
Now, he says, “If I don’t keep [the systems up], I’m not getting paid.”
Here’s how it works. In 2007, Halamka’s bonus will be based on measurable reliability, deployment of new software and actual use of applications.
For starters, “software robots perform transactions every five seconds on all our mission-critical systems and then management reports are available to the CEO showing throughput and availability,” he wrote in an e-mail later that day. “My service level is that no transaction will ever take longer than two seconds, 24x7x365.”
In those three areas, Halamka spells out the specifics:
1. Infrastructure. His IT infrastructure systems that support the hospital’s mission-critical clinical and business systems have to achieve 99.9 percent availability. Those systems include: Core data network; Unix server cluster supporting mission-critical applications; Storage Area Network (SAN) and attached storage; Phone system (the PBXs and voice mail); and Windows servers supporting mission-critical applications.
2. Applications. He has to deploy applications that are needed to achieve hospital pay-for-performance goals. These include: ePrescribing, which includes insurance eligibility checking, formulary enforcement, prescription routing and drug history; Oncology Management System, which includes provider order entry for all chemotherapy protocols; Positive Patient identification, which includes bar-coded wrist bands for 80 percent of patients and bar-coded badging for all clinical staff.
3. Implementation and Use. He has to ensure Electronic Health Records are actively used by 90 percent of academically affiliated clinicians, and has to develop a plan and infrastructure to support 90 percent of all non-owned clinicians.
Though he can’t speak for other CIOs and how they are evaluated, he thought that his arrangement might be a little unusual. I asked him, generally speaking, how he has been performing over the years (ie, was he receiving his bonuses). “I’m always extraordinarily honest about my performance about meeting my goals,” he says. Though he has been meeting them, roughly 80 percent to 90 percent each year, he says there always are things that happen that are out of his control (a manufacturer’s defect in hardware, for example).
But, he says, “I don’t try to blame somebody else. It’s just part of my pay.” And he seems more than OK with the immutability of how he is judged. “I can’t fudge the data,” he notes.
What about you? Are you evaluated on similar criteria? Or not? Let me know. I’d love to hear about it.