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The compensation of hospital chief executive officers in Ontario would be tied to how effectively they improve the quality of patient care, under proposed pay-for-performance rules unveiled on Monday .

The proposed legislation is part of the McGuinty government’s plan to get a bigger bang for the investments it is making in health care, postsecondary education and other programs. Premier Dalton McGuinty has said he would consider expanding the concept of pay for performance to the top executive of every Crown corporation and agency in the province.

His government is beginning by targeting hospital CEOs, 14 of whom made more than $500,000 last year. While the so-called Excellent Care for All Bill is not expressly designed to lower salaries and bonuses for top executives of the province’s 154 hospitals, compensation could go up or down depending on performance, Health Minister Deb Matthews told reporters Monday .

“I am concerned about compensation generally in the health-care sector,” she said, “but this bill does not address those concerns.”

Rather, Ms. Matthews said, the new rules would make executives accountable not just for the fiscal health of their hospital but also for how effectively they put patients’ needs first. This includes reducing rates of infection among patients and the number of patients who are discharged from hospital and then re-admitted. Medical errors would be reported directly to patients and hospital executives – a practice already in place in large teaching hospitals.

But Ms. Matthews made it clear the government has no plans to play a more hands-on role in the province’s hospitals – a concern fuelled by Mr. McGuinty’s calls last March for a wage freeze for one million public-sector workers to help Ontario erase its record $21.3-billion deficit. The task of overseeing the development of a quality improvement plan would be up to each hospital’s board of directors, Ms. Matthews said, and an unspecified portion of a CEO’s compensation would be tied to achieving its objectives.

“This is a vote of confidence in the local governance of hospitals,” Ms. Matthews said at a news conference at Toronto General Hospital, where she was applauded by smiling hospital CEOs. Robert Bell, the chief executive officer of University Health Network and the province’s highest-paid hospital executive in 2009, played host to the event.

Opposition members and a patient advocate’s group criticized the government for not reining in soaring salaries for top hospital executives while nurses and other front-line health-care workers lose their jobs.

It is the boards of directors that allowed CEO salaries to “get out of control” in the first place, said New Democratic Leader Andrea Horwath.

“It really is a sham, and the government really has turned its back on the opportunity to get these salaries under control,” she said.

There’s nothing in the proposed legislation that protects a patient’s access to care, said Natalie Mehra of the Ontario Health Coalition. “It doesn’t matter if there’s great quality care if you can’t get to it.”

But John Abbott, chief executive officer of the Health Council of Canada, applauded the government for introducing good prudent health management to the province. Under the proposed legislation, every hospital would be required to measure quality using a number of different metrics, including standardized patient surveys. Hospitals would be required to post annual quality improvement plans on their website.

“None of these are rocket science,” Mr. Abbott said. “These are basic tools of the trade.”

The Globe and Mail

My 2 cents: Just another way for doctors to care less about the quality of care they are giving patients, and care more about how to make more money.