Of the 1,877 CEOs at 2,681 hospitals studied, the average compensation was approximately $600,000 per year, though this varied widely. CEOs of small rural hospitals earned salaries and bonuses of just $118,000 a year, while those at the largest urban teaching hospitals earned on average nearly $1.7 million per year. And some CEOs earn considerably more than that. For example, in a recent year, the CEOs of Northwestern Hospital in Chicago and the University of Pittsburgh Medical Center each earned in excess of $5 million in salary and bonus. The lack of correlation between CEO pay and hospital quality should not be surprising. There is ample evidence that such linkages do not exist in private industry. Published in the Journal of the American Medical Association: Internal Medicine, the study found no link between nonprofit CEO pay and a number of important hospital quality indicators, including mortality rates, readmission rates, and the amount of charity care such institutions provide. Such findings are especially ironic at a time when many hospital executives say that improving quality is their organization’s top priority.Īnd quality indices are not the only hospital performance metrics to show no correlation with CEO compensation. Even the financial performance of hospitals shows no such link. Other recent studies have also showed no correlation between pay and community benefit. So if CEOs are not compensated on what their institutions are contributing, on what is their compensation based? The key factors appear to be the size of the institution, an urban as opposed to rural location, and whether a hospital plays a large role in teaching, all of which are tied to higher CEO pay. ( Charles Rex Arbogast/AP)Ĭan you tell how good a job hospital CEOs are doing by the amount they are paid? A study by investigators at the Harvard School of Public Health this week suggests that the answer is no. Saved Stories Save The entrance to Northwestern Memorial Hospital in Chicago where, in recent years, CEOs have earned more than $5 million in salary and bonus.
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