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Do Healthcare CEOs Deserve More Money Than Doctors?

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Do Healthcare CEOs Deserve More Money Than Doctors?

When politicians and government officials talk about high healthcare costs, physician earnings and salary tend to be at the heart of those discussions.

And yet, there are other players in the healthcare arena who earn much more than physicians — in particular, much more than primary care physicians.

At a lot of health insurance companies, hospital systems, and large academic hospitals, many chief executive officers (CEOs) earn millions of dollars per year, far exceeding what any practicing physician makes.

This wide gap is troubling to some doctors. They wonder what it says about the importance of clinical work, the stress of patient care, and the training needed to become a physician.

Researchers have pinned the average income for a CEO at a nonprofit hospital at almost $600,000, with CEOs at large networks and large teaching hospitals making much more than that. In California, for example, no fewer than 32 CEOs at nonprofit hospitals made more than $1 million per year in 2013. In addition to base pay, healthcare CEOs can make a great deal more in bonuses — and, at for-profit organizations, in stock options.

Does the amount of CEO pay have anything to do with raising quality of care, or even improving the hospital’s bottom line? Not according to a recent study[1] in JAMA Internal Medicine, which examined pay for CEOs at not-for-profit hospitals. The study found no significant association between CEO compensation and the hospitals’ finances or these organizations’ quality, mortality, or readmission rates.

Paying healthcare CEOs a lot of money without solid outcomes troubles Roy M. Poses, MD, Clinical Associate Professor of Medicine at Brown University in Providence, Rhode Island, who blogs at Health Care Renewal (http://hcrenewal.blogspot.com). “I certainly think it takes talent to run a hospital well,” he said, “but it’s not clear that only really talented CEOs get high compensation.”

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Josh Sandberg

Josh Sandberg is the President and CEO of Ortho Spine Partners and sits on several company and industry related Boards. He also is the Creator and Editor of OrthoSpineNews.

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