Hospital CEO Salaries: Are The Big Bucks Justified?
In this current era of escalating healthcare costs, people have been scrutinizing the salaries, perks, and other forms of compensation that hospital CEOs receive. Are the big bucks justified? The intended purpose of this article is to further explore the hot topic of hospital CEO salaries.
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CEO is a widely used acronym in the corporate world that stands for 'chief executive officer.' The CEO of a hospital or healthcare system is the top executive in charge who bears the main responsibility for the organization's comprehensive operations and performance. In other words, the hospital CEO is the man or woman (typically a male) with the ultimate authority to make the big decisions regarding the manner in which the hospital will be run. The effects of the hospital CEO's decisions trickle down to all areas of the healthcare system in which he runs and can have lasting effects.
Healthcare expenditures in the United States have been escalating for quite some time. In this current era of rising healthcare costs, members of the public have been paying close attention to the compensation packages of hospital CEOs.
The 2010 national average salary and bonus for a hospital CEO is $517,000 and $909,000 for a health system CEO, according to consulting firm Integrated Healthcare Strategies, reports Georgia Health News (Cheung, 2011).
Furthermore, many hospital CEOs earn salary packages that greatly exceed the national average. Nine percent of nonprofit hospital chief executives in the Midwest are paid more than $1 million a year, according to a new report (Glenn, 2011). Additionally, some hospital CEOs are paid multimillion dollar salaries each year.
Javon Bea, president and CEO of Janesville, Wis.-based Mercy Health System, who made roughly $3.6 million in total compensation in 2009, is defending his salary, saying it has no effect on healthcare costs, according to a Janesville Gazette report (Herman, 2011).
Are these hefty salary ranges justifiable in this day and age?
I'm assured that almost any highly paid hospital CEO would argue that certain talents and a specific skill set are required to successfully run health systems. Surely, nonprofit hospitals wish their executive salaries wouldn't be held under such a public microscope, but that's the price of a tax exemption-and it's a price that to them apparently is ultimately worth it (Glenn, 2011).
Does it make any sense to have leaders of hospitals who earn salaries that are often many times more than the other employees' pay, especially when many healthcare facilities are going out of business? It's a difficult question to answer, and we cannot reasonably expect to use simple solutions to resolve complex problems. This is just some food for thought.
