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. Nurses Activism Article

Hospital CEO Salaries: Are The Big Bucks Justified?

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.

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TheCommuter

About TheCommuter, BSN, RN

TheCommuter, BSN, RN, CRRN is a longtime physical rehabilitation nurse who has varied experiences upon which to draw for her articles. She was an LPN/LVN for more than four years prior to becoming a Registered Nurse.

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Specializes in Pedi.

The CEO at my former hospital had an annual salary of close to 2 million dollars. His bonus alone was 10x my annual salary. In one year, he would make more than the average nurse would make if she spent her entire career at this hospital- especially with annual raises being capped at 2%.

In the nearly 5 years that I worked there, I saw this CEO ONCE. When I first started, he used to do "quarterly rounds" with every floor. Those were eliminated soon thereafter because apparently speaking to one's employees is not a valuable use of the CEO's time. He had no actual presence within the hospital and as far as I know, he sat in some office, sent out emails and gave statements to the press.

"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"

In a word "NO".

"Certain talents and a specific skill set" That can describe any Clincal Nurse or Doctor working in any one of these institutions.Now these greedy CEO's want to throw out a catch phrase to make themselves seem more important that they actually are- "skill set"

"Main responsibility for the organization 's comprehensive operation and performance" They accept NO responibility and accountability when the care in these institutions are so poor due to very low and dangerous staffing levels. If a mistake occures they go on an all out witch hunt for the Nurse or the Doctor. Never once doing any self reflection "Did my last decision not to hire or to cut nurses and doctors' have anything to the demise of this patient." They could care less. Number one- they don't have much of a clue what goes into a doctor or nurse performing their job. Case in point: I do triage. Just this week I had the CEO of our facility come up to me and ask me "Do you have protocols for the triage?" First mistake on his part- if the CEO is so competent to make decisions effecting clinical practice w/ money decisions- he should have known, triage always has protocols, it's not guessing and witchcraft. I handed him our book of triage protocals for every kind of call/senerio know to medicine. I don't know what page he opened but I could tell by the look on his face, he plain out didn't understand one sentance he was attempting to read. When I say they don't have a clue as to ANY of the body of knowledge a nurse or doctor must know to do their job, believe me- They do NOT know.! This CEO didn't get too far into the first sentance when he closed the book and handed it back to me.

Should someone who doesn't understand the body of knowledge and stumbles across the medical terms he is reading of his front line employees understand and possess be earning mega milions and be allowed to make critical staffing decisions that effect patient's lives and ultimately jeapordize the license of every licensed professional in the place- Absolutely NOT! This is why our healthcare system is in the shambles it is today./

You better believe I am scrutizing him, his responses and reactions as much as he is scrutinizing us.!!!

I have no problem with CEO's making plenty of money for the responsibilities that they hold; however, it's insulting when nurses & CNAs (the back bone of every hospital) are treated like crap and don't have a descent salary/benefit package and still managers want to take away perks while continually adding more work duties....

take a look at this- i went on the link communter supplied in their article- medcity- and scrolled down to the comment section.

good old javon bea- the ceo mentioned in commuter's post apparently he didn't like the good doctor thurman poking around into the specifics of ceo salaries:lol2: testie isn't he!!

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how would i find out what the ceo would make at samaritan community hospital a public owned hospital in macon, missouri. i am being blocked for something which should be public information because of the sunshine law but in this particular instance time is of the essence. any response would be greatly appreciated. with respect and integrity, i remain, dr. t. thurman

comment by dr. t. thurman — march 24, 2012 @ 11:52 am

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what business is it of yours what he makes. whats your salary so we can criticize it.

comment by javon bea — may 16, 2012 @ 7:04 pm

Specializes in Case mgmt., rehab, (CRRN), LTC & psych.
good old javon bea- the ceo mentioned in commuter's post apparently he didn't like the good doctor thurman poking around into the specifics of ceo salaries testie isn't he!!
lol! if the multimillion dollar ceo is truly monitoring the comments sections of internet articles, it would be the funniest thing in the world to me. however, it might be an impostor using his name. i truly hope the ceo has better things to do...

I doubt it. LOL

Specializes in Neuro ICU/Trauma/Emergency.

Coming from an executive position prior to going active with my nursing license, I will definitely say our pay is well justified. Though we render the bedside care, there's a lot more that goes on throughout the healthcare system that nurses, doctors, techs, etc. will never be able to understand. When we're crunching numbers to assure the budget is sufficient enough to pay the nursing staff and maintain professional coverage, assuring there is additional aids to assist when the work load is unbearable, disputing insurance claims, being present for malpractice hearings, dealing with government inspections, guidelines, maintaining knowledge of the most recent healthcare policies, marketing the facility appropriately( not just locally but globally). I definitely think my job was more difficult then than it is now.

Specializes in Trauma.

Running and being ultimately responsible for something as complex as a large hospital does take a specific skill set. It also requires more than an Associates degree or a Certificate you can get in 6 weeks. Hospital CEO's have higher education and many years of experience, and a good track record before even being considered for that job. Most are recruited into those jobs they don't answer an ad in the local newspaper.

Several years ago I ran a business, albeit a small business with 7 employees, and that was the most stressful job I have ever had. When you are responsible for money that is not yours, and employees, you pretty much live that job.

Maybe many of the health care facilities are closing down due to poor management, crappy CEO's. In the world of corporate CEO's would you rather have one that could be recruited in for $150,000 or one that has his stuff together and can demand $1M?

Often people are paid according to how easily they can be replaced. I would bet there are more RN's in New York than there are CEO's in the US that make over $500,000.

Specializes in Legal, Ortho, Rehab.

Well said!

GOODNESS!!!!!!!!!!!!!!!!!!!!! $3 million??????!?!?!?!??!? Hmmm....I wonder how many nurse salaries could be taken from this...

I agree to an extent with the above post. Sure, stressful jobs should pay better..but where do we draw the line? The President of the United States makes less than some doctors do, and many times less than these CEO's. There are more people in the corporate ladder than just one man/woman to run the show. The responsibility doesn't just lie with one person ever; remember, this is America. :) Monarchies went out with King George. At least give the nurses a better salary and benefits! Without RN's, CNA's, and other personnel, there would be no hospitals. "Greed is the root of all evil", and I believe it.

All medical staff have huge responsibilities. Patient's lives literally depend on all of us. Is everyone fairly compensated for that? No. So while the CEO and CFO of a company should be paid a decent sum, should they make 10x a nurses pay? Is their responsibility worth that much more than any other medical professional?

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