Hospital CEO Salaries: Are The Big Bucks Justified?

[TheCommuter]

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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[Leonardo Del Toro, RN]

It is sad we don't have a socialized or at least a semi socialized health care in the United States. Hospitals are corporations that resemble any other corporation where the sole purpose is to make money and cut costs. So they are in the business of health as they would be in any other business say making tires, cars of potato chips. I don't have a particular problem with that this is a free country and as long as they are taking care of their employees and the clients with dignity and quality.

What I do have a problem with is that fact that these corporations that don't pay taxes because most of them have a "non profit status". What service do they provide the community? What protection do they offer nurses and CNA's the backbone of their offered services? Cutting pay, pension and benefits certainly is not a service to the community. So where is the accountability of this corporations?

[nursel56]

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.

Steve Jobs didn't have a college degree and he managed to keep his head above water pretty well running a complex business. It would take a lot of large hospitals to equal an Apple.

It's kind of naive to assume a CEO always uses his position of power to edify his corporation when they can just as easily use that power to send the company down the crapper and waltz away with his/her off-shore bank accounts all nice and pretty.

[HM-8404, BSN, RN]

Steve Jobs didn't have a college degree and he managed to keep his head above water pretty well running a complex business. It would take a lot of large hospitals to equal a Microsoft.

It's kind of naive to assume a CEO always uses his position of power to edify his corporation when they can just as easily use that power to send the company down the crapper and waltz away with his/her off-shore bank accounts all nice and pretty.

Going by your way of thinking we should just shut down all colleges because Steve Jobs was successful without a college degree. A CEO can use their power to send a company down the drain and waltz away? Of course they can. That is why CEO's are well known people to the Board of Directors. There are many reasons a company can go under that the CEO actually has no control over, but the CEO is ultimately held responsible.

[chuckster, ADN, BSN, RN, EMT-B]

Hospital CEO Salaries: Are The Big Bucks Justified?

CEO salaries are approved by the board of directors of the corporation, ipso facto justifying them. Questioning the legitimacy of plutocratic decisions is class warfare, pure and simple.

[nursel56]

Going by your way of thinking we should just shut down all colleges because Steve Jobs was successful without a college degree.

I don't think you have any idea what my way of thinking is, and that's just silly hyperbole. You made a blanket statement about the formal education of the average executive, when in reality formal education comes after the inherent personal characteristics of successful people. That was especially true in the past when access to formal education was more limited. I think people in general tend to ascribe traits to people they don't know that fall in line with their general political outlook, especially when they encounter a lot of people with opposing viewpoints in a discussion such as this one. It's somewhat idealistic to believe an executive, because he or she is an executive, possesses the characteristics you described. Just as all executives are not evil Jeffrey Skilling types either, thank God.

[Ruthfarmer]

CEO salaries are approved by the board of directors of the corporation, ipso facto justifying them. Questioning the legitimacy of plutocratic decisions is class warfare, pure and simple.

Bull Corn.

Having a wealthy class that controls a government is the definition of plutocracy. Generally speaking, those in power look out for only their own. THAT is class warfare.

Questioning the legitimacy of plutocratic decisions is absolutely NOT class warfare. It is a mechanism for survival.

Whether the "plutocracy" is running a government or a corporation, unreasonable or outrageous decisions must be questioned. Many plutocratic decisions are, in and of themselves, actions of class warfare.

[TheCommuter, BSN, RN]

Questioning the legitimacy of plutocratic decisions is absolutely NOT class warfare. It is a mechanism for survival.

I totally agree. More people need to start questioning authority and the decisions that they make. More people need to stop blindly obeying authority figures.

Authority does not automatically equal legitimacy.

[HM-8404, BSN, RN]

I don't think you have any idea what my way of thinking is, and that's just silly hyperbole. You made a blanket statement about the formal education of the average executive, when in reality formal education comes after the inherent personal characteristics of successful people. That was especially true in the past when access to formal education was more limited. I think people in general tend to ascribe traits to people they don't know that fall in line with their general political outlook, especially when they encounter a lot of people with opposing viewpoints in a discussion such as this one. It's somewhat idealistic to believe an executive, because he or she is an executive, possesses the characteristics you described. Just as all executives are not evil Jeffrey Skilling types either, thank God.

You used one person as an example of how it must not be that difficult to run a successful multi-billion dollar company. What I posted was silly hyperbole? I guess I could have corrected you by telling you that Steve Jobs founded Apple not Microsoft. That was Bill Gates.

[nursel56]

You used one person as an example of how it must not be that difficult to run a successful multi-billion dollar company. What I posted was silly hyperbole?

Going by your way of thinking we should just shut down all colleges because Steve Jobs was successful without a college degree.

Yeah. What would you call it?

I guess I could have corrected you by telling you that Steve Jobs founded Apple not Microsoft. That was Bill Gates.

Correct away! I try not to have my ego too invested in being right all the time.

[chuckster, ADN, BSN, RN, EMT-B]

CEO salaries are approved by the board of directors of the corporation, ipso facto justifying them. Questioning the legitimacy of plutocratic decisions is class warfare, pure and simple.

Just repeating what America hears everyday on the subject from the "fair and balanced" news organization. We need to support those "jobs creators" like the CEO's of the original posting. Only they, and their fellow plutocrats, know what is best for the hoi polloi. See also: Sarcasm - A tongue of which the user speaks of something the complete opposite of what the user means. It often has the best comedic value.

[kcmylorn]

I will add this- even as a nurse or especially because I am a nurse:

I am sick and tired of my hard earned tax dollars being thrown , given away to these healthcare systems to bail them out when one employee takes home a multimillion dollar paycheck.

I am sick an tired of being so short staffed because to that one employee's multimillion dollar paycheck.

I am sick and tired of that short staffing because that one employee takes home that multimillion dollar paycheck, my license is in jeapordy every time I go to work. .

I am sick an tired of having medical bills to payoff for 2-,3 and 4 years that are $9,000 and $7,000 from a family members stay at one of these fine 5 Star Poop Hotels because that one employee's paycheck and those of his/her/it's fellow CEO'shave driven healthcare so unaffordable. That $7,000 and $9,000 could have got me my BSN completion that those %Star poop hotel masters keep sqacking about and putting the ANA up to pushing. And to top it off- they are not going to pay us any more for that BSN designation.

This one employee's paycheck is such a dirty splat of embarassment on the face of health care and every licensed healthcare profession alive today. If these doofus board of mistrustees want to pay one sorry butt individual that kind of money - let it come out of their own personal households and own personal bank accounts. Let their families tighten their belts and scrimp for a while.!!!!!!!!!!!!!!!!!!!!!!

[Chiggysmom]

There are many components to the big picture.

Working dangerously short staffed creates life and limb threatening situations. When worse case scenarios occur, they can be disasterous for patients and their families. Let's just set the issue of needless human suffering aside. The financial cost to defend, litigate, and attempt to make these situations right is tremendous. These costs have to be met regardless of whether or not patients are paying their bills. In fact, if there are damages and a breach in the standard of care is evident, then the hospital is going to eat the cost of care any way.

My point is that no unit should be short staffed "due to the budget," if the budget provides for excessive and unreasonable compensation for the executives.

Amen! If the hospital needs to make up for lost money or anticipated budget shortfalls why do they take it out on the nurses and the patients? I agree whole heartedly, that if they're not making any sacrifces in their big salary's and other components of their compensation packages that also add up to big bucks why do they expect us to carry more of the burden than they're willing to carry?