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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[jo_ER_Nurse]

I'd like to see CEO salary information made available to all staff and volunteers

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.

[TheCommuter, BSN, RN]

I'd like to see CEO salary information made available to all staff and volunteers

That's an excellent idea, as it would bestow more financial transparency onto the organization. Transparency is a good thing, even if it causes more public scrutiny regarding the CEO's bloated salary and compensation package.

[wooh, BSN, RN]

Our CEO's salary was in a newspaper article (about nonprofit hospital CEOs' salaries) at the same time they told us they couldn't give us any raise at all because of the economy. It was FABULOUS timing.

[kcmylorn]

Commuter- fantastic idea: Financial transparency:yeah::cheers: Yah. baby!!

[SE_BSN_RN, BSN]

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.

I'm sorry, but I totally disagree. You can't possibly justify to me how in the world a CEO deserves millions of dollars a year. The budget would be sufficient enough if the CEO didn't get paid millions of dollars a year. They aren't the ones to take a pay cut when money gets tight. If anything, they get MORE. You can't tell me that CEO's are fully responsible for the duties you list here. That's what HR and admissions coordinators are for.

[SE_BSN_RN, BSN]

Our CEO's salary was in a newspaper article (about nonprofit hospital CEOs' salaries) at the same time they told us they couldn't give us any raise at all because of the economy. It was FABULOUS timing.

So when all this came out, did you get a raise?? That's awesome that the salary comes out when they say no raise!!

[wooh, BSN, RN]

So when all this came out, did you get a raise?? That's awesome that the salary comes out when they say no raise!!

Nope. They did warn us that we'd better maintain our clinical ladder responsibilities or we'd get our pay cut though!

[HM-8404, BSN, RN]

I'm sorry, but I totally disagree. You can't possibly justify to me how in the world a CEO deserves millions of dollars a year. The budget would be sufficient enough if the CEO didn't get paid millions of dollars a year. They aren't the ones to take a pay cut when money gets tight. If anything, they get MORE. You can't tell me that CEO's are fully responsible for the duties you list here. That's what HR and admissions coordinators are for.

In the local teaching hospital near where I live a nurse manager makes little over $100,000 a year where a floor nurse makes $20-$30 an hr. She is managing approx 40 people. Would you consider she is overpaid also? This hospital is the largest in the state. It has almost 1000 beds. I'll let you figure out how many people the CEO manages.

[SE_BSN_RN, BSN]

Nope. They did warn us that we'd better maintain our clinical ladder responsibilities or we'd get our pay cut though!

Wow. That's awful. Nice threat, huh?

[SE_BSN_RN, BSN]

In the local teaching hospital near where I live a nurse manager makes little over $100,000 a year where a floor nurse makes $20-$30 an hr. She is managing approx 40 people. Would you consider she is overpaid also? This hospital is the largest in the state. It has almost 1000 beds. I'll let you figure out how many people the CEO manages.

Yes, I do. Does she just "manage" from a desk, or does she get out on the floor and work? Is she visible to offer help and teaching students, also? What is her management style?

Do YOU think her pay is justified compared to yours? You didn't say if you were a staff nurse, or a manager, but sounds like you think her and a CEO's pay is justified. Which is ok, that's your opinion. But, to me, working both sides, I still think staff is underpaid and many work in unsafe conditions. Most CEO's could care less if staff works unsafe. They get paid, regardless. Staff just gets fired. When I worked in management, my floor staff got paid more than me. I am fine with that. My responsibilities were not such that my pay should have been 100K a year. And I had a lot of responsibility! I didn't do the job for the money, I did it because I loved it. But I also only worked at 110 bed facility. More beds=more staff. At least IMHO.

[HM-8404, BSN, RN]

Yes, I do. Does she just "manage" from a desk, or does she get out on the floor and work? Is she visible to offer help and teaching students, also? What is her management style?

Do YOU think her pay is justified compared to yours? You didn't say if you were a staff nurse, or a manager, but sounds like you think her and a CEO's pay is justified. Which is ok, that's your opinion. But, to me, working both sides, I still think staff is underpaid and many work in unsafe conditions. Most CEO's could care less if staff works unsafe. They get paid, regardless. Staff just gets fired. When I worked in management, my floor staff got paid more than me. I am fine with that. My responsibilities were not such that my pay should have been 100K a year. And I had a lot of responsibility! I didn't do the job for the money, I did it because I loved it. But I also only worked at 110 bed facility. More beds=more staff. At least IMHO.

I have no idea what her management style is. She is my fiancé. I do know she is pretty much on call 24/7. I am all for people making as much money as they can legally. If someone lands a job that pays $100K or $100M, good for them.

[SC_RNDude]

CEO pay is based on the market for CEO's. For your company, you need to pay a good CEO what a good CEO is worth. If healthcare CEO's are paid lower then other industries, where are the better CEO's going to end up?

The pay of your CEO has no effect on your pay. They are going to pay a RN what a RN is worth in the market regardless of what the CEO is paid. Some places will pay more to attract and/or keep RN"s. Others pay less and are willing to keep replacing experienced RN's when they leave for greener pastures.

As far as staffing being short, not enough equipment, etc. I place the blame on nurse managers more then CEO's. They are the ones who have the knowledge on both the clinical and business side of things, and they are the ones who report up the chain. Many of them are satisfied with working with what they have in hopes of bonuses, promotions, etc. rather then get more resources to make patient care better.