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.
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.
Sounds like it may just be hard to find Gov't workers who are not corrupt. A CEO in a private hospital answers to a board of directors, in a gov't position they answer to over worked, understaffed gov't employees who don't give a crap. Just the type of people I want in charge of my health care system. The same people that run the DMV, the IRS, the bankrupt post office, the extremely over budget military, and a whole host of others.
Yes, a CEO in a private hospital answers to a board of directors--- who are generally only interested in profit margins and dividends to be paid to stock holders. Private enterprises are in the business to make a profit. Which perfectly explains why governmental regulation is necessary to insure that businesses are conducted in such as way as to provide the services they are paid to provide and that they do it in ways that are fair and safe.
My local DMV is pretty efficient. There's nothing I can see corrupt there. Some DMV locations may be less efficient than others, but that's more than likely due to layoffs that have created staffing problems. A short-staffed office with fewer people working fewer hours are not going to provide the same level of service as a fully staffed office can. As long as corporations are not paying their fair share of taxes, there will be no way to fund agencies to the level that they can all provide adquate staffing to meet our expectations
As to the Post Office, it is completely self-funded. In 2006, Congress passed a law that requires the Post Office to pre-fund 80% of its projected retirement benefits well in advance. A portion of these benefits are for employees who haven't been hired yet. This is a burden that no other federal agency or even a Wall Street corporation is required to bear. This was strategically planned in order to create a budgetary crisis to cripple and then dismantle the post office. These would leave citizens at the mercy of private delivery services, with fewer choices for services that are already more expensive than the post office.
As to the "over budget military," the congress determines the federal budget. As long as greed and warmongering set the tone for policy, way too much money will be spent on military spending.
As I answer the points of your post, it occurs to me that you are buying into the FUD hype. Fear, uncertainty, and doubt. Certain mass media outlets serve no other purpose than to repeat key talking points solely intended to generate fear, uncertainty, and doubt. They seek to influence people to vote against their own best interests. In order to do so, they seek to make people resent government.
Personally, I like having clean water to drink, and safe foods to eat. I like having decent roads, highways, bridges, water systems and other forms of infrastructure. Just like public education and fire/police service, I think health care should be available to everyone. These are the sorts of things government should provide.
I was replying to the post about the "green eyed monster" CEO's that caused the closing of a certain gov't funded hospital.
The post office is RUN by the Federal Government. The 2006 law requires the post office to set aside money to cover health benefits of its retired workers. It fell $4B short in 2011 and the Feds are picking up the tab. That is tax money from the McDonald's cashier, who has no retirement plan, that is covering the retirement of a gov't worker.
All the services, roads, bridges, clean water, safe food, public education, police, and fire depts. are not funded by the government. They are funded by the taxpayers.
As for your statement about the congress setting the budget for the over budget military, thank you. You just repeated what I said. Military units are given a certain amount of money each year. If they don't use it they lose it the next year. Therefore they waste money like crazy so they will get the same amount the next year. While stationed aboard the USS Abraham Lincoln I saw the aircraft mechanics rolling huge toolboxes full of tools overboard about a day out of Virginia. I asked why and I was told so they could order more tools to use up their budget before the fiscal year ended.
It is my understanding that a CEO comes from a education backround of finance, business- the bachelors degree obtained in accounting, business managment, a comptroller, the move to the MBA- master's in business adminiatration. Very few have medical degrees and backgrounds or nursing degrees and backgrounds.
Moving on from that premise- how many 'business tract ' degree students had a course that was a nursing or medical clinical rotation? How many business degree majors either Bachelors level or master's level did a clinical rotation on a hospital unit, were acutally assigned a group of patients and was responsible for the care of those patients? I think the answer is "0". There- fore, they are clueless as to what patient care ACTUALLY is other than to link a patient to dollars and cents. They can only link a patient to a dollar bill because they have no other reference point to draw from. That CEO is clueless as to what quality and safe patient patient care is for starters. It doesn't matter how many "committes" these doofuses sit in on- they are not educationally prepared to even comprehend the subject matter.
They are not 'qualified' to be assigned to a patient, any patient, anywhere, anytime. The 'Health care" CEO is the perfect example of sticking an unqualified worker in a job they are not qualified to do. They are not educated on the basic subject matter- patient care. I think this is pretty obvious when the first place they look to slash the budget when funds are not rolling in and jeapordizing their multimillion dollar paydays is - doctors and nurses positions. They do this because they do not have any 'conceptualized" understanding of those positions. They have no base understanding of what patient care involves and have no training in patient care and therefore do not assimilate that knowledge and practice.
The only indicator they have is a patient satisfaction survey which is not an objective tool- it is full of likes and dislikes and subject to the whim and fancy of the patient, and patient "perception"- like voting on ice cream flavors- does one like vanilla or chocolate. Did you like your nurse, didn't you, did you like your doctor, didn't you. If you have a patient who thinks the nurse has all day to sit down with you, keep you company, hold your hand and pamper you like in the movies or on TV back in the 50's, 60's and 70's- then no - you didn't like your nurse. Same goes for your doctor- if the doctor didn't take hours with you like Marcus Welby, Ben Casey or Patch Adams- then the doctor was a rotten bum too!
The healthcare technologicals have far advanced but the CEO's and patient's 'perception' of the role and responsiblities of professional healthcare employee has not. The compensation for CEO's amist this healthcare reform climate is totally inappropriate and way out of proportion. It doesn't even make good business sense in our current trend of where health is going.
Bottom line- the CEO has no educational background to critically think about and make judgements on the healthcare needs of any patient. And it shows in their budget cutting of front line healthcare employees. The are overcompensated for the job they perform- they should be put back down in the finace dept where they belong- they are out of their league. Same goes for the board of directors and shareholders- let one of their wives or husbands or relative enter one of their pee poor hospitals where they wet or mess the bed, hit the floor, get the wrong med or no meds, or no linen changed or something is missed due to poor staffing- they will be singing a different tune. It's ok for the general public but not for the CEO princesses and princes.
It is my understanding that a CEO comes from a education backround of finance, business- the bachelors degree obtained in accounting, business managment, a comptroller, the move to the MBA- master's in business adminiatration. Very few have medical degrees and backgrounds or nursing degrees and backgrounds.
Moving on from that premise- how many 'business tract ' degree students had a course that was a nursing or medical clinical rotation? How many business degree majors either Bachelors level or master's level did a clinical rotation on a hospital unit, were acutally assigned a group of patients and was responsible for the care of those patients? I think the answer is "0". There- fore, they are clueless as to what patient care ACTUALLY is other than to link a patient to dollars and cents. They can only link a patient to a dollar bill because they have no other reference point to draw from. That CEO is clueless as to what quality and safe patient patient care is for starters. It doesn't matter how many "committes" these doofuses sit in on- they are not educationally prepared to even comprehend the subject matter.
They are not 'qualified' to be assigned to a patient, any patient, anywhere, anytime. The 'Health care" CEO is the perfect example of sticking an unqualified worker in a job they are not qualified to do. They are not educated on the basic subject matter- patient care. I think this is pretty obvious when the first place they look to slash the budget when funds are not rolling in and jeapordizing their multimillion dollar paydays is - doctors and nurses positions. They do this because they do not have any 'conceptualized" understanding of those positions. They have no base understanding of what patient care involves and have no training in patient care and therefore do not assimilate that knowledge and practice.
The only indicator they have is a patient satisfaction survey which is not an objective tool- it is full of likes and dislikes and subject to the whim and fancy of the patient, and patient "perception"- like voting on ice cream flavors- does one like vanilla or chocolate. Did you like your nurse, didn't you, did you like your doctor, didn't you. If you have a patient who thinks the nurse has all day to sit down with you, keep you company, hold your hand and pamper you like in the movies or on TV back in the 50's, 60's and 70's- then no - you didn't like your nurse. Same goes for your doctor- if the doctor didn't take hours with you like Marcus Welby, Ben Casey or Patch Adams- then the doctor was a rotten bum too!
The healthcare technologicals have far advanced but the CEO's and patient's 'perception' of the role and responsiblities of professional healthcare employee has not. The compensation for CEO's amist this healthcare reform climate is totally inappropriate and way out of proportion. It doesn't even make good business sense in our current trend of where health is going.
Bottom line- the CEO has no educational background to critically think about and make judgements on the healthcare needs of any patient. And it shows in their budget cutting of front line healthcare employees. The are overcompensated for the job they perform- they should be put back down in the finace dept where they belong- they are out of their league. Same goes for the board of directors and shareholders- let one of their wives or husbands or relative enter one of their pee poor hospitals where they wet or mess the bed, hit the floor, get the wrong med or no meds, or no linen changed or something is missed due to poor staffing- they will be singing a different tune. It's ok for the general public but not for the CEO princesses and princes.
It is my understanding that a CEO comes from a education backround of finance, business- the bachelors degree obtained in accounting, business managment, a comptroller, the move to the MBA- master's in business adminiatration. Very few have medical degrees and backgrounds or nursing degrees and backgrounds.
Moving on from that premise- how many 'business tract ' degree students had a course that was a nursing or medical clinical rotation? How many business degree majors either Bachelors level or master's level did a clinical rotation on a hospital unit, were acutally assigned a group of patients and was responsible for the care of those patients? I think the answer is "0". There- fore, they are clueless as to what patient care ACTUALLY is other than to link a patient to dollars and cents. They can only link a patient to a dollar bill because they have no other reference point to draw from. That CEO is clueless as to what quality and safe patient patient care is for starters. It doesn't matter how many "committes" these doofuses sit in on- they are not educationally prepared to even comprehend the subject matter.
They are not 'qualified' to be assigned to a patient, any patient, anywhere, anytime. The 'Health care" CEO is the perfect example of sticking an unqualified worker in a job they are not qualified to do. They are not educated on the basic subject matter- patient care. I think this is pretty obvious when the first place they look to slash the budget when funds are not rolling in and jeapordizing their multimillion dollar paydays is - doctors and nurses positions. They do this because they do not have any 'conceptualized" understanding of those positions. They have no base understanding of what patient care involves and have no training in patient care and therefore do not assimilate that knowledge and practice.
The only indicator they have is a patient satisfaction survey which is not an objective tool- it is full of likes and dislikes and subject to the whim and fancy of the patient, and patient "perception"- like voting on ice cream flavors- does one like vanilla or chocolate. Did you like your nurse, didn't you, did you like your doctor, didn't you. If you have a patient who thinks the nurse has all day to sit down with you, keep you company, hold your hand and pamper you like in the movies or on TV back in the 50's, 60's and 70's- then no - you didn't like your nurse. Same goes for your doctor- if the doctor didn't take hours with you like Marcus Welby, Ben Casey or Patch Adams- then the doctor was a rotten bum too!
The healthcare technologicals have far advanced but the CEO's and patient's 'perception' of the role and responsiblities of professional healthcare employee has not. The compensation for CEO's amist this healthcare reform climate is totally inappropriate and way out of proportion. It doesn't even make good business sense in our current trend of where health is going.
Bottom line- the CEO has no educational background to critically think about and make judgements on the healthcare needs of any patient. And it shows in their budget cutting of front line healthcare employees. The are overcompensated for the job they perform- they should be put back down in the finace dept where they belong- they are out of their league. Same goes for the board of directors and shareholders- let one of their wives or husbands or relative enter one of their pee poor hospitals where they wet or mess the bed, hit the floor, get the wrong med or no meds, or no linen changed or something is missed due to poor staffing- they will be singing a different tune. It's ok for the general public but not for the CEO princesses and princes.
A CEO is not hired to care for patients. They are hired to run a company, which is what they are educated and trained to do. Do you really think a nurse or a doctor has the ability to run a hospital? Patient care and running a company take two completely different skill sets. Do you also believe the CEO of Delta Airlines should not have that job because he cannot pilot a DC-10?
I would expect that some on running a health care institution know something of the subject matter they are ultimately making judgments on, not just 'generic' business. A CEO's decisions effects the lives of every patient that enters that place. yes, I would expect that the CEO of Delta know something about flying planes before they start making decisions about how much fuel not to have in the tank before thet plane full of people leaves the ground. Would you want to be a passenger on a Delta plane when the CEO decides that a plane can go across country on 1/2 the fuel it normally takes to do the trip because plane ticket sales are down? I tell you what- be the first on that "fuel economy" maiden voyage and let us all know how it turns out.
Why even have- people educated for nursing or medicine- why not just let anyone apply for the position of doctor or nurse- can save a whole lot of money that way. A GED comes into a hospital and applies to the opening for neurosurgeon, trauma surgeon, trauma nurse, ICU nurse- just think of the money that CEO can save!!
Not having any healthcare background experience and making healthcare decisions that effects the lives( and deaths) of so many people is very irresponsible not to mention careless, reckless endangerment.
The problem is that a hospital's primary goal is to make money. Achieving that goal does not necessarily coincide with giving good patient care.
CEOs know how to make money. And too often to do so, they are sacrificing patient care.
It's amazing how people are perfectly fine with the modern day BUSINESS of healthcare, UNTIL it's THEIR loved one in the hospital. When it's someone THEY care about, screw the budget, they want quality healthcare, not to pad the bottom line.
There's only so many healthcare dollars. As long as they're being used to line the pocketbooks of CEOs, CFOs, COOs, boards of directors, and stockholders, there's less money to spend on what SHOULD be the primary goal of a hospital, to provide quality patient care.
When it comes time for all of those VIPs to be patients, or for the VIPs' families to be patients, do you think at that moment they'd rather see a nice stock dividend instead of a safe nurse patient ratio?
Because it's quite surprising how much better staffing is when there's a VIP on the floor. All of the sudden we're willing to pay overtime to have an extra nurse come in.
It's greed and hypocrisy. That's what the business of healthcare is these days. And if you're fine with that, then I hope the next failure to rescue because of crappy dangerous staffing is YOUR loved one instead of mine.
I would expect that some on running a health care institution know something of the subject matter they are ultimately making judgments on, not just 'generic' business. A CEO's decisions effects the lives of every patient that enters that place. yes, I would expect that the CEO of Delta know something about flying planes before they start making decisions about how much fuel not to have in the tank before thet plane full of people leaves the ground. Would you want to be a passenger on a Delta plane when the CEO decides that a plane can go across country on 1/2 the fuel it normally takes to do the trip because plane ticket sales are down? I tell you what- be the first on that "fuel economy" maiden voyage and let us all know how it turns out.
Why even have- people educated for nursing or medicine- why not just let anyone apply for the position of doctor or nurse- can save a whole lot of money that way. A GED comes into a hospital and applies to the opening for neurosurgeon, trauma surgeon, trauma nurse, ICU nurse- just think of the money that CEO can save!!
Not having any healthcare background experience and making healthcare decisions that effects the lives( and deaths) of so many people is very irresponsible not to mention careless, reckless endangerment.
I see you now nothing about flying. THe FAA requires all planes, both commercial and private to have enough fuel to reach their destination plus an additional 45 mins of fuel during the day and 1 hour of fuel for night flights.
I would much rather work for a company that has a CEO that knows how to make or keep it successful. Because if I don't it is only a matter of time before I am looking for a job because the place went bankrupt.
A GED surgeon would not be much worse than an ADN trying to run a multi-billion dollar a year company.
I see you now nothing about flying. THe FAA requires all planes, both commercial and private to have enough fuel to reach their destination plus an additional 45 mins of fuel during the day and 1 hour of fuel for night flights.
And corrupt businesses have NEVER broken laws to save a few dollars or make a few dollars...
Specializes in Peds/outpatient FP,derm,allergy/private duty.
A CEO is not hired to care for patients. They are hired to run a company, which is what they are educated and trained to do. Do you really think a nurse or a doctor has the ability to run a hospital? Patient care and running a company take two completely different skill sets. Do you also believe the CEO of Delta Airlines should not have that job because he cannot pilot a DC-10?
As it happens, the most effective CEO I've ever worked under was an MD. In fact, he was a living example of how you can run healthcare as a business and with an understanding of the role of those who deliver the product. It really isn't all that unheard of for a professional who has a post-graduate degree in another discipline to get an MBA. My brother has a PhD in engineering and an MBA. I think you're aggrandizing the "skill set" to unrealistic proportions.
Jumping all over kcmylorn's fuel tank comment was just an exercise in missing the point but it's wonderful that you have specific knowledge about FAA rules and regulations.
I some how think there is a lot of LPN's and ADN's out there that could run a hospital a lot better than most of the MBA CEO's. AndThose hospitals would probably be alot more sucessful- because at least they would be providing safe quality patient care- which is what patient's will remember, not which ones have the CEO's with the biggest portfolios or biggest billboard add. There would probably be less lawsuites- because the patient's would get "Patient Care"!
HM-8404- could you share with us some of your clinical credentials/years of clinical hands on experience?
I some how think there is a lot of LPN's and ADN's out there that could run a hospital a lot better than most of the MBA CEO's. AndThose hospitals would probably be alot more sucessful- because at least they would be providing safe quality patient care- which is what patient's will remember, not which ones have the CEO's with the biggest portfolios or biggest billboard add. There would probably be less lawsuites- because the patient's would get "Patient Care"!
HM-8404- could you share with us some of your clinical credentials/years of clinical hands on experience?
I have 8 years experience as a Navy Corpsman, 5 of those was what is called an Independent Duty Corpsman. I started out working in military hospitals. After being in for 3 years I was chosen to attend school to become an IDC. Much of my training was at the UCLA Med. Center Trauma/Burn units. When I completed my training I worked with almost total autonomy. I did assessments, diagnoses, prescribed meds, sutures, minor surgery, etc. I worked where there was no doctor for hundreds of miles at times. There is not an MD in forward bases with Seabee's or Marines, on submarines, or every Navy ship. All of the medical care falls to Independent Duty Corpsmen. Actually,the job I held is why the PA exists today.
Prior to that I owned my own business. I know how much work is required to run a small business that generates 250K-300K in business a year. I can only imagine what would be involved in something as complex as a hospital. As an employee you leave your job at work, if you are smart. If someone else screws up it is really no sweat off your back. As CEO of a large company you are ultimately responsible for the actions of everyone on your payroll.
If you think an LPN or an ADN could run a hospital you are sorely mistaken. It takes years of experience working your way up the ladder to even get an interview for a CEO position. They don't hire a CEO straight out of college. I agree the patients may remember the great care they got at the hospital that was run by either the LPN or ADN. They would tell their friends how great the care was back before that hospital went bankrupt.
Ruthfarmer
153 Posts
Yes, a CEO in a private hospital answers to a board of directors--- who are generally only interested in profit margins and dividends to be paid to stock holders. Private enterprises are in the business to make a profit. Which perfectly explains why governmental regulation is necessary to insure that businesses are conducted in such as way as to provide the services they are paid to provide and that they do it in ways that are fair and safe.
My local DMV is pretty efficient. There's nothing I can see corrupt there. Some DMV locations may be less efficient than others, but that's more than likely due to layoffs that have created staffing problems. A short-staffed office with fewer people working fewer hours are not going to provide the same level of service as a fully staffed office can. As long as corporations are not paying their fair share of taxes, there will be no way to fund agencies to the level that they can all provide adquate staffing to meet our expectations
As to the Post Office, it is completely self-funded. In 2006, Congress passed a law that requires the Post Office to pre-fund 80% of its projected retirement benefits well in advance. A portion of these benefits are for employees who haven't been hired yet. This is a burden that no other federal agency or even a Wall Street corporation is required to bear. This was strategically planned in order to create a budgetary crisis to cripple and then dismantle the post office. These would leave citizens at the mercy of private delivery services, with fewer choices for services that are already more expensive than the post office.
As to the "over budget military," the congress determines the federal budget. As long as greed and warmongering set the tone for policy, way too much money will be spent on military spending.
As I answer the points of your post, it occurs to me that you are buying into the FUD hype. Fear, uncertainty, and doubt. Certain mass media outlets serve no other purpose than to repeat key talking points solely intended to generate fear, uncertainty, and doubt. They seek to influence people to vote against their own best interests. In order to do so, they seek to make people resent government.
Personally, I like having clean water to drink, and safe foods to eat. I like having decent roads, highways, bridges, water systems and other forms of infrastructure. Just like public education and fire/police service, I think health care should be available to everyone. These are the sorts of things government should provide.
[h=3][/h]