Not-for-Profit Hospital CEOs’ Compensation Not Tied to Outcomes
Compensation for CEOs at many not-for-profit hospitals tends to be calculated based on patient satisfaction scores, the use of advanced technology, the number of beds they have or the proximity of their hospital to urban areas, rather than on patient outcomes or care quality measures, according to a study published Monday in JAMA Internal Medicine, Reuters reports.
For the study, researchers from the Harvard School of Public Health analyzed tax returns, hospital survey results, performance metrics, spending records and the paychecks of 1,877 CEOs from 2,681 private not-for-profit hospitals (Pittman, Reuters, 10/14).
The researchers found that the CEOs' annual salaries ranged from just under $100,000 to more than $3 million. The average annual salary was about $600,000.
The study found that the CEOs were generally paid more when their hospitals:
- Had a higher number of beds;
- Received higher patient satisfaction scores; and
- Used more high-tech equipment, such as advanced imaging technologies.
CEOs at hospitals located in larger urban areas also received higher compensation.
However, there was no correlation between the executives' compensation and 30-day outcomes for patients with certain conditions -- such as heart attacks, heart failure or pneumonia -- that might have resulted in readmission or death, according to the study, AP/Sacramento Bee reports.
Researcher, Medical Professionals React
Harvard health policy professor and study co-author Ashish Jha said the results of his team's study were "a little disappointing," because hospitals' failure to hold CEOs accountable for patients outcomes "doesn't quite make sense" (Tanner, AP/Sacramento Bee, 10/14).
Jha said, "If you're going to ask doctors and nurses to be accountable, if you're going to ask patients to be accountable ... then I think we should make sure that everybody's in, and that senior managers of hospitals also have a stake in insuring high-quality care" (Reuters, 10/14).
Meanwhile, Warren Browner -- CEO of California Pacific Medical Center -- in a commentary published in JAMA Internal Medicine said that hospital CEOs could be compensated based on quality measures that the authors did not consider.
Browner added that using patient outcomes, death rates and readmissions could be misleading because of disparities in such rates among hospitals that typically treat higher numbers of very sick patients. He also noted that CEOs' salaries also might include incentives when their hospitals meet certain targets including financial performance and patient satisfaction.
Elizabeth Lietz -- a spokesperson for the American Hospital Association -- said that CEO compensation "is set by an impartial board of community representatives." Lietz said she believes the study "fails to fully capture the full range of responsibilities of today's health care leaders" (AP/Sacramento Bee, 10/14).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.