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Study: Nonprofit Hospital CEOs Earn $600K A Year

Tue, 10/15/2013 - 9:09am
Michelle Castillo

A new study shows that chief executive officers at non-profit hospitals make about $600,000 a year.

The salary findings, published in JAMA Internal Medicine on Oct. 14, were based on data from almost 2,700 hospitals.

The study authors wrote that prior to their research, not much information has been available on how much hospital CEOs are compensated.

They used 2009 tax forms filed by nonprofit hospitals to determine salaries. A total of 1,877 CEOs from 2,681 hospitals were included.

The CEOs were paid an average of $595,781 that year. Those that were working with small, non-teaching hospitals in rural areas made the least at a median of $117,933 a year. Those who were in larger, urban hospitals often linked to a teaching institution made a median salary of more than $1.6 million a year.

However, higher CEO compensation did not guarantee better medical care at these facilities.

More charity care (such as treating people without insurance), better financial performance or better process quality were not linked to increases in a CEO's compensation. Neither were mortality or readmission rates for common conditions researchers looked at including pneumonia, heart attacks and heart failure.

One factor that did play a role in higher compensation was higher patient satisfaction scores. Hospitals with more satisfied patients had higher paid CEOs. Hospitals with the most advanced technology were also correlated with CEOs who made the most money.

"Among the quality metrics we examined, only patient satisfaction was consistently associated with CEO compensation," the authors wrote.

Dr. Ashish Jha, a professor of health policy and management at the Harvard School of Public Health in Cambridge, Mass., told Reuters he was surprised at what factors were connected to higher pay.

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