Patient satisfaction, not quality, drives hospital CEO pay
10/22/2013 4:38 PM
10/22/2013 4:39 PM
It’s no surprise that the CEOs of large non-profit hospitals are well paid. But why are they paid an average of $600,000 per year? Are the executives rewarded for good financial results or good health outcomes?
According to a new Harvard study, it’s mainly about patient satisfaction. And there’s no apparent link to quality of care or readmission rates, even though Medicare and insurers are increasingly using those metrics to determine compensation to providers.
The study, published in JAMA, the Journal of the American Medical Association, examined 1.877 CEOs at 2,861 hospital.
Some of the findings were not surprising: the bigger the hospital, the higher the pay.
Chief executive officers at large urban teaching institutions are paid the highest – an average of $1.66 million. Higher pay is associated with patient satisfaction and more advanced technology.
The study found no relationship between CEO pay and
quality of care, or readmission rates (a key indication of quality).
the hospitals profitability, which in the nonprofit world is defined as excess revenue over expenses.
the community benefits required of these non-profit institutions. In return for not paying income and property taxes, non-profit hospitals must help their community with charity care for the poor and health care.
The authors suggested that hospital boards to make the links between CEO pay and hospital quality more explicit.
Join the Discussion
News & Observer is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere on the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.