A new metric used to determine the highest-paid hospital CEOs based on patient days is “uninformed and unreliable,” said the American Hospital Association.
AHA CEO Rick Pollack responded to healthcare journalist Steven Brill’s recent Axios report that correlated CEO compensation to patient days, which he says is “short-sighted.” The publication printed Pollack’s statement in full, as well as a response from Brill.
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Pollack states that CEO compensation for tax-exempt hospital system execs is determined by individuals who have no conflict of interest and who are charged with protecting the best interest of the system and the community it serves. Furthermore, he writes that trying to tie compensation to inpatient volumes doesn’t take into account that “hospital systems are much more than the sum of their inpatient beds.“
Pollack says that hospital systems are complex and often include skilled care facilities and community outposts to provide access to care in their communities.
Brill responded to Pollack’s concerns, noting that while patient days isn’t a perfect measure, it’s a good relative measure. But he notes Pollack didn’t explain why when using that measure the CEOs of Greenwich Hospital and Cedars earned so much more than the CEOs of Mayo or the Cleveland Clinic.
Vin Petrini, senior vice president of public affairs at Yale New Haven Health, may have an explanation, however. In a letter to the editor to Becker’s Hospital Review last week, he wrote that Brill’s methodology misrepresented the 2015 salary of Norman Roth, the CEO of Greenwich Hospital, a part of the Yale New Haven Health System. Brill determined that Roth earned $56 for each patient night stay, based on his annual salary and bonus of $2.9 million and the 184 beds he supervised.
But Petrini said Roth didn’t earn a salary of $2.9 million, but he did pay taxes on the deferred income for his retirement account, which reflected his savings over his 36-year career at the organization. His actual salary was $775,000, according to Petrini.