HCA, Tenet make list of widest CEO-worker pay ratios

Hospital CEO pay continues to rise, outpacing overall healthcare spending in Massachusetts and, for major publicly traded hospitals, such as Tenet and Community Health Systems, ranking among the top 10 companies for CEO-worker pay disparity.

In Massachusetts, all Bay State hospital chief executives earned at least $1 million in compensation in 2013, with raises ranging from 4 percent to more than 70 percent, according to the Boston Globe. Meanwhile healthcare spending overall only increased 2.3 percent, according to the state Center for Health Information and Analysis.

The competitive nature of the senior healthcare executive field means hospital boards of directors must offer competitive pay, Edward P. Lawrence, Partners HealthCare's chairman of the board, told the Globe. In 2013, Partners' then-CEO Gary L. Gottlieb. M.D., received just under $2.6 million, a slight reduction, according to the article.

Boston Children's Hospital, meanwhile, paid its then-CEO James Mandell, M.D., nearly $2.4 million in 2013, when he retired. While this was a 60 percent increase from the previous year, much of the pay bump was due to retirement benefits, according to the article. Children's and Partners are among the highest-cost providers in Massachusetts, and officials from both hospitals told the Globe their CEO compensation is competitive with that of teaching hospitals nationwide.

Healthcare CEOs have the highest median pay of any industry, with an average of $13.6 million in 2014, according to FierceHealthPayer, and experts are concerned these compensation levels may create an incentive to increase the price of services.

Meanwhile, in a listing of the companies with the widest gulf between worker and chief executive pay, major healthcare providers Community Heaalth Systems (CHS), Universal Health Services, Tenet Healthcare and Hospital Corporation of America (HCA) all made the top 10, according to Bloomberg. CHS took the number two slot, with CEO Wayne Smith earning $26.44 million compared to the average worker's $63,837, a 414 to 1 ratio.

Tenet's Trevor Fetter, meanwhile, was paid $17.95 million to the average worker's $74,287, while HCA's R. Milton Johnson made $14.63 million compared to the average worker's $73,960. The companies disclosed these numbers in the wake of a recent Securities and Exchange Commission rule that requires publicly traded companies to publish them.

To learn more:
- here's the Globe article
- read the Bloomberg article

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