Hospital, healthcare system pay on the rise

Pay at hospitals and health systems--particularly those larger in size--are going up at a fairly brisk pace, according to the latest compensation survey from SullivanCotter & Associates.

The firm surveyed more than 400 hospital systems and more than 1,300 standalone facilities, polling approximately 27,300 executives and managers to arrive at its conclusions.

Median base salaries rose 3.1 percent this year for executives at hospitals and health systems. But pay at systems rose 3.6 percent, while pay at hospitals rose only 2.6 percent. However, at larger hospitals with revenue above $300 million, the median base pay increased 3 percent. But the median total cash compensation--which includes bonuses and other pay outside of salary--climbed 6.9 percent. At health systems, it rose a median of 7.4 percent. 

"Health systems continue to embrace performance-based pay. This year, 28 percent more reported hitting their annual incentive targets, and these payouts contribute to the overall increase in total cash compensation," explained Tom Pavlik, a SullivanCotter managing principal, in a statement. Many hospital systems also use long-term incentive plans to compensate some of their senior managers.

Healthcare CEOs had the highest median compensation last year at $13.6 million. Most of that is in the payer realm, which leads the sector with an average compensation of $584,000. But hospital executives were second, averaging $386,000. Their pay is significantly higher than some specialty physicians such as surgeons, who have years more education and training.

However, some hospital executives receive eight-figure annual pay packages, which observers say could be the next "new normal" in compensation trends. For example, Ronald Del Mauro was paid nearly $22 million during his last year leading Barnabas Health, New Jersey's largest health system.

To learn more:
- purchase the survey results
- read the Sullivan Cotter statement