Docs respond to soaring CEO pay

Healthcare CEO pay is skyrocketing, with the pay of the top 500 American executives tripling since the early 1990s. But how do doctors feel about these numbers, which vastly outweigh their own compensation?

"I don't criticize these incomes out of envy," Bernd Wollschlaeger, M.D., a solo family physician in North Miami Beach, Florida, told Medscape Multispecialty. "I don't need that much money. But it would be nice to be acknowledged for the work I do."

Only about half of all respondents in Medscape's most recent Physician Compensation Report believed they were fairly compensated, according to the article.

The primary difference between doctor and CEO compensation is that physician pay is based on Current Procedural Terminology (CPT) codes, whereas CEO compensation is much more at the discretion of the hospital. Although CEO pay might seem excessive, they achieve those salaries by making money for the hospital, Janice Boughton, a hospitalist in Moscow, Idaho, told Medscape.

Although CEO salaries are high across the board, some are particularly concerned about those of nonprofit hospital executives. Nonprofit hospitals receive the vast majority of donations to charities, and their CEOs have the highest pay levels among nonprofits, Ken Berger, chief executive of Charity Navigator, a service that assesses charities for donors, told Medscape in a second article. Even the Red Cross, which was billions in assets, pays its chief executives six-figure salaries, he told the publication.

Internal Revenue Service (IRS) rules cap nonprofit CEO compensation at a "reasonable compensation" level, and the IRS encourages nonprofits to hire outside consultants to decide what that means for the organization. But rather than keeping CEO pay on the low end, Berger said, "there is a kind of logrolling, where the pay scales get ever larger … Now that it has started, it's hard to break the pattern."

Defenders of high healthcare CEO pay say it comes down to performance, FierceHealthcare previously reported. "As their stocks are performing at very high levels, those [healthcare CEOs] are reaping the benefits," Kevin Scott, co-founder and CEO of the Addo Institute, told Business Insider.

To learn more:
- read the first part of Medscape's report (subscription may be required)
- here's the second part (subscription may be required)

 

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