Independent hospitals pay CEOs more than health systems

Chief executive officers (CEO) in independent hospitals earn more than CEOs in integrated health systems, according to a healthcare compensation study released yesterday by consulting firm, the Hay Group .

In its 28th annual report, Hay Group researchers looked at data from 109 systems and 1,188 hospitals. They found that CEOs in independent hospitals (those not affiliated with larger systems) benefited the most, compared to larger integrated health systems. In 2011, hospital CEOs received 5 percent more in median base salary than in the previous year, compared to health system CEOs who received a 4 percent increase.

The difference is even more pronounced in total cash compensation, that is, base salary and annual incentives. Hospital CEOs received a 6 percent increase, a change of almost twice as much as health system CEOs who received only a 3.1 percent increase.

 

Independent hospital

Integrated health system

CEO

6% increase (base salary plus incentives)

3.1% increase (base salary plus incentives)

CEO

5% increase (median base salary)

4% increase (median base salary)

Employees

2.3% increase (median base salary)

3% increase (median base salary)

However, the CEO income trend didn't translate to overall employees. While CEOs benefited the most in independent hospitals compared to integrated health systems, hospital employees saw a 2.3 percent increase in median base salary, compared to a 3 percent increase in health system positions.

"Economic uncertainty has forced boards and human resource departments to invest more to attract and retain leaders who can execute in this challenging environment," said Ron Seifert, vice president and executive compensation practice leader for Hay Group's healthcare sector, in a press release yesterday. "Leaders who have the fortitude and competencies to lead complex organizations through complex times will be at a premium, and boards have become aware of that."

For more:
- read the Hay Group press release

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