Pay of hospital CEOs comes under fire

Hospitals are continuing to pay their top executives hefty salaries as the recession lingers and state legislatures continue deep cuts to Medicaid, sparking much criticism. In California, the latest salvo came from the Los Angeles Times, which reports that hospital district CEOs are among the highest-paid public officials in the state, with at least three earning more than $1 million a year. Californians have been irate over public sector salaries for a while now, fed in part by a new salary survey and database released last week by the state controller.

On the East Coast, public complaints have been just as loud. Just two weeks ago, the New York Times reported that top hospital execs at Bronx-Lebanon and New York Presbyterian each earned about $3 million per year in 2008. Efforts to cap or cut those salaries have been underway over the past months, but gained little traction, notes the Times.  

In Washington state, however, an investigative reporter for KOUW radio unearthed a tax law that requires the state to verify that their top hospital salaries are comparable to private-sector pay, or possibly lose their tax-exempt status. The reporter, John Ryan, indicates that many state hospital CEO salaries don't meet the requirement, with at least 15 making $1 million or more per year. The reporter also created a "how-to" guide for journalists, encouraging them to dig into their own state records and create similar reports.

Hospital officials have fired back, telling the LA Times they could make a great deal more in the private sector, and that their compensation, while high compared to some other state workers, doesn't equate to the high-pressure, high-stakes job they do. And it's not just California CEOs who would disagree. Just last week, at the American College of Healthcare Executives annual meeting in Chicago, FierceHealthFinance noted that an informal poll showed 52 percent of attendees at one session believed they were underpaid.

But the bullets keep flying. Health Beat blogger Maggie Mahar dug up a 2009 study by the University of Connecticut School of Business that showed hospitals that provide more charity care actually pay their CEOs less, while hospitals that provide less care for indigent patients pay their CEOs more. That's the kind of ammunition that could draw blood, down the line.

For more:
- read the Los Angeles Times article
- read the Covering Health blog post
- check out the Health Beat blog post
- here's the New York Times article