Top-earning CEO receives $10M at Northwestern Memorial

Ten million dollars: That's how much Northwestern Memorial HealthCare CEO Dean Harrison made in 2010, ranking as the highest-paid hospital chief exec in Chicago, according to Crain's Chicago Business. Harrison made nearly three times the amount of his $3.9 million compensation in 2009 because of a one-time special payment, that is, the vesting of a $7.5-million payment to his supplemental executive retirement plan.

Harrison's paycheck, like many other hospital CEOs, draws increasing scrutiny of executive compensation at nonprofit hospitals. Nationally, CEOs of nonprofit hospitals are earning more these days, Crain's notes.

"There's an enormous sense of self-entitlement among CEOs," Alan Sager, a professor of health policy and management at Boston University, said in the article. "It started in the for-profit corporate sector, but it has sloshed over into the non-profit hospital world."

Northwestern Memorial may ring a bell to many skeptics of the tax-exempt status. In August, Northwestern Memorial came under fire when the Illinois Department of Revenue denied its Prentice Women's Hospital--along with other area hospitals--exemption from property taxes, arguing that it didn't provide enough charity care. Now, the health system has increased its spending on charity care from 1.85 percent of net patient revenue to 3.0 percent, according to the article.

With increasing cuts to healthcare funds, as well as national and state health programs, hospital CEO paychecks and organizations' nonprofit status are likely to continue to be under the microscope of public scrutiny.

For more information:
- read the Crain's Chicago Business article (reg. req.)
- check out FierceHealthFinance's special report, "Are nonprofit hospital execs paid too much? Seven 7-figure paychecks"

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