The CEOs of some of the country's largest nonprofit health systems earned millions—even as hospitals' spending on charity care is on the decline.
FierceHealthcare reviewed tax filings for the 10 biggest nonprofit systems in the U.S. and found that all but one CEO took home more than $2 million in salary and other compensation in 2015. For some of the highest earners, a significantly large piece of their total compensation is outside of their base salaries.
Ascension CEO Anthony Tersigni took home the biggest payday among his peers at some of the largest nonprofit health systems, earning nearly $14 million in total compensation based on the company’s 2015 tax filings. A significant amount of Tersigni’s earnings were in incentives, bonuses, retirement and other additional compensation—his salary is a mere $1.6 million of the total pay.
The gap is even wider for Sutter Health CEO Patrick Fry, who departed the health system in January 2016. Fry earned about $13.4 million in 2015, with just $116,532 listed as salary.
Fry, notably, was also one of the highest earners among the executives at large health systems in a report by Axios, which broke down how much CEOs earned per overnight patient stay. Fry earned $6.88 per overnight patient stay, based on his 2017 compensation.
The trend didn’t hold for every CEO on the list, however. John Kutch, CEO of Trinity Health, earned just over $832,000 in 2015, with about $716,000 of that coming from his base salary.
Executive compensation in healthcare is on the rise, and though our report focuses on CEOs, chief executives may not always be a health system’s highest-paid leader, recent research suggests. “Emerging” C-suite roles, particularly those aimed at value-based care projects, could take home bigger paydays.
Tracking executives' rising salaries is crucial as hospitals cut back on other types of spending—notably, on charity care. A recent analysis from Politico found that hospitals' revenues reach new heights since the full rollout of the Affordable Care Act, increasing from $29.4 billion in 2013 to $33.9 billion in 2015. In that same window, charity care spending dropped from $414 million to $272 million.
Plenty of the biggest names in healthcare are expanding wealth in communities that continue to suffer from poor health, according to the report.
Hospitals in California requested to pay lower rates of charity care and were met with significant backlash. These providers argued that there weren't enough patients in need following the state's Medicaid expansion to meet the requirements.
The full breakdown of compensation is below:
Graphics by Eli Richman