Hospital CEO pay

How much are hospital CEOs getting paid? A paper by Mulligan et al. (2020) provides the answer:

Between 2010 and 2015, mean hospital CEO compensation (in 2015 US$…) increased 7.8%, from approximately $639,000 to $689,000 (p = .05), and median compensation increased from $431,000 to $464,000.

Not surprisingly, CEOs of larger hospitals systems get paid more.

For all institutions, higher revenues are associated with higher CEO compensation, and for hospitals a 10% increase in revenues results in a 2.4% increase in CEO compensation

Additionally, compensation varies dramatically across states. Even after controlling for hospital revenue, the study found that:

predicted average state-level hospital CEO compensation is highly variable, ranging from 60% below the national median (Utah) to 79% above the national median (New Jersey).

However, hospital CEOs make far less then CEOs in the health care industry. While hospital CEOs made $689,000 in 2015, CEOs at non-health publicly traded companies made $6.7 million and those at publicly traded health care companies made $8.3 million.

These trends persist even after adjusting for differences in company revenues.

A CEO at a hospital with median revenues in 2015 would earn approximately $704,000. In contrast, a CEO at a publicly traded health care (other) institution with the same revenues is predicted to earn $3.2 ($1.7) million, or 4.5 times as much as a CEO at a hospital. Predicted
compensation is lowest ($406,000) for CEOs at institutions of higher education;

In short, hospital CEOs are not going to the poor house anytime soon, but they are paid far less than CEOs of both health and non-health publicly-traded companies.

Source:

• Mulligan K, Choksy S, Ishitani C, Romley JA. New Evidence on the Compensation of Chief Executive Officers at Nonprofit US Hospitals. Medical Care Research and Review. 2020 Oct;77(5):498-506.

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