Wednesday, March 7, 2007

Hospitals and Doctors - Hospital CEO Pay – Compared to What?

Paul Levy, CEO of Beth Israel Hospital in Boston, started his blog, “Running a Hospital” in August 2006. Levy’s blog is a free-wheeling, snappy, insightful commentary on hospitals, health care, and medicine.

His January 28 entry, “Do I Get Paid Too Much?” received 23 responses-- huge in the blogosphere. Levy’s annual $1 million pay incensed a few physician responders.

In an American Medical News interview, Levy defends his pay by saying the hospital board determines his annual salary, and besides, his pay is at the lower end of hospital CEO pay for non-profit hospitals in Massachusetts (Dolan, Pamela, “Do I Get Paid Too Much,? Hospital CEO Raises the Question. The Blogosphere Chimes in with Opinions,” American Medical News, page 18, March 5, 2007.)

Table 1 - Executive Pay for Massachusetts Hospital CEOs

1. James Mongan, MD, Partners Healthcare, $2.1 million
2. Elaine Ullian, Boston Medical Center, $1.4 million
3. John O’Brien, UMass Memorial Medical Center, $1.3 million
4. David Barrett, MD, Lahey Clinic, $1.3 million
5. Mark Tolosky, Baystate Health, $1.2 million
6. James Mandell, MD, Children’s Hospital, Boston, $1.1 million
7. Gary Gottlieb, Brigham and Women’s Hospital, $1 million
8. Peter Slavind, MD, Massachusetts General Hospital, $1 million

Source: “Hospital CEO’s Join the $1M Club,” Boston Globe, August 21, 2006. ). Please note that ½ of these CEOs are MDs. Some responders complaining the most were MDs. They may not be aware growing numbers of hospital CEOs are doctors.

Levy’s blog inspired the title for this blog “Hospital CEO Pay – Compared to What?” In America’s capitalistic culture, CEOs are generally paid for the size, scope, and revenues of enterprises they lead. They are also paid salaries comparable to other CEOs. Many of America’s 5000 hospitals have revenues exceeding $100 million, and some large hospital systems these revenues top $1 billion. What is the CEO worth who runs these hospitals, often the largest employers in any given community? Some people consider health care jobs as a sacred duty, immune from the laws of economy gravity, and protest that even highly trained professionals should work for a pittance. I am not one of these people.

In any event, I decided to have a stab at answering “ Hospital CEO Pay: Compared to What?

I started with the MGMA 2006 survey of physicians’ compensation. The survey is misleading in that it simply lists the compensation for “all physicians” in a given specialty. Undoubtedly, those at the top of the specialists’ compensation heap make considerably more, some $1 million or more.

Table 2 – Compensation for “All Physicians” in Selected Specialties, MGMA 2006 Compensation Survey

1. Orthopedic, spinal surgery, $554,000
2. Neurosurgery, $476,000
3. Heart surgeons, $470,000
4. Diagnostic radiology, Interventional, $424,000
5. Sports Medicine, surgery, $417,000
6. Orthopedic Surgery, $400,000
7. Radiology, non-interventional, $400,000
8. Cardiology, $363,000
9. Vascular surgery, $354,000
10. Urology, $349

Source: 2006 MGMA Physician Compensation Survey

Then I proceeded to find what Health Plan CEO executives are paid. Last year news came out that William McQuire, MD, CEO of United Healthcare Group, had fudged by post-dating $1.6 billion in deferred compensation. This billion dollar number created such a flap that McQuire was ousted from this job.

I found the following information in a AIS (Atlantic Information Service) newsletter. This is compiled from company proxy statements and may be the tip of the iceberg because it does not include delayed compensation.

Figure 3 --2005 Total Annual Compensation for Publicly Traded Managed Care CEOs, Total includes annual salary, bonuses, and other annual compensation, but not deferred compensation

1. United Health Care $8.3 million
2. Wellpoint, Inc, $5.2 million
3. CIGNA, $4.7 million
4. Sierra Health, $3.4 million
5. Aetna, Inc, $3.3 million
6. Assurant, Inc, $2.3 million
7. Humana, $1.9 million
8. Health Net, $1.7 million

Source: Atlantic Information Services, compiled from company proxy statements. Reprinted from the April 24, 2006, issue of Managed Care Week, a leading source of business, financial and regulatory news of health plans, PPOs, and POS plans.

From Forbes Magazine, here are the top ten compensations for American corporate CEOs, which makes health care compensations pale in comparison.

Figure 4 --Top Corporate CEO Compensation

1. Capital One Financial, $249 million
2. Yahoo, $231 million
3. Cedant, $140 million
4. KB Home, $135 million
5. Lehman Brothers Holdings, $123 million
6. Occidental Petroleum,, $81 million
7. Oracle, $75 million
8. Symantec, $72 million
9. Caremark Rx, $70 million
10. Countrywide Financial, $69 million

Source: Special Report, CEO Compensation, Forbes, May 20, 2006

Finally, here is Forbes 2006 list of the world’s top ten billionaires – not a U.S, hospital CEO or U.S, physician in the bunch I regret to say.

Figure 5- Forbes list of worlds top ten billionaires

1. William Gates III, Microsoft, $50 billion
2. Warren Buffett, Berkshire Hathaway, $42 billion
3. Carlus Slim Helu, Telecom, , $30 billion
4. Inguar Kasmpral, Ikea, $28 billion
5. Lakshoni Mittel, Steel, $23.5 billion
6. Paul Allen, Software, $22.0 billion
7. Bernard Arault, LVMH, $21.5 billion
8. Prince Alwaleed Bin Talal, $20.9 billion
9. Kenneth Thomson and Family Publishing, $19.5 billion
10. Li Ka-Shing, Self-Made, $18.8 billion

Source: Forbes Magazine, “The World’s Billionaires,” March 9, 2006

What’s “fair” about these high incomes in various economic sectors resides in the mind of the beholder. If you’re in health care, corporate CEO’s high pay may strike you as an abomination. If you’re a corporate CEO, you may say, “The board sets my salary. Anyway, that’s the way we pay the game in Corporate America.” If you’re a self-made billionaire, you may say,“ I did it my way.”

Hospital CEO and physician pay reflect American culture, our free-enterprise capitalistic system, and what it is willing to pay its corporate, health, and physician leaders. Government, or the health industry, could, of course, attempt to regulate pay of health care leaders and downgrade incomes, but that is unlikely to happen.

As far as the fairness of pay to health plans, hospitals, and physicians, and whether its leaders should be paid less because they are in sacrosanct health care fields, it may come down to that old saying, “When they say it’s the principle, and not the money, it’s the money.” When I look at the comparative numbers, I wonder if hospital CEOs and doctors are paid enough.

The purpose of this blog has not been to flog hospital CEO’s pay, but to put that pay in context.


Generic Viagra said...

Many people say that USA has the most ruthless medical system in the world, I am not sure about it, excellent interview

Anonymous said...

Very nice post. I just stumbled upon your blog and wished to mention
that I've truly loved surfing around your weblog posts. After all I'll be subscribing on your feed and I hope
you write once more very soon!

Here is my homepage; Click Here

Anonymous said...

For the reason that the admin of this web page is working, no doubt very soon it will be famous,
due to its quality contents.

My web page: Visit website

Anonymous said...

Hi to all, the contents present at this website are
really awesome for people knowledge, well, keep up the nice work fellows.

My web site :: adventure sports Photography Gauteng

Anonymous said...

Howdy, I believe your blog could possibly be having browser compatibility problems.
When I look at your blog in Safari, it looks fine but when opening in I.
E., it has some overlapping issues. I just wanted to provide you with a quick heads up!
Other than that, fantastic site!

Feel free to visit my site ... scrap my car Leeds

Anonymous said...

Wow, this piece of writing is fastidious, my younger sister
is analyzing these things, thus I am going to tell her.

my web page jumping castles for sale Gauteng

Anonymous said...

Excellent blog! Do you have any suggestions for aspiring writers?
I'm hoping to start my own website soon but I'm a little
lost on everything. Would you propose starting with
a free platform like Wordpress or go for a paid option?
There are so many options out there that I'm completely overwhelmed .. Any suggestions? Thanks!

Here is my webpage - professional hair care KwaZulu Natal professional hair care KwaZulu Natal

Anonymous said...

Touche. Solid arguments. Keep up the great spirit.

Check out my blog post ... fresh flowers Gauteng

Anonymous said...

I am no longer certain where you are getting your info, however good topic.
I needs to spend some time learning more or figuring out more.

Thanks for excellent information I used to be
searching for this info for my mission.

Here is my homepage - website

Anonymous said...

Fastidious response in return of this question with solid arguments and explaining the whole thing about that.

Feel free to surf to my weblog; landscaping garden design Cape Town

Anonymous said...

Your method of explaining all in this post is in fact pleasant, all can easily understand it, Thanks a lot.

Here is my website suppliers of gym equipment Johannesburg gym equipment Johannesburg

Anonymous said...

I blog frequently and I truly thank you for your
content. This article has really peaked my interest. I will book mark your
site and keep checking for new information about once a week.
I opted in for your RSS feed too.

Look at my website: click here

Anonymous said...

Hello, everything is going perfectly here and ofcourse every one
is sharing information, that's really fine, keep up writing.

Feel free to visit my web blog ... litho printing Gauteng

Anonymous said...

This piece of writing provides clear idea for the new users of blogging, that really how to do running a blog.

my web blog: lipo laser South Africa

Anonymous said...

I want to to thank you for this great read!! I absolutely enjoyed
every bit of it. I've got you book-marked to check out new things you post…

my blog post; collapsible gas cylinder cages gauteng collapsible gas cylinder cages gauteng

Anonymous said...

Wow, wonderful weblog format! How long have you been running a blog for?

you make running a blog glance easy. The overall look of your
web site is excellent, as well as the content material!

Review my webpage :: dstv installation in Cape Town

Anonymous said...

It is appropriate time to make some plans for the long run and it's time to be happy. I have learn this submit and if I may just I wish to recommend you few fascinating things or advice. Perhaps you could write next articles referring to this article. I want to learn even more things about it!

Also visit my weblog: cms website design Cape Town

Anonymous said...

I do not know whether it's just me or if perhaps everybody else encountering issues with your website. It seems like some of the written text within your posts are running off the screen. Can someone else please provide feedback and let me know if this is happening to them as well? This may be a problem with my browser because I've
had this happen before. Cheers

My site: plumbing Sandton

Anonymous said...

Pretty! This has been an extremely wonderful article. Thanks for supplying
this info.

Here is my blog post - weight control Johannesburg

Anonymous said...

I have read so many articles or reviews on the topic of the blogger lovers
but this piece of writing is actually a pleasant post,
keep it up.

Review my weblog signage Gauteng

Anonymous said...

This design is steller! You most certainly know how to keep a reader entertained.
Between your wit and your videos, I was almost moved to start my own blog (well,
almost...HaHa!) Excellent job. I really loved what you had
to say, and more than that, how you presented it.
Too cool!

my web-site - hogroasts Norfolk

Anonymous said...

Greetings! I know this is somewhat off topic but
I was wondering which blog platform are you
using for this website? I'm getting tired of Wordpress because I've had
issues with hackers and I'm looking at options for another platform. I would be awesome if you could point me in the direction of a good platform.

Take a look at my web site: Mattress cleaning Mpumalanga

Anonymous said...

Hi! Quick question that's totally off topic. Do you know how to make your site mobile friendly? My blog looks weird when viewing from my iphone4. I'm trying to find
a theme or plugin that might be able to resolve this issue.

If you have any recommendations, please share. With thanks!

Take a look at my web-site website link

Anonymous said...

Hi! Dо you use Τwitter? I'd like to follow you if that would be okay. I'm unԁoubtedly еnjoуing уοur blog аnd looκ forwaгd to new posts.

My web blog ... premature ejaculation pills

Anonymous said...

geotorelxz loan consolidation
debt consolidation services
loan rates

Anonymous said...

Hi there to every single one, it's genuinely a good for me to pay a visit this site, it contains precious Information.

my web page registry cleaners

Anonymous said...

Great goods from you, man. I have take into account your stuff prior
to and you're just extremely excellent. I actually like what you have acquired here, certainly like what you're stating and the way in which
wherein you are saying it. You make it entertaining and
you still care for to stay it sensible. I can't wait to read much more from you. That is actually a great website.

My blog - calories walking

Anonymous said...

Hello i am kavin, its my first time to commenting anyplace, when i read this article i thought i could also
create comment due to this sensible paragraph.

Feel free to visit my blog - Diet Plans that Work

Anonymous said...

I really like your blog.. very nice colors & theme.

Did you design this website yourself or did you hire someone to do it for you?
Plz answer back as I'm looking to create my own blog and would like to find out where u got this from. cheers

Here is my web blog: health

Anonymous said...

Hi there every one, here every one is sharing such knowledge, so it's fastidious to read this blog, and I used to pay a visit this weblog everyday.

my web-site :: Homepage **

Anonymous said...

Great post. We at Mawe Consulting specialize in providing affordable and reliable IT related products and services.For more information click here

Thabang Motlou said...

Cheers to the author for touching on such a complex topic in the best way i could ever imagine.

Anonymous said...

Wow, how many times can one get lucky in a single day? Well, lucky me I got lucky twice today, first I came across this awesome radio app on Google Play and now I am reading this lovely post. I am so blessed and so are you. said...

Thanks for the lovely blog post, it is really inspriring said...

Nice post. said...

I love it

Tubidy MP3 - Tubidy Music said...

Lovely article, accompanied by great FREE MP3 music from Tubidy: streaming and dowlaoding the best hits and enjoying dancing to them with my little Angel

Amapiano Songs 2021 said...

Amapiano is one of the world's fastest growing electronic music genres, it is originally from South Africa, but it has gained a significant global following over the past few years.

Internet Radio UK said...

Internet Radio UK, the United Kingdom's best & most reliable internet radio & podcast player , featuring over 1,600 UK radio stations, as well as all the popular global & UK podcasts.

Unknown said...

loving this article, while enjoying good music in the background, all thanks to Mp3 Juice for Android tracks of 2021:
This is a safe and free Mp3 Juice Music Downloader, see Exodus Report:

tubidy mp3 said...

good music on a chilled sunday