Why do hospital executives get paid so much?

[Mt Kilimanjaro]

Actually curious. Anyone seen analysis of this topic? Please share.

Mostly thinking of your run of the mill non-profit hospital with a CEO making several million a year.

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[deleted393595]

Actually curious. Anyone seen analysis of this topic? Please share.

Mostly thinking of your run of the mill non-profit hospital with a CEO making several million a year.

That's far and few. I think the top echelon is about ~700Kish only with a few above that.

 

[calvnandhobbs68]

Yeah I mean look at this policy report from New Hampshire.

http://www.nhpolicy.org/reports/hospitalceo_final01.pdf

Most salaries fall between 300 to 700K...not exactly out of range for someone managing a large organization.

National median for nonprofit hospitals with budgets over 50 million is 533K.

http://www.chicagobusiness.com/arti...pital-ceos-are-among-the-nations-highest-paid

 

[Dbate]

Actually curious. Anyone seen analysis of this topic? Please share.

Mostly thinking of your run of the mill non-profit hospital with a CEO making several million a year.

Healthcare is a lucrative and competitive industry and often times to retain top talent, you have to pay them market rates.

Unlike many pre-meds, students who go into pretty much every other field are mostly focused on maximizing income--especially business executives.

So if hospitals didn't pay them premium rates, then they would go work somewhere else. And the hospital would have inferior leadership as a result.

 

[Mt Kilimanjaro]

Yeah I mean look at this policy report from New Hampshire.

http://www.nhpolicy.org/reports/hospitalceo_final01.pdf

Most salaries fall between 300 to 700K...not exactly out of range for someone managing a large organization.

National median for nonprofit hospitals with budgets over 50 million is 533K.

http://www.chicagobusiness.com/arti...pital-ceos-are-among-the-nations-highest-paid

Thanks. I guess I was way high. This makes more sense.

 

[whatbout2morrow]

Healthcare is a lucrative and competitive industry and often times to retain top talent, you have to pay them market rates.

Unlike many pre-meds, students who go into pretty much every other field are mostly focused on maximizing income--especially business executives.

So if hospitals didn't pay them premium rates, then they would go work somewhere else. And the hospital would have inferior leadership as a result.

👍

The leadership at for-profit and non-profit hospitals tend to operate similarly in terms of maximizing income. While profits go to shareholders of for-profits, they get put back into the hospital and go to other causes in the case of a non-profit.

 

[FakeEmpire]

You should read the Time article Bitter Pill. It's really lengthy but goes a long way into explaining many healthcare issues, not only why administrators make so much. I think it was mentioned previously in a thread, as it's not a new article.

Salaries have gotten WAY off track for hospital administration in my opinion. Medicine became a lucrative field at some point along the way and now people automatically assume they should make such a figure "well if I'm going to be the head of this hopsital I won't make anything less than ###" and then let's charge someone $20 for an aspirin.....

OK sorry rant is over......🙂

 

[Sabate]

👍

The leadership at for-profit and non-profit hospitals tend to operate similarly in terms of maximizing income. While profits go to shareholders of for-profits, they get put back into the hospital and go to other causes in the case of a non-profit.

Other causes also including executive bonuses. Saw that happen at one of the non-profit hospitals here while they were fighting the nurses union to increase patient load. Real class act and some high quality "leadership" there. Can't imagine how we could do without our benevolent overlords running these hospitals...

 

[Planes2Doc]

You can help make them higher by volunteering your services for free. 😀

 

[sinombre]

You can help make them higher by volunteering your services for free. 😀

I heard an NPR story yesterday on how ridiculous it is that most internships are unpaid. I thought you would've appreciated it... haha

 

[aspiringdoc1234]

Actually curious. Anyone seen analysis of this topic? Please share.

Mostly thinking of your run of the mill non-profit hospital with a CEO making several million a year.

I think you may have been confused between hospital execs and medical INSURANCE CEOs.

Of course most of these people are making money from stock options and bonuses; not so much the actual salary.

http://en.wikipedia.org/wiki/Stephen_J._Hemsley

 

[Planes2Doc]

I heard an NPR story yesterday on how ridiculous it is that most internships are unpaid. I thought you would've appreciated it... haha

I read an article on that. It doesn't anger me as much because people who do internships are completely honestvabout their intentions. They are doing it for the experience on their resume to get their foot in the door. With volunteering in a hospital, pre-meds pretend to be altruistic and the elderly and others who are trying to genuinely help are being taken advantage of. 🙁

 

[Medstart108]

Can doctors become hospital CEOs? Or are they usually just an outsider hired.

 

[Plue00]

Healthcare is a lucrative and competitive industry and often times to retain top talent, you have to pay them market rates.

Unlike many pre-meds, students who go into pretty much every other field are mostly focused on maximizing income--especially business executives.

So if hospitals didn't pay them premium rates, then they would go work somewhere else. And the hospital would have inferior leadership as a result.

😆

It's great that you think that

 

[Planes2Doc]

😆

It's great that you think that

I doubt they are the only ones who think like that. Pre-meds need to put on a great big song and dance pretending that they never want to make any money and devote their lives to helping the poor and working for free. In fact, you are considered a troll if you start a thread talking about salaries here.

Yet ironically, the pre-meds who are most "altruistic" with the most activities tend to wow ADCOMs from top schools, then end up doing competitive specialties, and become top earners at their respective hospitals.

 

[Dbate]

😆

It's great that you think that

I actually do think that many/most premeds pursue medicine for reasons other than money.

For one thing, the financial returns on a medical education are very low compared to other fields. To truly make alot of money (i.e. 1mil+ per year), you would need to pursue a different field.

If one were to pursue other traditional professional fields such as law or business, then future income is much higher. Granted there is greater risk associated with those fields, but the potential rewards are much higher than will ever be possible with medicine.

 

[calvnandhobbs68]

I actually do think that many/most premeds pursue medicine for reasons other than money.

For one thing, the financial returns on a medical education are very low compared to other fields. To truly make alot of money (i.e. 1mil+ per year), you would need to pursue a different field.

If one were to pursue other traditional professional fields such as law or business, then future income is much higher. Granted there is greater risk associated with those fields, but the potential rewards are much higher than will ever be possible with medicine.

Oh hey look we have our weekly "you can make more money other ways" post.

 

[Dbate]

Oh hey look we have our weekly "you can make more money other ways" post.

Get over yourself. It was relevant to the conversation.

But by all means, continue to be a d*ck.

 

[thesauce]

Oh hey look we have our weekly "you can make more money other ways" post.

And presumably our weekly "no you can't but I can't give you any specific reasons why not" is on its way?

 

[Dbate]

I realize this topic has been talked about alot before, but it seems as if it should be discussed often.

The financial aspect of medicine is increasingly important because schools are not going to decrease tuition and insurers are not going to increase reimbursement. With the investment of time required in medicine, most physicians I have spoken to have emphatically stated not to pursue medicine. And most people's whose parents are doctors have told them the same thing.


As a premed, I recognize that I know very little about medicine, so I feel that the opinions of these people shouldn't be disregarded.

I know that not all doctors are pessimistic about medicine, but most of the optimism I have encountered has been on this message forum. In real life, very few doctors have encouraged me to pursue medicine.

Discussing the quantifiable downsides of medicine is probably one of the best services med students, residents, and attending can provide to premeds. And I personally really appreciated hearing fresh perspectives.

 

[LizzyM]

Executive salaries are all about size.... of the organization. This goes for non-profit as well as for-profit businesses. By that I mean, the number of employees, the number of customers, the gross sales per year, the size of the payroll, and so forth. Many hospitals are huge organizations in terms of employees, customers and annual cash flow. Organizations compete for talent and the talent needed to run a multi-million dollar organization is rare and requires coming up through the ranks in medical administration (sometimes by way of nursing, rarely as a physician). If the business of medicine floats your boat, it is a reasonable alternative to getting your hands dirty. At the entry level the hours are crap, with overnight shifts and all the rest, just like residents but administrators wear suits.

 

[Dbate]

Executive salaries are all about size.... of the organization. This goes for non-profit as well as for-profit businesses. By that I mean, the number of employees, the number of customers, the gross sales per year, the size of the payroll, and so forth. Many hospitals are huge organizations in terms of employees, customers and annual cash flow. Organizations compete for talent and the talent needed to run a multi-million dollar organization is rare and requires coming up through the ranks in medical administration (sometimes by way of nursing, rarely as a physician). If the business of medicine floats your boat, it is a reasonable alternative to getting your hands dirty. At the entry level the hours are crap, with overnight shifts and all the rest, just like residents but administrators wear suits.

Is there a particular reason physicians rarely become administrators?

 

[deleted480308]

Is there a particular reason physicians rarely become administrators?

Because they already make $200/yr and switching to midlevel management would take a large paycut and mastering a completely different skillset

 

[plumhill]

Can doctors become hospital CEOs? Or are they usually just an outsider hired.

Yes they can; many of the top C-level administrators at my university hospital have an MD (some also have an MBA or an MPH).

 

[cbrons]

Healthcare is a lucrative and competitive industry and often times to retain top talent, you have to pay them market rates.

Unlike many pre-meds, students who go into pretty much every other field are mostly focused on maximizing income--especially business executives.

So if hospitals didn't pay them premium rates, then they would go work somewhere else. And the hospital would have inferior leadership as a result.

I actually do think that many/most premeds pursue medicine for reasons other than money.

For one thing, the financial returns on a medical education are very low compared to other fields. To truly make alot of money (i.e. 1mil+ per year), you would need to pursue a different field.

If one were to pursue other traditional professional fields such as law or business, then future income is much higher. Granted there is greater risk associated with those fields, but the potential rewards are much higher than will ever be possible with medicine.

 

[Dbate]

Because they already make $200/yr and switching to midlevel management would take a large paycut and mastering a completely different skillset

How much of a pay cut? I always read that healthcare executives made a ton of money.

 

[deleted480308]

How much of a pay cut? I always read that healthcare executives made a ton of money.

Upper levels do, but you have to work your way up....no one ever says, "wow, that transplant surgery went great, want to be the ceo of our hospital group?"

 

[LizzyM]

Upper levels do, but you have to work your way up....no one ever says, "wow, that transplant surgery went great, want to be the ceo of our hospital group?"

Most physicians would not be willing to trade patient care and medical science for union negotiations, board meetings and hour after hour of more meetings and budgets and policy discussions.

Would you be interested in taking a year of accounting and a course in personnel management? If not, being an administrator might not be a good fit for you.

 

[deleted480308]

Most physicians would not be willing to trade patient care and medical science for union negotiations, board meetings and hour after hour of more meetings and budgets and policy discussions.

Would you be interested in taking a year of accounting and a course in personnel management? If not, being an administrator might not be a good fit for you.

I agree, I'm in project management now.....and can't wait to get into medical school

 

[phunky]

People don't understand how hard it is to run a large organization like a major hospital. There aren't many people in the world who can do that job, so organizations need to offer competitive salaries in order to attract the kind of talent that can do the job and do it well. It's not some kind of conspiracy.

 

[calvnandhobbs68]

I realize this topic has been talked about alot before, but it seems as if it should be discussed often.

The financial aspect of medicine is increasingly important because schools are not going to decrease tuition and insurers are not going to increase reimbursement. With the investment of time required in medicine, most physicians I have spoken to have emphatically stated not to pursue medicine. And most people's whose parents are doctors have told them the same thing.


As a premed, I recognize that I know very little about medicine, so I feel that the opinions of these people shouldn't be disregarded.

I know that not all doctors are pessimistic about medicine, but most of the optimism I have encountered has been on this message forum. In real life, very few doctors have encouraged me to pursue medicine.

Discussing the quantifiable downsides of medicine is probably one of the best services med students, residents, and attending can provide to premeds. And I personally really appreciated hearing fresh perspectives.

Yeah and most people whose parents are lawyers tell them not to go to law school either but you just suggested we could make more money going that route. Good argument.

 

[calvnandhobbs68]

How much of a pay cut? I always read that healthcare executives made a ton of money.

I just posted a specific list of CEO salaries (which are going to generally be the largest in the hospital) and many of them don't touch surgical specialty salaries. Hell some of them aren't even as much as IM subspecialty or internist income.

Now national median CEO salary for managing a hospital system with a budget over $50mil is $533k but it takes quite a bit of work to get to that level.

Edit: Little too sarcastic at first lol.

 

[Dbate]

Most physicians would not be willing to trade patient care and medical science for union negotiations, board meetings and hour after hour of more meetings and budgets and policy discussions.

Would you be interested in taking a year of accounting and a course in personnel management? If not, being an administrator might not be a good fit for you.

When you describe it like that, being a hospital CEO does sound terrible.

 

[Dbate]

Yeah and most people whose parents are lawyers tell them not to go to law school either but you just suggested we could make more money going that route. Good argument.

I was completely wrong about that. See my other thread.

I didn't want to take this one over, so I talked about it in another thread.

For exeutivepay, I just blindly assumed they made alot of money.

 

[Josh7]

Oh hey look we have our weekly "you can make more money other ways" post.

👍

IF ANYONE WERE TO SPEND THE SAME TIME AND HAVE THE SAME DEDICATION TO THE FINANCE INDUSTRY AS WE SPEND ON PRE-MED ACTIVITIES LIKE MAKING HOSPITAL BEDS 86% OF PRE-FINANCE STUDENTS WOULD ALREADY HAVE RETIRED.

 

[Planes2Doc]

👍

IF ANYONE WERE TO SPEND THE SAME TIME AND HAVE THE SAME DEDICATION TO THE FINANCE INDUSTRY AS WE SPEND ON PRE-MED ACTIVITIES LIKE MAKING HOSPITAL BEDS 86% OF PRE-FINANCE STUDENTS WOULD ALREADY HAVE RETIRED.

So true!!!

 

[cbrons]

👍

IF ANYONE WERE TO SPEND THE SAME TIME AND HAVE THE SAME DEDICATION TO THE FINANCE INDUSTRY AS WE SPEND ON PRE-MED ACTIVITIES LIKE MAKING HOSPITAL BEDS 86% OF PRE-FINANCE STUDENTS WOULD ALREADY HAVE RETIRED.

negative

 

[jr93]

I think people see a few news stories of CEO's with unneccessary salaries and assume that all are that way. Where I work, a lot of people think the CEO makes close to 500k when in actuality it's in the low 200's. Just like if you ask a common person what a FM doctor makes, they'd guess way higher than what it actually is usually. If you want to be rich, pick a career to be rich and have a high chance at being miserable once you realize money isn't everything. Who really cares what these guys make except that healthcare costs are too high?

 

[Slickyfats]

👍

IF ANYONE WERE TO SPEND THE SAME TIME AND HAVE THE SAME DEDICATION TO THE FINANCE INDUSTRY AS WE SPEND ON PRE-MED ACTIVITIES LIKE MAKING HOSPITAL BEDS 86% OF PRE-FINANCE STUDENTS WOULD ALREADY HAVE RETIRED.

I hear this comment so often, and people are practically beating their chests in agreement. I know this comment is sarcastic (it damn well better be), but it's not as easy as people think. Sure, you can do great in finance and play the stock market, but guess what? To a certain extent, you're gambling.

Outside that, if you wanted to make a ton of money on the stock market, you typically have to start with a good chunk of money.

Well, sure, you could just work for a company like Goldman Sachs and make what might start out like $80,000 a year with a pretty good growth rate. You really think you're going to get that though? Are you going to beat out the charasmatic/handsome frat boy with his good set of connections? How stable will THAT job be. What happens when the financial district collapses AGAIN? What happens when NUCLEAR WAR BREAKS OUT. How are you going to SURVIVE THE WASTELAND? When CANIBAL MARAUDERS kidnap you and you BEG FOR YOUR LIFE, what are you going to say? "I-I can make good stock exchanges", "I can show positive canibal growth by Q4"? No Mother F*ckers, you're going to tell them you're a DOCTOR and can heal the BULLET WOUNDS from their skirmishes outside the VAULTS.

The fact is, a Doctor can survive the post-apocalyptic nuclear wasteland better than a Finance person.

I think I lost my train of thought somewhere...

I hope my point got across...

 

[Narmerguy]

When you describe it like that, being a hospital CEO does sound terrible.

You have to love that kind of work to make it to that level. It can't just be a job to you, because it will demand so much of you that you can't thrive otherwise.

 

[Planes2Doc]

Out of curiosity, are hospital CEOs meant to be perceived as altruistic saints, or are they like any other CEO working to maximize revenue and shareholder value?

 

[LizzyM]

Out of curiosity, are hospital CEOs meant to be perceived as altruistic saints, or are they like any other CEO working to maximize revenue and shareholder value?

Some may be saints in the making:
http://www.mercy-chicago.org/sister-sheila-lyneretirement

 

[ventulus18]

"Nearly half of nonprofit hospital CEOs in Eastern and Central Massachusetts earn more than $1 million a year....The top executives at 16 out of 38 hospitals received pay packages valued at more than $1 million"

http://www.bizjournals.com/boston/p...spitals-million-dollar-salaries.html?page=all

 

[ventulus18]

Many hospital execs are physicians at the hospital I work at:

http://www.massgeneral.org/about/torchiana.aspx
http://www.massgeneral.org/about/slavin.aspx
http://www.connectwithpartners.org/author/gary-gottlieb/

 

[thesauce]

...I hope my point got across...

I don't think so