At a time when聽many聽contend that聽hospitals should focus on outcomes聽rather than the volume of care provided,聽in New Hampshire there is “virtually no correlation between hospital [CEO] pay and either quality or cost” at nonprofit health systems,聽the study said.
“Given these hospitals exist to provide quality health care and are required to provide community benefit and charitable care in light of their non-profit status, the lack of such a correlation is a significant concern,” New Hampshire Attorney General Michael A. Delaney said this week. The New Hampshire Department of Justice聽regulates the state’s nonprofit sector.
Instead, the CEOs’ compensation packages correlated closely with the size of the institutions they ran, the study found.聽The bigger the system, the more the CEO聽generally made. The boss of Lebanon’s Mary Hitchcock Memorial Hospital聽($1.1 billion in revenue) pulled down $785,000 in 2009, while the CEO of Colebrook’s Upper Connecticut Valley Hospital ($15 million in revenue) made $150,000.
Delaney hired聽the center to analyze聽how CEO pay has changed in the state’s聽23 nonprofit hospital systems, how hospitals determine聽compensation and whether they follow federal guidelines in doing so.
One聽goal of the study was to “elevate the discussion” surrounding聽pay聽at tax-exempt hospitals,聽Daniel Barrick, the center’s deputy director, said in an interview.
“What are some of the variables that should be used in setting this?” is a question聽policymakers are asking,聽Barrick said. “That would help us understand the relationship between聽setting CEO pay and the value that the hospital provides to the community.”
The research聽went deeper than many analyses of nonprofit pay, which often rely only on publicly available IRS filings. The center gathered聽internal hospital records including聽CEO employment contracts, board minutes, executive memos and W-2 wage forms from 2005 to 2010.
Most hospitals met IRS standards for setting executive pay,聽“with some key caveats,” the study said. Three聽hospitals didn’t produce written records from board meetings in which CEO pay was discussed. Two聽smaller hospitals聽didn’t use pay at similar institutions as a benchmark for paying聽their executives.
Documenting pay deliberations and performing comparative pay studies are two ways nonprofits can聽show the IRS聽that they are compensating聽 executives聽 appropriately.
The study found “a weak relationship” between CEO compensation and the amount of charity care a hospital provided. In addition to salaries, most New Hampshire hospitals paid annual bonuses to聽CEOs, provided supplemental retirement plans and paid聽automobile expenses, it said.
The researchers also found that pay for the average New Hampshire hospital聽CEO has risen faster in recent years — up 18 percent from 2006 through 2009 — than compensation for the average private-sector worker or the average聽health care聽worker. However, pay聽for New Hampshire CEOs rose more slowly than packages for hospital bosses in聽New England as a whole, which rose by 29 percent in the same period, the study said.
麻豆女优 Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at 麻豆女优鈥攁n independent source of health policy research, polling, and journalism. Learn more about .This <a target="_blank" href="/news/study-high-ceo-pay-doesnt-boost-hospital-quality/">article</a> first appeared on <a target="_blank" href="">麻豆女优 Health News</a> and is republished here under a <a target="_blank" href=" Commons Attribution-NonCommercial-NoDerivatives 4.0 International License</a>.<img src="/wp-content/uploads/sites/8/2023/04/kffhealthnews-icon.png?w=150" style="width:1em;height:1em;margin-left:10px;">
<img id="republication-tracker-tool-source" src="/?republication-pixel=true&post=3500&ga4=G-J74WWTKFM0" style="width:1px;height:1px;">]]>