The average income of senior executives is 8 times that of non-management doctors in the hospital, and the maximum difference can reach 60 times.
Written by | Yan Xiaoliu
Source | "Medical Community" public account
"I'm infected with COVID-19 at work. After my recovery, I was named 'Outstanding Employee of the Month'. The department rewarded me with a canteen voucher worth $6 (equivalent to 38 yuan). Jamelle Brown smiled bitterly and shook her head.
Jamelle Brown works in the Environmental Services Department at The Kansas City Research Medical Center in Missouri, WHERE she is responsible for routine elimination work such as emergency rooms.
The center has 590 beds and is affiliated with the Hospital Corporation of America (HCA). The latter is the world's largest operator of for-profit health services.
As of December 2020, HCA operates 185 hospitals, 121 surgical centres and 21 independent endoscopic centres in the UK and THE US, as well as more than 1,000 physician clinics.
At the time of the COVID-19 pandemic in 2020, HCA revenue reached $51.5 billion and pretax earnings rose 3.6%. This performance has made HCA's chief executive (CEO) Samuel N. Hazen have a face full of money in his pocket: his annual salary in 2020 is up 13% from 2019 to $30.4 million.
That's 556 times the median compensation for HCA employees and 1,000 times that of Jamelle Brown.
"I was heartbroken." Jamelle Brown told NBC News that she had been working at the center for 4 years as of the time of infection in August 2020 and had not raised her salary in the last two years. "I didn't take the voucher. I told the person in charge that this place was not for me. ”
Jamelle Brown presents her "Outstanding Employee of the Month" award. /NBC News
The large income gap between bosses and employees is not unique to medical institutions. But the result can be "deadly".
In February 2022, Health Affairs, an authoritative international health policy research journal, published a survey by the Lown Institute, a medical think tank.
The survey analyzed the data of more than 1,000 non-profit medical institutions in the United States and found that the average income of senior executives was 8 times that of non-management doctors in hospitals, and the maximum difference could reach 60 times.
"Hospitals are usually the largest employers in the area. The level of compensation they pay to their employees has a significant impact on the financial stability of the community as a whole. We found that the income gap between medical care and presidents is too large, which to a certain extent also reflects the hospital's economic operation mechanism and goals, and is inconsistent with the hospital's social goals. This is not necessarily a good thing for medical services and patient safety. The Lorne Institute article said.
Nonprofit healthcare organizations "no pay equity"
In the United States, the high income of the medical industry is "established".
The 2021 Medscape Salary Survey shows that the average annual income of doctors in different departments is between $221,000 and $526,000. In 2017, Glassdoor selected the top 25 jobs in the United States with the highest salary, and doctors dominated the list. Medical-related positions also include medical liaison officers, pharmacists, physician assistants and practicing nurses.
But compared with the top management of the hospital, these are "small witches see big witches".
The Lorne Institute, combined with the "Lorne Institute Hospital Index" (hereinafter referred to as the "Hospital Index"), analyzed the data of 1097 non-profit medical institutions and found that the average hourly salary of the top managers of hospitals was $249. The average hourly salary for non-management care is $29.
There are significant differences between different agencies. Some institutions have a dean/staff compensation ratio of 2:1. Up to 60:1.
Image courtesy of the Lown Institute Hospitals Index
The analysis also revealed the relationship between hospital size and executive compensation.
"Quantity is important, especially the number of high profits. This is one of the basic business models developed by non-profit medical institutions. The researchers said that as the scale of the hospital expands, the salary of all employees will increase, but the salary increase at the top level often far exceeds that of employees. For every additional usable bed in the hospital, the average hourly wage at the top level may increase by $550.
Specifically:
When the number of hospital beds < 50:
Average hourly salary for the Dean: $130
Dean's Salary: Other Employees' Compensation = 6:1
Number of beds between 50 and 99:
Average hourly salary for the Dean: $179
Number of beds 100-199:
Average hourly salary for the Dean: $239
Dean's Salary: Other Employees' Compensation = 8:1
The number of beds is 200-399
Average hourly salary for the Dean: $335
Dean's Salary: Other Employees' Compensation = 10:1
Number of beds> 400 beds:
Average hourly salary for the Dean: $517
Dean's Salary: Other Employees' Compensation = 14:1
Size is not the only characteristic that affects compensation. According to the "Hospital Index", this is also related to the city where the hospital is located, whether it is a teaching hospital/teaching status, etc.
In general, large, urban, and major teaching hospitals are almost equal to "high income for presidents."
In large hospitals with more than 400 beds, the hourly wages of the directors are also very "rolled", ranging from $88 to $3289.
The hospital's high-level income is an "outlier"
The Lorne Institute's investigation first validated a "rumor" that the salary level of the top executives of medical institutions in the U.S. nonprofit industry is "an outlier."
In 2021, there were reports that in most nonprofit institutions, the average annual compensation of senior executives was $100,000 to $200,000.
There are two exceptions. One is the president of a college and university, with an average annual salary of $350,000. The other is the hospital's top administrator (president or CEO), with an average annual income of $600,000.
In an individual case, some amounts are large enough to bounce off the eye. In 2019, the CEO of nonprofit healthcare group Ascension Health made $13.6 million. Forbes said that if he added up his 2014-2017 salary, he made a total of $59.1 million.
If it is estimated by a single institution, the income of hospital presidents still has a crushing advantage in the case of equal annual income of institutions.
For example, in 2017, the top executives of non-profit medical institutions with top 10 salaries earned at least $7 million per person per year.
The American Red Cross has 600 branches and annual revenue of $3.6 billion. Its highest-paid branch executives received about $800,000 in 2018.
During the same period, Ochsner Medical Center in New Orleans, USA, had annual revenues of $3.4 billion. The president of the institute earns $5 million a year, which is the sum of the 10 highest-paid executives of the American Red Cross.
Why is the dean "getting more and more expensive"?
The Lorne Institute notes that the upward trend in executive pay in nonprofit hospitals has been going on for decades.
In the 1960s, with the advent of medicare and increased coverage, hospital revenues began to climb. Many medical institutions have taken advantage of the trend to upgrade, from non-profit organizations serving the community to groups, and then listed.
A large number of management posts have been set up within the organization to employ more administrative staff. Slowly, new members bring their values and experiences in the for-profit world to healthcare facilities.
Today, the main role model for non-profit medical institutions is the for-profit listed company, which deeply studies the management culture, quality standards, and performance indicators of the latter. When hospitals recruit management, salaries and performance are also based on for-profit organizations.
A Connecticut study of 35 nonprofit hospital presidents showed that between 1998 and 2006, the salaries of the directors surveyed were linked to hospital performance indicators. The presidents authorized hospitals to reduce their assistance programs for the poor, Medicare patients, and encourage an increase in the number of private insurance patients. Since then, the income of the institution has increased, and the deans have raised salaries one after another.
A similar situation is happening in China. The 2019 "The Impact of Public Hospital President Salary Incentives on Hospital Performance" shows that for hospital presidents, hospital development and compensation are the two main factors that motivate the work of presidents. The president's salary is linked to the hospital's performance indicators, which will prompt the hospital to work towards the assessment indicators, and may ignore the overall development of the hospital.
COVID-19 magnifies the gap
According to the U.S. Institute for Economic Policy Research, the average salary of the president of a major nonprofit hospital increased by 93 percent between 2005 and 2015. Over the same period, the average salary of other employees in the hospital increased by only 8%.
This pay inequality has been further amplified since the COVID-19 pandemic.
NBC News reported that although some medical institution executives took the initiative to "cut wages" during the epidemic to support institutions to tide over financial difficulties, more than 80% of US medical institutions gave bonuses to senior executives while extensively laying off employees and cutting salaries.
"Nonprofit hospitals and their CEOs are getting richer, but people's health care is 'getting poorer.'" Forbes said.
The Lorne Institute survey points out that it is time to publicly discuss hospital pay equity and create pay equity indicators. "Nonprofit hospitals should work to improve public health and enhance the health of their communities. Its size and income are not the true value of the hospital. ”
"It is necessary to develop a set of salary indicators to motivate the president and fulfill the hospital's social mission." For example, if clinical outcomes improve, patient safety improves, and community health improves, the dean should be rewarded. ”
Source:
1.Average CEO pay by hospital size. Becker's Hospital Review
2.Nonprofit Hospital CEO Compensation: How Much Is Enough?. Health Affairs
3.CEOs of public U.S. firms earn 320 times as much as workers. Even some CEOS say the gapis too big. NBC News
4.Hospital industry's highest-paid CEO made more than $51M in 2016. Becker's Hospital Review
5.Top U.S. "Non-Profit" Hospitals & CEOs Are Racking Up Huge Profits. Forbes
6. The impact of salary incentives of public hospital presidents on hospital performance. Chinese Journal of Health Policy Research, 2019, 12(3): 38-44. DOI:10.3969/j.issn.1674-2982.2019.03.006
Source: Medical community
Editor-in-charge: Zheng Huaju
Proofreader: Zang Hengjia
Plate making: Xue Jiao