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Original Investigation |

Compensation of Chief Executive Officers at Nonprofit US Hospitals

Karen E. Joynt, MD, MPH 1,3,5; Sidney T. Le, BA1,7; E. John Orav, PhD2,4; Ashish K. Jha, MD, MPH1,4,6
[+] Author Affiliations
1Department of Health Policy and Management, Harvard School of Public Health, Boston, Massachusetts
2Department of Biostatistics, Harvard School of Public Health, Boston, Massachusetts
3Cardiovascular Division, Department of Medicine, Brigham and Women’s Hospital, Boston, Massachusetts
4Division of General Internal Medicine, Department of Medicine, Brigham and Women’s Hospital, Boston, Massachusetts
5Cardiology and Vascular Medicine Section, Department of Medicine, Veterans Affairs Boston Healthcare System, Boston, Massachusetts
6General Internal Medicine Section, Department of Medicine, Veterans Affairs Boston Healthcare System, Boston, Massachusetts
7currently a medical student, University of California, San Francisco
JAMA Intern Med. 2014;174(1):61-67. doi:10.1001/jamainternmed.2013.11537.
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Importance  Hospital chief executive officers (CEOs) can shape the priorities and performance of their organizations. The degree to which their compensation is based on their hospitals’ quality performance is not well known.

Objective  To characterize CEO compensation and examine its relation with quality metrics.

Design, Setting, and Participants  Retrospective observational study. Participants included 1877 CEOs at 2681 private, nonprofit US hospitals.

Main Outcomes and Measures  We used linear regression to identify hospital structural characteristics associated with CEO pay. We then determined the degree to which a hospital’s performance on financial metrics, technologic metrics, quality metrics, and community benefit in 2008 was associated with CEO pay in 2009.

Results  The CEOs in our sample had a mean compensation of $595 781 (median, $404 938) in 2009. In multivariate analyses, CEO pay was associated with the number of hospital beds overseen ($550 for each additional bed; 95% CI, 429-671; P < .001), teaching status ($425 078 more at major teaching vs nonteaching hospitals; 95% CI, 315 238-534 918; P < .001), and urban location. Hospitals with high levels of advanced technologic capabilities compensated their CEOs $135 862 more (95% CI, 80 744-190 990; P < .001) than did hospitals with low levels of technology. Hospitals with high performance on patient satisfaction compensated their CEOs $51 706 more than did those with low performance on patient satisfaction (95% CI, 15 166-88 247; P = .006). We found no association between CEO pay and hospitals’ margins, liquidity, capitalization, occupancy rates, process quality performance, mortality rates, readmission rates, or measures of community benefit.

Conclusions and Relevance  Compensation of CEOs at nonprofit hospitals was highly variable across the country. Compensation was associated with technology and patient satisfaction but not with processes of care, patient outcomes, or community benefit.

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Figure.
Distribution of Chief Executive Officer Pay

Histogram of chief executive officer pay at US nonprofit hospitals in calendar year 2009.

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