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Hospital CEOs aren't necessarily paid for performance, study finds

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Pay for hospital CEOs is linked more to technology and patient satisfaction than to quality, according to a new study of CEO pay at nonprofit hospitals, says Kaiser Heath News. The study finds that executives at institutions that have lots of fancy medical technology and high patient satisfaction are paid more than their peers. But running a hospital that scores well on keeping more patients alive or providing extensive charity care doesn't translate into a compensation bump.

"CEOs of technology-laden nonprofit hospitals earned on average $136,000 more than those with little advanced machinery, according to the study published Monday in the journal JAMA Internal Medicine. CEOs at places with high patient satisfaction scores earned on average $52,000 more than those with poor reviews.

"The study found no difference in CEO compensation depending on publicly available measures of quality, including mortality rates, readmissions rates and how consistently hospitals followed a number of publicly reported guidelines for recommended care.  

"For some time, nonprofit hospitals have been under scrutiny for paying lavish salaries to CEOs while giving little back to their communities. Dr. Karen Joynt, the study's lead author, said that since nonprofit hospitals do not have to pay any property taxes, the researchers wanted to see if there was any evidence hospital boards gave financial rewards to CEOs to provide more charity care, such as treating lots of low-income patients and discounting or waiving bills for those who had trouble paying. "We didn't see a signal at all," she said. 

"The study is the first to use federal tax returns of hospitals to assess CEO pay and the factors that are associated with it. The researchers examined records for 2,581 hospitals, more than 98 percent of private nonprofit hospitals. For-profit hospitals, which are a minority of America’s acute care hospitals, were not included in the analysis. The analysis identified 1,877 executives, with some running more than one hospital." Read more.

 

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