Executive compensation is a delicate subject no matter the industry, and for hospital and health system executives, their pay has been scrutinized more in the past several years as organizations continue to feel the strain of compressed finances.
Voters in the El Camino Hospital District in Mountain View, Calif., recently voted that hospital executives are paid too much. As it stands, executives at El Camino Hospital will have their pay capped at no more than twice the salary of California's governor, which is roughly $330,000.
However, David Bjork at INTEGRATED Healthcare Strategies believes healthcare executives are not overpaid. Further, he believes the question "Are executives paid too much?" needs to be broken down into four related questions:
• Are executives paid more than they should be paid?
• Why should executives of organizations that are tax-exempt and dependent on public funding for Medicare and Medicaid be paid as much as they are?
• Why should executives be paid so much more than other employees?
• Are executives paid more than they are worth?
Healthcare executive compensation will always be an issue because it is tied to moral, political, sociological and economic factors. Mr. Bjork believes the compensation levels are currently appropriate, on the whole, because employers are generally keeping them on the job with such consistent pay levels.
"High compensation for healthcare executives feeds social discontent over the widening disparity in wealth and income in the United States," Mr. Bjork wrote. "It also drives boardroom debates about the extent to which executives should be well-paid while the hospital is trimming costs everywhere else and asking employees to pay a greater share of the cost of healthcare and retirement benefits. But labor market forces drive pay for executives, just as they do for other employees."
Voters in the El Camino Hospital District in Mountain View, Calif., recently voted that hospital executives are paid too much. As it stands, executives at El Camino Hospital will have their pay capped at no more than twice the salary of California's governor, which is roughly $330,000.
However, David Bjork at INTEGRATED Healthcare Strategies believes healthcare executives are not overpaid. Further, he believes the question "Are executives paid too much?" needs to be broken down into four related questions:
• Are executives paid more than they should be paid?
• Why should executives of organizations that are tax-exempt and dependent on public funding for Medicare and Medicaid be paid as much as they are?
• Why should executives be paid so much more than other employees?
• Are executives paid more than they are worth?
Healthcare executive compensation will always be an issue because it is tied to moral, political, sociological and economic factors. Mr. Bjork believes the compensation levels are currently appropriate, on the whole, because employers are generally keeping them on the job with such consistent pay levels.
"High compensation for healthcare executives feeds social discontent over the widening disparity in wealth and income in the United States," Mr. Bjork wrote. "It also drives boardroom debates about the extent to which executives should be well-paid while the hospital is trimming costs everywhere else and asking employees to pay a greater share of the cost of healthcare and retirement benefits. But labor market forces drive pay for executives, just as they do for other employees."
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