Herbert Padres, MD, received millions in compensation from NewYork-Presbyterian Hospital in New York City following his retirement in 2011, raising questions about hospital executive compensation, according to a report from The New York Times.
Hospital tax records show that the year after his retirement, Dr. Padres earned $5.6 million, including $1 million in base salary, a $1.8 million bonus for his final year and $2 million in deferred compensation. Meanwhile, Steven Corwin, MD — Dr. Padres' successor — earned $3.6 million that year, according to the report. Additionally, Dr. Padres has remained employed by the hospital since 2012 as the executive vice chairman of its board of trustees. His most recent pay information is due to be released this year.
Dr. Padres' case illustrates a broader trend of rising compensation for hospital executives in New York and beyond. For instance, Michael J. Dowling, CEO of North Shore-LIJ in Great Neck, N.Y., saw his pay package increase by 83 percent from 2008 to 2012, reaching nearly $4 million. And Robert Grossman, MD, dean and CEO of NYU Langone Medical Center in New York City, saw his pay increase 70 percent over four years to $4 million. However, these hospitals have said higher executive pay is justified by the size of their systems, according to the report.
The report on Dr. Padres and other New York hospital executives is one of many recent articles spotlighting the pay rates of U.S. hospital executives in general. For instance, the Times published a news analysis in May examining the "proliferation of high earners in the medical business and administration ranks" and the effect rising executive salaries have on total healthcare spending. According to the article, the average annual salary (not including bonuses or incentives) is $386,000 for hospital CEOs and $236,800 for hospital administrators. These amounts "far outstrip" physician salaries, which average $306,000 for a surgeon and $185,000 for a general physician, according to the article.
Hospitals have strongly disagreed with suggestions that executive pay is too high. For instance, in a letter to the editor, the American Hospital Association criticized the Times news analysis. AHA President and CEO Rich Umbdenstock wrote the analysis does "a disservice to the dedicated men and women who lead America’s hospitals." Mr. Umdenstock points out hospital executives have complex and demanding jobs — keeping their facilities open 24/7, facing a volatile regulatory environment and negotiating with dozens of payers, among other challenges. Additionally, Mr. Umbdenstock wrote executive compensation at tax-exempt hospitals is subject to a "rigorous process" prescribed by the Internal Revenue Service.
More Articles on Executive Compensation:
CEO Compensation in Healthcare: 10 Key Thoughts
Healthcare Dominates Highest-Paying American Jobs
10 Highest-Paid Hospital Executives in Washington