4 Trends on Hospital CIO and CMIO Compensation

Technology has never been as important at hospitals and health systems as it is right now, and that typically means CIOs and CMIOs have to handle a lot more.

Meaningful use, electronic health record implementation, computerized physician order entry — these tasks and others are front and center for hospital CIOs and CMIOs, and these executives' compensation have risen over the years to match the increased responsibilities.

Tim Tolan, senior partner at executive search firm Sanford Rose Associates, explains the four major trends regarding hospital CIO and CMIO compensation right now.

1. CIO and CMIO compensation varies between $200,000 and $300,000. Last year, CIOs and CMIOs had comfortable compensation levels, but those levels vary significantly across the board, particularly by region and hospital/health system size.

For CIOs, the average base salary in 2011 increased year-over-year to $221,963, according to SRA's most recent survey. Most CIOs work in a single-hospital system, and they made an average of $197,182 last year compared with $191,976 in 2010. CIOs who were at two-hospital systems had an average base salary of $232,866 in 2011 compared with $200,303 in 2010. CIOs at health systems with three or more hospitals averaged more than $246,000 in base salary last year, which was actually lower than 2010's average of $261,681. According to the survey, the highest CIO base salary was $400,000 while the lowest was $125,000.

Mr. Tolan says hospital CIOs tend to make more in the Western United States and the Rocky Mountain region, as those salaries can bounce between $275,000 and $300,000. CIOs typically made the least in New England and the Southeast, with salaries ranging between $174,000 and $219,000.

Hospital CMIOs usually make more than CIOs, as their average base salary last year topped $273,000. Total average compensation for CMIOs was $307,390. CMIOs at large, multistate health systems or investor-owned chains could potentially earn up to $600,000 or more, Mr. Tolan says.

The usual perquisites include stock options (for publicly traded companies), cell phone allowances, more paid time off and 403(b) retirement plans.

2. Year-over-year base salaries are not increasing rapidly. While base salaries are holding steady for hospital CIOs and CMIOs, Mr. Tolan believes base salary raises will be modest for the foreseeable future. Hospitals and health systems are prepping for implementation of the Patient Protection and Affordable Care Act, meaning more money is being funneled toward healthcare reform projects and less is going toward executive and staff raises.

"Like a lot of other industries, raises have decreased," Mr. Tolan says. "Facilities have been more conservative with raises because of the economy, especially this year with [healthcare reform]."

3. Bonuses are tied to major IT projects like meaningful use and electronic health records. CIO and CMIO bonuses and incentives can be as low as 2 percent of base salary or as high as 100 percent, Mr. Tolan says. Over the past several years, Mr. Tolan says there has been a big shift to drive new clinical health IT initiatives — such as achieving meaningful use to obtain government-funded incentive payments or completing EHR implementation — and CIOs and CMIOs that can drive faster adoption could see bigger bonuses. However, a 100 percent bonus is not typical, as each hospital or health system is dependent on varying levels of projects and initiatives that are under way.

4. There is a lot of movement across the healthcare IT sector. Because technology is one of the few booming sectors across the U.S. economy, hospital CIOs and CMIOs are in a prime position to move to new organizations if the compensation and value appears to be worth their while. Mr. Tolan says CIO and CMIO movement will usually stay local, but these executives have some flexibility on job opportunities and compensation levels.

"I've heard over half of CIOs in the marketplace would consider making a move [to another hospital] because the economy seems to be coming back," Mr. Tolan says. "This movement and relocation tends to be regional [rather] than national because people have a tendency to stay closer to their homes — or their equity in their personal home is under water."

More Articles on Hospital Compensation:

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