Are hospital CEOs making too much money?

Hospitals across the region are cutting staff and costs, but the six- to seven-digit compensation packages for the chief executives who lead metro Atlanta’s taxpayer-subsidized hospitals remain untouched, AJC writer M.B. Pell reports.

In fact, in most cases they’re growing, Pell writes.

Five of these CEOs made more than $1 million in the fiscal year ending in 2009, the last tax records available, Pell writes.

Here are two questions for you:

– Does the rationale that you have to pay CEOs such high salaries to attract the best people hold water to you — given the high unemployment rate and the number of execs out of work?

– Does it make a difference to you whether a hospital is tax-subsidized — like these are — or not when considering executive compensation?

- Henry Unger, The Biz Beat

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33 comments Add your comment

A.S.Mathew

July 5th, 2011
8:14 am

The salary given to the CEOs of corporations, hospitals and even to some
charitable organization is highly irrational. While the CEOs are getting 10% or more salary increase, the people at the bottom line working and sweating hard got 0.5% increase in salary. Now the CEOs
are paid for their policie of laying off more people and make the rest
work double. Those workers are not getting any extra-dollar, but the
CEOs. What we see today is selfishness at the higest level.

Liz

July 5th, 2011
9:26 am

Exactly A.S. the more people they layoff the bigger their bonuses!!!

Art Goldman

July 5th, 2011
9:58 am

The fact that the two highest-priced CEOs at Southern Reigoanl and Emory Adventist made such exhorbitant sums while their hospitals hemorrhaged money is nauseating. They made running a non-profit into a for-profit enterprise…for themselves.

Half Staffed

July 5th, 2011
10:33 am

Everybody wants something for nothing.

so sad

July 5th, 2011
10:33 am

It makes me SICK to see these hospitals advertise as “non-profit”(Childrens Healthcare) while paying these huge salaries. cut the pay and see if they leave, guarantee not one will leave!! Also if the insurance does not pay them their entire bill they will turn it over to collections and put it on your credit report, Gwinnett Hospital does this to Gwinnett citizens while giving free care to illegals

Brenda

July 5th, 2011
10:35 am

Check that story again, it does not mention anything about Children’s Healthcare. Executive pay at CHOA is fair and is not anywhere close to 1,000,000 for top executives.

Edi

July 5th, 2011
10:38 am

Brenda…Donna Hyland CFO at childrens made over 900,000 last year…I suggest you read the whole article

Karl Marx

July 5th, 2011
10:40 am

That’s the 401c3 catch 22. We would be much better off without 401c3. It is just a way to hide “income” and beat income tax so there is really nothing about “Non Profit” going on.

Registerd Nurse

July 5th, 2011
10:49 am

Those hospitals would continue to run without the CEO. What do you think would happen to that hospital without the nurses. Why isn’t the money for these absurd salaries spent on patient care? We are asking for the federal governement to take over health care. That will be a sad day, but bet that CEO’s salary would drop.

Registerd Nurse

July 5th, 2011
10:51 am

And to answer Mr. Unger’s questions……no and no.

Reality Check

July 5th, 2011
10:58 am

Registered Nurse:

Please, come and take on the CEO role for a day and let me know how that goes. Nobody is saying that the direct care givers are not important and everyone, including your “over paid” CEO, would argue you are the lifeblood of the system. But the only reason they can pay you is because you have an executive smart enough to get your system in the right position. You know nothing about the regulations that have to be juggled. You know nothing about the issues with contract negotiations with insurance companies. You know nothing about having to juggle the rise in cost of undocumented patients and how you have to sit and figure out how much you can give in charity to them without using up the entire amount available and leaving Georgia citizens out in the cold. You know nothing about having to spend tons of money just to make sure you survive countless lawsuits without merit.

You know how to take care of patients and everyone should applaud you for that. I don’t sit here and say that is easy or claim that a hospital can run without you. But you need to check yourself about the fact that you have no idea what its like to be an executive of a healthcare organization and yet have the gall to say a CEO is unnecessary.

If you don’t think you’re paid enough, please quit your job and find a higher paying one. You sound like a disgruntled employee and quit honestly, I would not want someone with your attitude providing care to me or my family.

Edi

July 5th, 2011
11:07 am

Reality Check…CEO’s are necessary-don’t think anyone is arguing that point. But, an average salary of over 1 mil, come on. But I guess part of your job is to justify your salary against that of healthcare workers. If you can sleep at night, then I congratulate you.

Reality Check

July 5th, 2011
11:24 am

Edi

Have you ever run a business? Let’s take our friend Registered Nurse for example. If I wanted better workers in her position, I’d have to entice them with more money, benefits and/or a better work environment. The same applies to CEOs.

I will agree with you that everyone making high dollar salaries may not be worth every penny. But you seem to argue that nobody is worth a $1M salary. I would point to results. The article mentions Mr. Fox who runs Emory. What exactly would you pay him? The guy runs a world famous organization, oversees multiple hospitals and clinics and manages directly or indirectly thousands of people. What is that worth to you?

People may not like that business executives make a lot of money. And apparently in the world of healthcare they dislike it even more strictly because people think of healthcare as a moral right of everyone breathing. But the most vocal of critics typically have never worked a day in their life where the entire responsibility of an organization is on their shoulders. You can argue what a CEO does day to day, but if something goes horribly wrong at their company, it will be them on the chopping block publicly. And until you have taken those Risk Management calls at 2am or sat across a table from the State telling you they are going to reduce your Medicaid reimbursement, costing you millions, even though you’re legally required to see all of those same people, I think it is a bit uneducated of you to say that nobody is worth $1M a year.

But, I say you should be allowed to take a healthcare system and run it however you want. Free care for everyone and nobody makes over $100,000 so that everyone feels like it is “fair”. Let me know how that works out for you.

And I’ll sleep just fine at night. Because I’m defending the head of my organization, which provides millions in charity care every year, is financially sound, and saves lives every day. And I can honestly say we wouldn’t be the same without our leader and the community as a whole would suffer if we were not as successful as we are.

LPN

July 5th, 2011
11:29 am

YES THE CEO MAKE WAY TO MUCH MONEY AND I THINK THAT IT IS TRULY UNFAIR THAT THE STAFF GET LAID OFF AND THE CEO GET TO MAKE ALL OF THE MONEY PLUS BONUSES AND THEN LEAVE WHEN IT IS US WHO IS DOING ALL THE HARD WORK.

Wealth Envy Run Amok

July 5th, 2011
11:32 am

Karl Marx –

First off, they are 501c3 organizations, not 401c3. And secondly, hide income? Beat income tax? You are so uneducated it is hard to grasp it. Since you didn’t know the proper tax code describing these organizations, I’m not shocked that you have no idea the level of required reporting that takes place. The fact that this article was even written should prove that to you! Notice they don’t know the salaries of the private, for-profit systems.

If they were “hiding” anything, don’t you think they would hide the pay of their executives to avoid stupid articles like this one?

Wealth envy, wealth envy, wealth envy…what a broken record playing these days! What about your wealth? You’re posting things using the internet, not everyone has the internet. It’s not FAIR that you have access to the internet and others don’t! I think you need to give away your computer, you’re far too wealth in comparison to others. And that car you drive, that house you own, those close you have…far, far too much for just little old you when there are people starving in the streets!

But it’s not about actually helping people or doing right is it? It’s about taking from those that you personally think have too much. Lead by example – give away your own wealth before coming after others.

Reality Check

July 5th, 2011
11:37 am

You people are hopeless! It used to be that people in this country wanted to strive to become something great. Now it seems that the only thing you feel like you can do is tear others down because they have more than you. But why should I be shocked? Even the President does this!

Well, I guess the entire country will just have to be pulled down to the C-average in life. When you all accomplish your “fairness” dream, and everything is run by the government under the premise of making it fair and they start taking from you and not just those you think are wealthy, don’t forget I told you so.

Harvey Schock

July 5th, 2011
12:05 pm

Reality Check, you go from making sound points to making assinine ones when you start chanting about the government taking from people and the President tearing people down.

Harvey Schock

July 5th, 2011
12:06 pm

Tyler Durden

July 5th, 2011
12:40 pm

Did you hear the one about the doctor who can’t read a mexican patient’s chart? Turns out they are all undocumented!

Thank You! I’ll be here all week; tip your waitresses…

Edi

July 5th, 2011
1:34 pm

Reality Check…I will admit you are well versed at defending your position and compensation. That being said, I would be highly disappointed if you were not capable of doing so. After all, at a million a year, you should be able to “justify” your salary. However, I’m not sure that you use these “selling points” when taking donations from groups and individuals.

the one

July 5th, 2011
2:49 pm

Enter your comments here

oji

July 5th, 2011
7:13 pm

If we are pointing fingers at CEOs, take this from someone who knows how much doctors are compensated. A lot of them make more than a $1Million a year, not just 5. Why do we spend so much time on the CEOs when there are so many doctors who make way more and sometimes they are the ones overwhelming the system. Aren’t they supposed to be doing all this for the health of their patients anyways. A CEO’s job is not easy nor is a doctor’s but we should focus on the largest buckets and 5 CEOs making more than a million is nothing…seriously.

Joe

July 5th, 2011
7:23 pm

Oji, this article has nothing to do with doctors or the healthcare system. Just someones paycheck.

Reality Check

July 5th, 2011
10:04 pm

Oji

No – people did not become doctors strictly to provide care for people. It is a job and they expect to be paid for it. Many of them are driven by the mission and the work, but they do not do it for free. It is one of the rare professions that requires tons of personal financial investment to achieve and has an amazing amount of risk involved as well.

I find it interesting that people have a problem with someone making $5 million dollars a year saving people’s lives but will buy tickets to see someone make $20 million dollars a year dunking a basketball. If anyone should be paid tons of money, I vote for the neurosurgeon.

Reality Check

July 5th, 2011
10:07 pm

Joe –

I couldn’t agree more. This article stands as yet another example of people wanting to focus on the wrong issue. They are worried about someone making $1M a year but turn a blind eye to the undocumented people showing up in ERs costing tens of millions of dollars a year. People seem to gloss over the fact that this article points out that these hospitals provided almost $1 Billion dollars of free care last year.

But if you can point at someone and call them rich, that’s about as big an insult as you can muster these days for some reason.

Reality Check

July 5th, 2011
10:17 pm

Edi

You assume that I am one of the CEOs. Unfortunately, I’m far from it. Much lower on the totum pole and pay scale. I am a manager at a healthcare system here in Atlanta. But I can guarantee you that our CEO earns every dollar they get paid and I would not trade my job for theirs.

And in terms of donors – you’d be surprised. Smart donors invest in companies that have a solid financial base. Why do you think Grady was in such trouble before getting a good, business-led non-profit board? People don’t give to need unless you’re talking about a natural disaster or something along those lines. Donors want to make a difference, not just eek your organization by. It is hard to make a difference if every dollar goes to keeping the lights on. But you can find cures at places like St. Jude’s, Johns Hopkins, Harvard and Emory – all places with tons of money and tons of donors. Donors these days, especially big ones, need to see that you know how you handle money.

A1Prog

July 5th, 2011
11:55 pm

These health systems are very large and complex organizations. If you politicize them or otherwise get folks who aren’t overly capable then you end up with what Grady used to be. My issue isnt so much what the ceo makes- its that you cant talk about those levels of personal income and free cash flow at the institutional level while at the same time wrapping yourself in the cloak of a “non-profit 510c3″ which pays no income or property taxes and at the same time also takes money from the taxpaying public for indigent care and other programs.

wkeef

July 6th, 2011
1:23 am

Non-profits have never been non-profits unless they lost money. Instead, they should have been known as non-taxpaying.

Arod

July 6th, 2011
9:17 am

Can anyone on here, honestly say if you were offered a million dollar salary, you would not take it. If you are not playing to win, then losing becomes a strong possibility. The reason for one to work is to maximize his/her potential and get compensated for it. I went to college to get “A GOOD PAYING JOB, NOT A BAD PAYING JOB. I AM DONE NOW!!!!

1911A1

July 6th, 2011
11:21 am

Chump change. Behold the 2009 salaries of pharmaceutical company CEOs (where the REAL money in healthcare can be found):

1. Fred Hassan – Schering-Plough – $49.65M

2. Bill Weldon – Johnson & Johnson – $30M

3. Miles White – Abbott Laboratories – $26.2M

4. John Lechleiter – Eli Lilly – $20.9M

5. Daniel Vasella – Novartis – $20.24M

6. Jim Cornelius – Bristol-Myers Squibb – $18.2M

7. Richard Clark – Merck – $16.8M

8. Robert Coury – Mylan – $16M

9. Jeffrey Kindler – Pfizer – $14.8M

10. Frank Baldino – Cephalon – $11.1M

Ben Casey

July 6th, 2011
12:17 pm

Why does any hospital even need a CEO? A manager maybe, or a head physician…but a CEO? What value does a CEO add, aside from being an overpaid suit who gives a speech at the Rotary Club now and then. Just eliminate the CEO position and use the money for patient care.

A.S.Mathew

July 6th, 2011
10:51 pm

Mr. Ben Casey: I do agree with you. Years back, I did work in a small hospital, and most
of the time, the CEO was not in the office. He had his son as V. President and a bunch of V. Presidents. The CEO will read Wall street
journal and walk around for exercise, but got a very fat salary. The
patients had to pay for so many unnecessary checks, and a bunch of
people at the top level got heavy salary by using the bottom line
employees and the sick people. Hospitals lost the humanitarian vision, but a pure business like the airlines industry charging and over charging for everything possible from the sick people. When the diarrhea patients open
the bills at home, they will have to rush to the hospitals immediately
for heart attack.

Roadie

July 7th, 2011
1:40 pm

If the CEO’s were held accountable like the front line managers, they would all be fired. I’ve only worked in the healthcare industry for the 10 years I’ve been with my current employer. The waste is obscene. My “not for profit” employer begs for money from the community while standing by and watching the waste of millions of dollars worth of time, equipment and supplies. It’s disgusting! And if you try to point it out, you face retaliation as a “trouble-maker”.