Hospital Technology and Patient's Satisfaction Linked to CEO's Pay

Did you know that a hospital CEOs paycheck is essentially based on the hospital technology and patient's satisfaction.

According to a recent study, researchers from the Harvard School of Public Health in Boston analyzed records of hospital surveys, tax returns, costs and performance reports to find out exactly that.

They also examined levels of salaries from hospital CEOs in 2009 and considered the size of the hospital, quality data and other information from 2008 in order to verify if these are the basis of the 2009 CEO paycheck.

Data from 2,671 private and non-profit hospitals provided salary information marking a total of 1,877 chief executive officers. On average, that means that a hospital CEO would take home $596,000.

However, it's important to note that the distribution of the pay grade is widely spread. For instance, the lower 10 percent has an average amount of $118,000 per year while the higher 10 percent earn close to $1.7 million.

Those who earned less were typically assigned to hospitals in smaller, more rural communities that showed no teaching functions. Higher earning groups were assigned to cities that used higher technology in larger capacities and showed overall higher patient customer satisfaction rates.

"I was hoping I'd see even some modest relationship with quality performance," lead study author Dr. Ashish Jha said, according to Reuters Health.

However, background information from the study notes that the hospital quality performance did not generally affect the CEO salaries.

"If you're going to ask doctors and nurses to be accountable, if you're going to ask patients to be accountable ... then I think we should make sure that everybody's in, and that senior managers of hospitals also have a stake in insuring high-quality care," Jha added, via the news organization.

Karen Joynt, MD, MPH, of the Harvard School of Public Health, believes that this study could potentially push health officials to look at exactly where funds are going as well as an incentive to change. 

"We would hope that this would spur hospital boards -- who generally are the ones who are setting CEO pay -- to really think about how the compensation packages that they're putting forward might drive behavior," Joynt said, via MedPage Today. "Maybe just having a little bit more information about the lack of correlation between quality metrics and CEO compensation might start a conversation about how we could use compensation as a tool to help incent the kind of behavior and the kind of priorities we think are most important in nonprofit hospitals."

What do you think?

More information regarding the study can be found via JAMA Internal Medicine.