What affects hospital CEO pay the most: Patient satisfaction

What affects hospital CEO pay the most: Patient satisfaction

Dan Diamond (@ddiamond) tweeted this slide from a lecture by Harvard’s Ashish K. Jha at this year’s Association for Healthcare Journalist’s Annual Meeting in Denver. The slide shows how CEO incomes are affected by different variables and contains a few interesting tidbits of information.

First, hospital CEOs earn around $600,000. Far more than most physicians.

Second, hospital CEO salaries are not significantly affected by multiple different, yet seemingly important factors, including “quality” scores, the number of patients who die in their hospitals, the number of readmissions to their hospital, or the amount of charity care they provide. Logically, it would seem that the payment system would want to incentivize hospital administrators to work on those topics: Improve quality scores, decrease hospital deaths, decrease readmissions, increase charity care. But payments systems apparently don’t work that way.

Want to know the thing that affects a hospital CEO’s salary the most? Patient satisfaction.

Highly favorable patient satisfaction scores add an average of $51,000 to the income of hospital CEOs.

When your CEO threatens your job because your satisfaction scores aren’t high enough, when your CEO relies upon the statistically insignificant data reported by companies like Press Ganey, and when your CEO ignores studies showing that highly satisfied patients are more likely to die and suffer adverse consequences, now you know why your CEO may be making those decisions.

Plaintiff attorneys are crazy for not raising this issue in medical malpractice lawsuits. Companies provide invalid statistics to hospital CEOs. Hospital CEOs knowingly rely upon invalid statistics to influence medical care.

Tie patient harm to the CEO’s decisions (and motives) and you have another defendant with deep pockets who isn’t subject to a malpractice insurance cap.

WhiteCoat is an emergency physician who blogs at WhiteCoat’s Call Room at Emergency Physicians Monthly and Dr. Whitecoat.

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  • Dr. Drake Ramoray

    The CEO of Kaiser made almost 8 million dollars in 2012.

    http://www.kaiserhealthnews.org/stories/2013/june/06/hospital-ceo-compensation-chart.aspx

    Increasingly the physicians pay is based in part on satisfaction scores by their employer. Below is how CEO’s expect doctors to practice to increase patient satisfaction scores.

    http://www.theonion.com/articles/physician-shoots-off-a-few-adderall-prescriptions,35718/

    One of the FP’s in my area left corporate med employ because he was “encouraged” to write more narcotic prescriptions to improve his patient satisfaction surveys.

    • ninguem

      That’s in the onion, it was meant as sarcasm.

      But the thing is, it’s true.

      You don’t know whether to laugh or cry.

    • SherryH

      8 million? That’s sickening. Literally.

    • Deceased MD

      That’s hilarious the onion. Does seem like yelp controls businesses to a great extent but never imagined any doc paid much attention to it. Is this for real ?

      • Dr. Drake Ramoray

        I suppose there are some docs that may modify their practice patterns based on patient ratings, say for examples like wait times, or time spent with patients.

        I have never heard it change their actual practice of medicine. The corp med example following it is however a true example.

        • Deceased MD

          Thanks. I’m with Ninguem. Don’t know whether to laugh or cry.

  • Anne-Marie

    Is $600,000 the average salary? Because I know what my local hospital CEO is paid (it’s a public hospital so his salary is on the record) and it’s maybe about one-third of this amount.

    Smaller hospitals cannot even begin to afford this level of salary for their CEOs. I would guess the average is being skewed upwards by the CEOs of the largest organizations who are commanding the top dollars.

    A more accurate comparison, at least for CEO salaries, might be to group hospitals by number of beds and ownership status, e.g., nonprofit, for-profit, city- or county-owned, etc.

    • http://onhealthtech.blogspot.com Margalit Gur-Arie

      You are correct. There is a huge discrepancy, and you need to add in the bonuses, which can be as large if not larger than the “salary” as it’s true for most CEOs.
      Here is the link to the original study (note that the study uses old 2009 data, and all numbers should be multiplied…)
      http://archinte.jamanetwork.com/article.aspx?articleid=1748832&resultClick=3

  • Patient Kit

    The CEO of NYC’s Health and Hospital Corporation (HHC), the largest public hospital system in the US, gets an annual salary of $393,000, which seems reasonable compared to the KP CEO’s $8 mil. The CEO of New York-Presbyterian Hospital, also here in NYC, made $4.35 million in 2012.

  • buzzkillerjsmith

    CEOs play their games, we play our games.

    But employed docs simply must unionize, then the job-threatening part will turn 180 degrees. CEOs who tick off the docs too many times will find themselves looking for new jobs. Gotta unionize, must unionize docs.

    Why hasn’t this happened yet?

    • Dr. Drake Ramoray

      It hasn’t happened yet because docs until very recently have had independent streaks. That is quickly changing as more fall under hospital employ.

      I think the biggest barrier in the corp med setting right now is payment discrepancy and the specialists and primary care will struggle with uniting. Things haven’t gotten bad enough for everyone yet for unionization to happen.

      I have often thought AACE would be a great vehicle for a union movement since there is such a limited supply of Endos (6000 in the US) but too many are taking the track I am and just limit or stop seeing diabetics. Could you imagine if Endos just came out and said as a group, yeah we aren’t gonna take care of diabetes anymore, good luck with that. (This would be an Onion article that would write itself)

      That is indeed the second part. I think if doctors weren’t able to go direct pay or concierge that doctors would unionize more quickly. In the span of medicine as a profession it has rapidly deteriorated in the last 10 years and continues to accelerate quickly.

      I predict unionization will happen during my career.

      • buzzkillerjsmith

        I agree that the cognitive doc-proceduralist divide will keep us all from unionizing. I am really thinking about the PCPs, ER docs, hospitalists.

        The CEOs pussyfoot around the moneydocs anyway.

        But the cognitive docs could easily grind things to a halt should Mr. CEO get out of line. And I for one would welcome endos, neuros, etc.

        • Dr. Drake Ramoray

          Well if the ACO/PCMH thing takes off and the administrative burdens force the cognitive specialists into the arms of hospitals then unionization will have that catalyst. For now the endos, and neuros I know are doing everything they can to stay out of those systems

          We have the same pay and work condition issues as PCPs but our limited numbers give us more leverage to stay independent.

          I would think the number of hospitalists and outpatient primary care would be enough for a groundswell for unionization.

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