Issue link: https://beckershealthcare.uberflip.com/i/1460433
34 CEO / STRATEGY Average CEO pay by hospital size By Ayla Ellison N onprofit hospital CEOs make an average of eight times more than workers without advanced degrees, according to an analysis by the Lown Institute of more than 1,000 hospitals. e study, published in Health Affairs Feb. 10, found the gap between CEO pay and aver- age worker pay varied widely. Some hospital CEOs were paid twice the rate of other work- ers, while the highest paid received 60 times the hourly pay of general workers. e analysis revealed a relationship between hospital size and executive compensation. "Although both CEO compensation and work- er wage increase in a stepwise fashion as hos- pital size increases, increase in CEO compen- sation tends to exceed that of worker pay for larger hospitals, giving them a higher pay equi- ty ratio," according to the authors of the study. Across all nonprofit hospitals, the average CEO compensation per hour was $249, and the average hourly worker wage was $29. Here is the average hospital CEO pay per hour by hospital size and the ratio of CEO wage to other workers wage: Hospitals with fewer than 50 beds • Average hospital CEO compensation per hour: $130 • Ratio of CEO wage to other workers wage: 6:1 Hospitals with 50-99 beds • Average hospital CEO compensation per hour: $179 • Ratio of CEO wage to other workers wage: 6:1 Hospitals with 100-199 beds • Average hospital CEO compensation per hour: $239 • Ratio of CEO wage to other workers wage: 8:1 Hospitals with 200-399 beds • Average hospital CEO compensation per hour: $335 • Ratio of CEO wage to other workers wage: 10:1 Hospitals with 400 or more beds • Average hospital CEO compensation per hour: $517 • Ratio of CEO wage to other workers wage: 14:1 Among larger hospitals with 400 or more beds, hourly CEO compensation ranged from $88 to $3,289. Urban location and teaching status were associated with higher executive hourly compensation, according to the study. e analysis supported previous research showing hospital CEOs are compensated primarily for the volume of patients entering their hospitals. "is is part of the underlying business model that drives the nonprofit hospital landscape: Volume matters, and high-margin volume matters the most for the bottom line," the Lown Institute researchers said. An analysis published in Health Affairs last year by researchers with Arizona State Uni- versity's health policy center found no asso- ciation between hospital CEO compensation and the value scores received by the hospitals they oversee. Another study of 35 CEOs of Connecticut nonprofit hospitals found that they were incentivized from 1998 to 2006 to increase the volume of privately insured pa- tients at the expense of uncompensated care and public-pay patients. n How implementing care-at-home programs can reshape hospital strategy By Georgina Gonzalez H ospital-at-home programs are increasing in popularity with patients, and health systems are beginning to realize the potential cost benefits and improved health outcomes of these programs, according to a Feb. 2 report from consulting firm McKinsey & Co. As hospitals look to integrate hospital-at-home services into their care options, they should consider several strate- gic decisions and questions. To best implement care-at-home programs, health sys- tems should create maps of patient care journeys to de- cide along which points in their route patients may bene- fit from such programs. A map also helps health systems look at the gaps present in the care journey and informs strategy on potentially buying or partnering with home care companies. It's also important to work out how the program fits into the broader hospital strategy and wheth- er care from home should be used to expand the care base geographically. Identifying which patient groups to focus on, how the pro- gram will enhance existing health system objectives on pa- tient needs, and what unique operational challenges the program presents will help ensure hospital strategy is clear going into the program. Deciding which elements of the program would benefit from a partnership with an external company and which elements can be managed internally by the health system is another consideration. n