Becker's Hospital Review

11 Compensation Statistics are based on the following: Median compensation and median work RVUs are from the American Medical Group Association's "2014 Medical Group Compensation and Finan- cial Survey," a 2014 report based on 2013 data. The nationwide survey includes data from 289 medical groups with approximately 73,700 providers. Com- pensation includes base salary, plus variable com- pensation and voluntary compensation reductions. It does not include retirement benefits, pension, SERP or tax-deferred profit-sharing plans. Work RVUs, or relative value units, are units of value based on time, skill, training and intensity of ad- ministered services, using the CMS scale. Mean compensation for men and women, highest- paying and lowest-paying region, hospital-em- ployed compensation, multispecialty group practice compensation and single-specialty group practice compensation are from Medscape's "2014 Physi- cian Compensation Report." The report is based on responses from an online survey of 24,075 physi- cians across 25 specialty areas from Dec. 11, 2013, to Jan. 24, 2014. Compensation from this report in- cludes base salary, bonuses and profit-sharing con- tributions. Geographical regions are detailed at the end of the report. Highest and lowest offered base salary figures are from the Merritt Hawkins "2014 Review of Phy- sician and Advanced Practitioner Recruiting In- centives." The review is based on 3,158 permanent physician and advanced practitioner search assign- ments that were ongoing or conducted by Merritt Hawkins and sister physician staffing companies from April 2013 to March 2014. *Geographical regions: Northeast: New York, Connecticut, Rhode Island, Massachusetts, Vermont, New Hampshire and Maine Mid-Atlantic: Pennsylvania, New Jersey, Delaware, Maryland, West Virginia, Virginia, North Carolina and South Carolina Southeast: Tennessee, Kentucky, Louisiana, Missis- sippi, Alabama, Georgia and Florida Great Lakes: Minnesota, Wisconsin, Illinois, Michi- gan, Indiana and Ohio North Central: Iowa, Missouri, North Dakota, South Dakota, Nebraska and Kansas South Central: Texas, Oklahoma and Arkansas Northwest: Alaska, Oregon, Washington, Idaho, Montana and Wyoming Southwest: Colorado, Nevada, New Mexico, Ari- zona and Utah West: California and Hawaii n H ealthcare executives consider many factors when deciding which hospital, health system or organization to join, not least of which is compensation. Becker's Hospital Review has gathered 20 facts and statistics on healthcare ex- ecutive compensation for you to know. Further detail on surveys cited, such as respondent pool size and time of survey, is provided at the end. Compensation-Strategy Alignment 1. Forty percent of survey respondents said their executive compensation packages are either slightly or seriously misaligned with their organization's strategies, according to the 2014 Executive Compensation Survey report by HealthLeaders Media Intelligence. 2. Fifty-three percent of respondents believe their executive compensation packages are "pretty well aligned." A mere 7 percent of respondents think their organization's executive compensation packages are aligned well with their organization's strategies. 3. As far as aligning compensation and strategies go, 31 percent of respon- dents said change is needed while 17 percent believe change is not necessary. 4. Survey respondents indicated that incentives are weighted slightly toward team goals (55 percent) as opposed to individual goals (45 percent). 5. More health systems (41 percent) than hospitals (31 percent) or physician organizations (24 percent) have made or intend to make group or team in- centives for executive compensation packages. Executive Incentives 6. Operating margins serve as a basis for 60 percent of respondents' current team incentive payments, followed by clinical performance targets (59 per- cent) and staff engagement or satisfaction targets (51 percent), according to the 2014 Executive Compensation Survey report by HealthLeaders Media Intelligence. 7. In 2014, 12 percent of health systems reported having no annual incentive payout for C-suite executives, up from 4.5 percent of health systems in 2004, according to the 2014 Manager and Executive Compensation in Hospitals and Health Systems Survey from Sullivan, Cotter and Associates. 8. Sullivan, Cotter and Associates also found health systems offered the fol- lowing median target award opportunities to their executives in 2014: CEO — 35 percent (up from 31 percent in 2004) COO — 30 percent (up from 25 percent) CFO — 28 percent (up from 24 percent) SVP — 25 percent (up from 23 percent) VP — 20 percent (up from 19 percent) 9. Hospitals offered their executives the following median target award op- portunities, according to the Sullivan, Cotter and Associates survey: CEO — 30 percent (up from 28 percent) COO — 25 percent (up from 22 percent) CFO — 25 percent (up from 22 percent) SVP — 20 percent (down from 24 percent) VP — 17 percent (down from 19 percent) 10. Among health systems with more than $3 billion in net revenue, 57 per- cent had long-term incentive plans in place in 2014, up from last year, ac- cording to the survey. Base Salary Increases 11. Sullivan, Cotter and Associates found that although average base salaries increased across the board for many C-suite positions, CEOs at independent hospitals saw the largest average base salary increase (6.4 percent) between 2013 and 2014. 12. The average base salary increases between 2013 and 2014 for executives of health systems are as follows: 20 Statistics on Hospital, Health System Executive Compensation By Shannon Barnet

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