Thursday, July 3, 2014

Docs Respond to Soaring CEO Pay

Zack Budryk, FierceHealthcare

Providers have been asked to accept decreasing reimbursements in the face of more bureaucracy and time consuming insurance and CMS / HHS requirements to bill and be paid. Providers have been asked to implement expensive HIT, EHRs, and meet mandated meaningful use requirements. These all subtract from the bottom line or net profit income for providers.  Hospital CEOs have no overhead burdens for their salary/bonus payments.

Recently the question was posed to physicians, " Are you fairly compensated as compared to hospital CEOs?

Only about half of all respondents in Medscape's most recent Physician Compensation Report believed they were fairly compensated, according to the article.

Healthcare CEO pay is skyrocketing, with the pay of the top 500 American executives tripling since the early 1990s. But how do doctors feel about these numbers, which vastly outweigh their own compensationThe primary difference between doctor and CEO compensation is that physician pay is based on Current Procedural Terminology (CPT) codes, whereas CEO compensation is much more at the discretion of the hospital. Although CEO pay might seem excessive, they achieve those salaries by making money for the hospital, Janice Boughton, a hospitalist in Moscow, Idaho, told Medscape.

Although CEO salaries are high across the board, some are particularly concerned about those of nonprofit hospital executives. Nonprofit hospitals receive the vast majority of donations to charities, and their CEOs have the highest pay levels among nonprofits,  

Internal Revenue Service (IRS) rules cap nonprofit CEO compensation at a "reasonable compensation" level, and the IRS encourages nonprofits to hire outside consultants to decide what that means for the organization. But rather than keeping CEO pay on the low end, Berger said, "there is a kind of logrolling, where the pay scales get ever larger … Now that it has started, it's hard to break the pattern."

Defenders of high healthcare CEO pay say it comes down to performance,FierceHealthcare previously reported. "As their stocks are performing at very high levels, those [healthcare CEOs] are reaping the benefits," Kevin Scott, co-founder and CEO of the Addo Institute.

In the face of the Affordable Care Act, can excessive CEO pay be justified when patients deductibles and premiums have soared..

Additional comments: Health Train Express

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