Is $23 Million CEO Compensation The Reason Your Hospital Bill is So High?

stethoscopeBeen to the hospital lately? Check in to Good Samaritan in Downers Grove or St. Lukes in Wisconsin? The former parent companies of those two hospitals, the Advocate and the Aurora Health Care Systems, joined up last year and the new hybrid, Advocate Aurora Health is now 27 hospitals huge!

I hope you got great care from all the health care professionals that took care of you in the Operating Room, or Emergency Room, or on the wards.  You know they work hard, with crazy hours and high-pressure situations, and I'm sure you don't begrudge them decent compensation.

And I am sure you appreciated all the "back-room" personnel that were involved in your care--all the lab techs (my favorites) and the nutritionists and the housekeeping crew too. They are staffing the hospital 24/7 and certainly deserve a decent, living wage, which is all most of them ask.

But like all businesses (and yes, health care is an enormous business) there is a big "C" suite keeping it all together. You know, Chief Executive Officer, Chief Operating Officer, Chief Financial Officer and so on down the line. Ever think about them, and wonder what the numbers were on their paycheck?

Crain's Chicago Business newspaper has the answer. An April 26th article gives the 2017 salaries for some of the Chicago area's top hospital execs. Advocate Aurora is unique with 2 Co-CEOs, Jim Skogsbergh, and Nick Turkal--with a combined 2017 annual income of $23 million. Believe me, that would pay for quite a few nurses or lab techs!

The Compensation Committee that determines executive salaries might consider that number a bargain. After all, it is less than $1 million per hospital. And competition for top talent is fierce. If they weren't running hospitals these guys could be running hedge funds and making billions instead of millions. Or running Boeing (2018 income for CEO $23.4 million, 2019 income probably a lot less.)

But considering that according to ZipRecruiter the average salary for the CEO of a Chicago based company is about $150,000, Skigsbergh and Turkal should be pretty, pretty happy with their incomes and must be doing pretty, pretty good jobs. In fact, Becker's Hospital CFO Report reports that since the merger Advocate Aurora has seen an increase in revenue and outpatient volume. That's good for all those nurses and lab techs who want to keep their jobs.

Yes, healthcare is expensive in the USA. But if you are CEO of a big hospital chain,  you can afford it!

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The above is the opinion of the author and not Uropartners LLC.

photo credit: wuestenigel Concept of medical education with book and stethoscope via photopin (license)

 

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