Language

English

Publication Date

10-1-2025

Journal

Medical Care

DOI

10.1097/MLR.0000000000002198

PMID

40846652

PMCID

PMC12422613

PubMedCentral® Posted Date

8-12-2023

PubMedCentral® Full Text Version

Post-print

Abstract

Background: Past research has documented that increases in profits and health system size, as well as increases in the reward generosity for improving these metrics play an important role in explaining increases in nonprofit hospital CEO pay between 2012 and 2019.

Objectives: To test whether hospital quality measures play a supplemental role in determining CEO pay.

Research design: We estimated linear regressions for 2012 and 2019 of the log of CEO wages on system or independent hospital characteristics, including quality. The regressions were used to construct a Oaxaca decomposition of factors associated with CEO compensation.

Subjects: One thousand forty-seven nonprofit health systems and independent hospitals in 2012 and 812 in 2019.

Measures: CEO compensation, hospital profits, charity care, hospital size, teaching status, system status, 30-day mortality rate for pneumonia patients, hospital-wide 30-day readmission rate.

Results: We find that better quality was more closely associated with higher pay among hospital CEOs in 2012 versus 2019. The inclusion of these quality measures in the analysis somewhat reduced the observed relative return for leading larger hospitals or health systems in 2012, but not in 2019. The link between quality and CEO pay is weaker in 2019 than in 2012.

Conclusions: The results suggest that nonprofit hospital CEOs are being rewarded more for leading large hospitals or systems, but not for providing higher quality care.

Keywords

Humans, Chief Executive Officers, Hospital, Salaries and Fringe Benefits, Organizations, Nonprofit, Quality of Health Care, United States, Quality Indicators, Health Care, nonprofit hospitals, CEO compensation, quality, financial performance, hospital consolidation

Published Open-Access

yes

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