Whether it relates to management or direct patient care, work in healthcare is associated to a high workload, increased responsibility, and requires a high level of professionalism. Such a level of responsibility and importance should mean high salaries for all employees, but this is not always the case. Not all healthcare jobs pay the same since some positions are much above the national median wage, and others may be below it. For example, the salaries of CEOs of medical institutions are several times higher than the average salary of other healthcare professionals. However, a high CEO salary is not always a guarantee of better-quality care for the patients.
Over the past few years, the burden on hospitals has increased dramatically due to the COVID-19 pandemic. Many hospitals have come under fire for continuing to pay their CEOs extremely high salaries and, at the same time, firing other workers and cutting their wages (Garber, 2021). To be sure, some hospital executives took pay cuts for several months to make up for financial losses, but less than one-fifth of hospitals have suspended CEO bonuses (Garber, 2021). Executive wages in the healthcare industry have been questioned because they are much higher than comparable jobs in other sectors.
Several studies have examined hospital CEOs’ salaries and their relationship to various hospital characteristics, including technology adoption, quality scores, financial performance, and public goods. They concluded that there is no correlation between the hospital CEO’s salary and hospital quality (Brock-Utne, 2022). However, there is a direct correlation between advanced technology, high patient satisfaction rates, and high CEO pay. This suggests that top-paid CEOs are better at resource management roles, helping modernize hospitals and embrace the latest technology. Patients of those hospitals where CEOs receive high salaries are more satisfied with the quality of services provided. At the same time, this may be due not so much to the high salary of the CEO but to the fact that such hospitals have more funds to equip comfortable rooms, maintain the required number of staff, and other characteristics that make patients’ experience better. At the same time, these hospitals do not show much difference in reducing patient mortality or other key measures of care quality (Brock-Utne, 2022). There is a rapidly growing wage gap between the top management of large non-profit centers and physicians (Du et al., 2018). At the same time, there is no proportional increase in the use of medical services. It indicates a significant growing burden of non-clinical tasks in healthcare.
In an era of rising healthcare costs, the number and value of non-clinical workers, especially hospital management, have come under closer scrutiny. Compensation for hospital managers, especially at large non-profit medical centers, and the “wage gap” between physicians and medical staff are a hallmark of the healthcare industry. There is no evidence that the CEO’s salary directly affects better patient care or warrants better quality care for the patients. However, there is a relationship with other important aspects of the functioning of a medical institution, such as the availability of advanced technologies, as well as high rates of patient satisfaction. For this reason, high management salaries are partly justified. Still, the significant “wage gap” among healthcare professionals should be reduced. This can lead to burnout of medical workers and doctors and significantly harm the healthcare system and the whole society.
References
Brock-Utne, J. G. (2022). Things you should know about hospital administration. Life After Residency, 97-101. Web.
Du, J. Y., Rascoe, A. S., & Marcus, R. E. (2018). The growing executive-physician wage gap in major US nonprofit hospitals and burden of nonclinical workers on the US healthcare system. Clinical orthopaedics and related research, 476(10), 1910. Web.
Garber, J. (2021) Does higher hospital CEO compensation mean better quality? Lown Institute. Web.