No correlation between hospital CEO pay and either quality or cost

http://bangordailynews.com/2012/07/06/health/high-pay-for-hospital-ceos-doesnt-spell-better-care-nh-study-finds/print/

Everybody agrees the health system needs to improve patient results even as it becomes more efficient. So shouldn’t we reward hospital managers who make progress in both areas? That doesn’t seem to be the case in New Hampshire, according to a new study from the New Hampshire Center for Public Policy Studies.

At a time when many contend that hospitals should focus on outcomes rather than the volume of care provided, in New Hampshire there is “virtually no correlation between hospital [CEO] pay and either quality or cost” at nonprofit health systems, the study said.

“Given these hospitals exist to provide quality health care and are required to provide community benefit and charitable care in light of their non-profit status, the lack of such a correlation is a significant concern,” New Hampshire Attorney General Michael A. Delaney said in a prepared statement this week. The New Hampshire Department of Justice regulates the state’s nonprofit sector.

Instead, the CEOs’ compensation packages correlated closely with the size of the institutions they ran, the study found. The bigger the system, the more the CEO generally made. The boss of Lebanon’s Mary Hitchcock Memorial Hospital ($1.1 billion in revenue) pulled down $785,000 in 2009, while the CEO of Colebrook’s Upper Connecticut Valley Hospital ($15 million in revenue) made $150,000.