SEPTEMBER 23, 2017

Welcome to the Health Care Compensation Update eNewsletter
Editor: Benjamin R. Grant

C-suite Pay Raises Target Transformational Healthcare Leaders
Hospital and health system executives' compensation continues to soar and will likely maintain that pace as organizations search for a narrowing set of qualified executives to lead more complex operations across a consolidating healthcare landscape. The most significant annual pay hikes are being doled out to executives who are believed to be best qualified to navigate the path to a system that increasingly favors value over volume. Incentive packages tend to focus on systemwide metrics, including reducing variation in care and unnecessary procedures, patient satisfaction and other measures that follow new reimbursement models.

Overall, presidents and CEOs at health systems received a 7.6% year-over-year increase in median total cash compensation, from $1.04 million in 2016 to $1.12 million this year. Systems' chief operating officers drew the biggest annual increase in total cash compensation among top-tier executives, rising 10% to $843,400 for systems with more than $1 billion in net revenue and 7.5% to $506,000 at systems with less than $1 billion.

The biggest pay raises among all health systems went to the chief strategy officer, rising 13.9% to $548,900 a year; the top clinical research executive, up 11% to $455,300; top facilities executive, which increased 10% to $285,000; top compliance executive, climbing 9.2% to $291,000, and the chief operating officer, 8.7% higher at $701,000. Several new positions were added to the survey in 2017, including chief nursing officer/top patient care executive, chief technology officer, top public affairs executive, top community health executive, top clinical information/transformation executive and top quality executive.

Nonprofit Hospital CEO Salaries on Rise along with Healthcare Cost
As healthcare costs continue to skyrocket nationwide, the salaries of the chief executives at two local nonprofit hospitals easily topped $1 million in fiscal 2015. CEO compensation at nonprofit medical centers are consistently among the highest in the nonprofit sector, and that's drawn a critical eye from many who argue that there isn't enough being done to rein in national healthcare costs, which exceeded $3.2 trillion in 2015, or about $9,200 per American citizen. About 32 percent of that went toward hospital care, according to the federal Centers for Disease Control and Prevention. Hospitals registered as nonprofits are required to submit annual financial disclosures, known as 990 forms, to the Internal Revenue Service each year. Those reports must include the compensation of the organization's highest-paid employees.

The Top 10 Best Hospitals to Work for in 2017
Here's the list of the top 10 hospitals with the best employee reviews and why their staff recommend the organizations to colleagues:

  1. Massachusetts General Hospital in Boston
  2. Baptist Health South Florida
  3. Houston Methodist in Texas
  4. Montefiore Medical Center in New York
  5. Texas Children's Hospital in Houston
  6. Michigan Medicine in Ann Arbor
  7. Yale New Haven Health
  8. Children's Healthcare of Atlanta
  9. Florida Hospital, the largest hospital in the Central Florida health system
  10. Stanford Health Care in California

Docs Dominate Another Highest-Paying Jobs List
Physicians occupy LinkedIn's top six highest-paying jobs, and eight of the top 15 spots. The findings are the latest in a long line of studies showing that physicians are the nation's highest-paid professionals. Physicians accounted for eight of the top 15 highest-paying jobs, with most earning more than $300,000 a year, according to a new report from LinkedIn. The report, based on data gleaned from more than two million LinkedIn members in the United States, also found that healthcare is the only top-five paying industry with a greater proportion of women. The average salary for a medical doctor is $161,200, which is more than $80,000 higher than the average salaries of people with a four-year degree. Physicians occupy the top six highest-paying jobs on the list, and eight of the top 15 spots. The total median compensation in the LinkedIn report includes median cash bonuses, which can vary from $25,000 to $90,000 based upon specialty. The physicians, their rank, and their median total compensation in the Top 15 highest-paying jobs include:

  1. Orthopedic surgeon, $450,000
  2. Cardiologist, $382,000
  3. Radiologist, $374,000
  4. Plastic surgeon, $350,000
  5. Anesthesiologist, $350,000
  6. Emergency surgeon, $314,000

Survey Finds Many Doctors Prefer Being Paid a Salary Instead of Per Volume
While the country shifts to value-based care, a national survey found many doctors would actually prefer being paid a salary. The survey of 450 physicians by the Texas Medical Center Health Policy Institute in Houston found that 69% of doctors said their preferred way of being paid would be with a high proportion of their compensation as salary -- with a low proportion of their pay based on incentives -- or a straight salary with no incentives. Paying doctors a salary, instead of with a fee-for-service system, could also be a way for the healthcare system to cut costs by eliminating the overtreatment of patients, SAID Arthur "Tim" Garson, Jr., M.D., director of the Institute. "The data bears this out," he said, since studies suggest that the number of tests and procedures performed will decrease if more doctors were salaried.

Hospital-Doctor Clawback Provisions in Employment Contracts
Increasingly, physicians is solo or small practices are giving up entrepreneurship in favor of becoming hospital employees. The first legal step, usually involves negotiating an entering into an employment agreement with the hospital. One of the more significant provisions in a hospital/physician employment agreement is the treatment of "clawbacks," or recoupment of moneys paid by an insurance company. Typically, there will be two agreements, one between the physician and insurance companies, which existed prior to the contemplated hospital employment. The second will be between the hospital and the various insurance companies. These two agreements will always call for a clawback in the event payments need to be reversed for some reason such as medical necessity, or a coding discrepancy. Either the provider can write a check or have the money deducted from further payments. The trouble begins when the physician becomes an employee of the hospital. The recoupment which will be "deducted from future payments," no longer involves only the physician, but the hospital as well. Most physician-hospital agreements will contain language assigning the physician's income to the hospital, and which calls for cooperation in recoupment audits.



    Identifying and Managing Competencies in the Modern Health Care Workforce, The Essentials to Delivering a High-Quality Patient Experience
    Thursday, September 28, 2017
    1:00 p.m. ET, 12:00:00 p.m. CT 11:00:00 a.m. MT, 10:00 a.m. PT

    The modern health care environment is dynamic and patient-centric. In order to provide the kind of high-quality care needed in today's health care environment, your workforce not only needs to possess a distinctive set of competencies, but also must continually improve and develop their competencies. These competencies are essential to deliver a high-quality patient experience. In this session, Frederick P. Morgeson, PhD, will review recent research on the key competencies that are needed for success in the health care environment, including a recent competency survey of over 200 health care professionals. With the key competencies identified, he will define how to assess these competencies in job applicants and current employees, and offer tips for how to manage your workforce to ensure these competencies are developed and reinforced.

Health Informatics Specialist Salary

Median pay for Health Informatics Specialists in the United States lies in the neighborhood of $63K annually. Geographic location is the biggest factor affecting pay for this group, followed by career length. Job satisfaction is reported as high by the vast majority of workers. Female Health Informatics Specialists survey participants are more prevalent than men -- 60 percent of professionals. Most report receiving medical coverage from their employers and a strong majority collect dental insurance. The information for this rundown comes from respondents who completed PayScale's salary questionnaire.

Mercer and PayScale Announce Strategic Alliance for Compensation Data and Software Solutions

PayScale, the leading provider of compensation management software and real-time salary data, and Mercer, a global consulting leader in advancing health, wealth, and careers, and a wholly-owned subsidiary of Marsh & McLennan Companies, have formed a strategic alliance to bring together Mercer's expertise in compensation consulting and information products with PayScale's strength in technology and data science to advance compensation data and software solutions for clients and the future workforce. In connection with this alliance, Mercer will secure an equity stake in PayScale, which has built the world's largest crowdsourced database of salary profiles utilizing big data technologies. This investment builds upon the firm's leading position in reward consulting and information and its recent launch of Mercer Digital to support clients as they transition to new models of work that are enabled by digital technologies. For PayScale, this relationship enhances the company's portfolio and product capabilities with deeper consulting and data expertise to tailor solutions to customers' needs. As Mercer will provide a global channel for distributing PayScale's products, PayScale will provide a channel for Mercer's products. Together, they will collaborate to develop new, innovative compensation and workforce data products and solutions.

For a complimentary PayScale benchmark analysis for a position of your choice, please email BenG@payscale.com.

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Benjamin R. Grant