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Value-based care driving hospital CEO and COO salaries higher, survey finds

Chief financial officers and directors of care coordination are also earning higher salaries amid the industry's transition to new payment models.

Jeff Lagasse, Associate Editor

The ongoing shift from fee-for-service to value-based care gets a lot of attention for the revenue opportunities it is creating for hospitals and health systems and, it turns out, for the executives running those organizations as well. 

Medical group CEOs and chief operating officers, in fact, have seen their salaries steadily increase over the past year, according to a survey from the American Medical Group Association, which suggested that value-based care is driving much of the salary increase among executives as well as physicians. 

The national median total compensation for a physician CEO increased by 7.5 percent, while non-physician CEOs say their salaries jump 11.1 percent. COOs saw a 7.2 percent increase. Other traditional C-suite positions experienced an average 4.4 percent spike.

A notable chunk of that has come in the form of incentives. When it came to incentives, an analysis of executive roles indicated that the median "earned bonus-to-base ratio" -- a measure of the proportion of compensation driven by performance incentives beyond base salary -- increased for several executive roles over 2016. 

Non-physician CEOs led the pack at 24.9 percent, with physician CEOs and COOs close behind at 22.7 and 21.9 percent, respectively. CFOs had a 19.6 percent bonus-to-base ratio.

Value-based care has also brought about a renewed focus on operations, with resources slowly shifting from payer strategy and care model design to the implementation and orchestration of those investments. 

Consistent with this move to value-based care, one role that is key to these efforts is director of care coordination, which registered a more than 14 percent increase in median total cash compensation year-over-year.

This year's survey includes data from 55 medical groups across the country, representing more than 1,300 who were in their same C-suite roles when they took the survey last year. About 63 percent of those incumbents are from system-affiliated groups, while 37 percent represent independent groups. The survey is weighted towards mid- to large-size groups, with 73 percent of incumbents from groups of more than 100 full-time equivalent physicians.

Twitter: @JELagasse
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