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Wage gap between hospital executives and doctors is widening, study shows

Average compensation for CEOs at 22 major medical centers increased by 93 percent, while orthopaedic surgeons saw only a 26 percent increase.

Jeff Lagasse, Associate Editor

Over the past decade, salaries for hospital CEOs have risen much faster than for surgeons, physicians and nurses, reports a study in Clinical Orthopaedics and Related Research.

That accelerating wage gap reflects the growing cost burden of management and non-clinical worker wages on the healthcare system, the authors said.

Using publicly accessible data, they analyzed trends in compensation for hospital administrators compared to physicians and nurses between 2005 and 2015. The focus was on 22 major nonprofit healthcare systems across the country.

Adjusted for inflation, average compensation for CEOs at these medical centers increased from $1.6 million in 2005 to $3.1 million in 2015 -- a 93 percent increase. During the same period, compensation rose by 26 percent for orthopaedic surgeons and 15 percent for pediatricians, reflecting the higher and lower ends of doctor salaries, respectively. For registered nurses, wages increased by three percent.

In 2005, hospital CEOs made three times more than orthopaedic surgeons; by 2015, they made five times more. There were even larger increases in the wage gap between CEOs and pediatricians, from 7:1 to 12:1; and CEOs and registered nurses, from 23:1 to 44:1.

The researchers also looked at trends in the numbers and costs of management and other non-clinical workers. Nationwide, the cost-burden of healthcare worker wages increased from $663 billion in 2005 to $865 billion in 2015. Non-clinical workers accounted for 27 percent of this growth, management workers for seven percent, and physicians for 18 percent.

National healthcare expenditures increased from $2.5 trillion in 2005 to $3.2 trillion in 2015, with wages accounting for more than one-fourth of the growth. Increases in wages and overall spending occurred despite relatively stable use of healthcare services during the 10-year span.

A 2017 analysis revealed that healthcare has seen sharp increases in employment over the past 25 years, adding about 6.8 million jobs, a nearly 80 percent increase over that period. That eclipses all other private-sector industries, and ranks it second only to professional and business services. But most of the new positions are in non-executive roles, perhaps contributing to the slow wage growth.

The results show continued widening of the disparity in compensation between medical center CEOs and the doctors and nurses who provide patient care. While the study can't comment on the value of these executives, managers, and other non-clinical workers, the growth in costs "appears to outpace plausible growth in value," the authors wrote.

Twitter: @JELagasse
Email the writer: jeff.lagasse@himssmedia.com