Ohio hospital CEO's earning huge paychecks

Posted at 10:11 AM, Mar 02, 2016

An exclusive 5 On Your Side investigation has found Ohio hospital CEOs are benefiting from dramatically rising salaries for hospital executives across the country.

We found hospital CEOs in Ohio earning up to $4 million a year.

At the same time, both prominent medical researchers and consumer advocates are warning that multi-million dollar salaries are linked to profit and growth instead of patient care.

A recent study published in the Journal of American Medicine found no association between CEO pay and patient care.

The study was conducted by researchers at Harvard's School of Public Health and surveyed 1,877 hospital CEOs salaries across the country.

Dr. Ashish Jha, one of the studies principal researchers, said "basic elements of quality health care is not something CEO's seem to be using compensation on."

Here's what hospital CEO's in Cleveland are earning annually :

  • Cleveland Clinic: $4 million
  • University Hospitals: $2.2 million
  • MetroHealth Systems: $1.1 million

We also reviewed CEO contracts at Ohio's two other public hospitals:

  • Ohio State University Wexner Medical Center: $1.1 million
  • University of Toledo Medical Center; $800,000

Plus, it's not uncommon for hospital CEO's to earn annual bonuses up to 40 percent of their salaries.

It's raising concerns among consumer watchdog groups as well.

"It's especially disturbing for taxpayers who are giving a non-profit hospital a tax break because they are expected to provide charity care to the community and at the same time the executive is making a million dollars a year," warned Carmen Balber, Executive Director of the California based Consumer Watchdog.

MetroHealth Medical Center is a public hospital that is supported with $32.4 million of taxpayer money--roughly 5 percent of the hospital's budget.

MetroHealth CEO Dr. Akram Boutros declined repeated efforts to discuss his salary.

Instead, Dr. J.B. Silvers, a nationally recognized expert on hospital CEO compensation and professor at Case Western Reserve's business school, insisted that Dr. Boutros is being fairly compensated when compared to his peers.

"We're going to look at peer groups of other hospitals of the same size, look at what their CEO's get paid and we want to be at the 40th percentile--in other words below average," said Silvers.

Dr. Boutros's salary is below average even with 30 to 40 percent bonuses that we found are not strictly tied to patient care.

Silvers is also a MetroHealth board member and helped determine Dr. Boutros's salary.

He admitted the salary is first tied to profits--then a series of other quality measures like patient care, diversity, hospital improvements and employee satisfaction.

But a check with a federal database of patient satisfaction levels and quality measures at hospitals across the country found MetroHealth fell below the national average.

Check Hospital Quality Surveys Here

Silvers argues those surveys may be misleading.

"Populations like ours, Medicaid populations, uncompensated care--poor people tend to rate organizations lower," said Silvers, " The outcomes are more difficult, compliance issues--all sorts of things, so there's a big debate whether those quality measures need to be risk adjusted for the type of population we have."

"We have to have a target in terms of financial performance because if you don't make the money you can't be in business," said Silvers.

The American Hospital Association reports 1 in 3 hospital nationwide are losing money and hospital finance experts that's underscoring the need to pay high salaries for the right CEO.

"In some cases, those hospitals are are forced to close, to merge or they are not really able to be successful in the marketplace because of bad decisions from the top," said Dr. Thomas Campanella, a professor of health care at Baldwin Wallace University.


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