Performance-Based Pay Hot as Healthcare Exec Salaries Rise
By - Median base healthcare salaries are on the up and up, according to recently released results within a 2015 executive healthcare and hospital compensation survey press release from Sullivan, Cotter and Associates. Data collected from over 27,000 healthcare executives and managers among 1,700 healthcare organizations claims executive compensation is evolving due to notable trends in payment-based performance favorability.
According to data, there was a 3 percent increase in median base salaries for hospital and healthcare executives since last year; a 3.6 percent was reported for health system jobs; hospital jobs were associated with the lowest reported increase of 3.6 percent.
Although reported growth apparently matches numbers associated with last year’s data, variation levels were noted due to organization size and category, states David Dethmers, SullivanCotter’s Manager of Information, General Industry Surveys. “Large systems with over $1 billion in revenue and large hospitals with $300 million or more in revenue saw median base salaries increase at a faster rate than their smaller counterparts,” says Dethmers, referring to respective increases averaging at 3.6 and 3 percent.
Although variation levels in base salary were indeed “generally consistent,” increases in median total cash compensation (TCC) of nearly 7 percent of top executive positions were additionally reported, according to the press release. Among health systems, this increase reportedly jumped by nearly 2 percent within a year to top 7 percent.
“Health systems continue to embrace performance-based pay,” says Tom Pavlik, SullivanCotter’s Managing Principal. “This year, 28% more reported hitting their annual incentive targets, and these payouts contribute to the overall increase in total cash compensation,” he adds.
Reported EHRIntelligence.com, performance-based pay may be a detriment to high-risk patients by coercing physicians to execute a "teach for the test" mentality.
Aside from such salary and annual incentive changes, complexity levels are also intensifying within executive healthcare roles, confirms the press release. Comments Kathy Hastings, Managing Director, Executive Compensation Practice Leader at SullivanCotter, “As health care organizations continue to consolidate and integrate in an increasingly competitive health care environment, an executive’s scope of responsibility and span of control is expanding. These changes are impacting the way in which executives are compensated."
Starting salaries reportedly compare to those of healthcare veterans
As HealthItAnalytics.com reported regarding other healthcare salary news, despite last decade’s economic crash, the health IT job sector generally appears to be going strong. Information technology jobs reportedly cover 2.5 percent of all healthcare openings, with this number likely to grow. Starting salaries across the greater industry generally top $113,000, according to a 2013 HIMSS compensation survey.
As is perhaps the case with many industries aside from healthcare, these salaries are generally higher in New York, New England, and California when compared with the South and the Midwest, says HealthITAnalytics.com. Workers racking up at least 2 decades of experience reportedly have salaries that are only slightly less than those just entering into the healthcare industry. However, executive managers are reportedly paid nearly twice that of a staff member or manager.
