The American Hospital Association has penned a letter in response to a recent article by lawyer and journalist Steven Brill on hospital CEO pay, reports AHA News Now.
In the article — published by Axios and called "Stay in a hospital, pay the CEO $56 a night" — Mr. Brill presents findings on CEO pay per patient day at hospitals nationwide.
For his research, Mr. Brill merged American Hospital Directory data about hospital operations, including patient beds and total patient days, with Internal Revenue Service data on what nonprofit hospitals pay their heads. He ended up with a list of the reported annual payouts to CEOs (ranked by number of hospitals in their systems) divided by the annual number of hospital patient days.
Now Axios has published an AHA letter responding to Mr. Brill's recent article.
"'Stay in a hospital, pay the CEO $56 a night,' highlighting Steven Brill's short sighted attempt to correlate CEO compensation to patient days is both uninformed and unreliable," writes AHA President and CEO Rick Pollack. "CEO compensation for tax exempt hospital system executives is determined by individuals with no conflict of interest and who are charged with protecting the best interest of the hospital system and the community it serves. Moreover, [Mr.] Brill's methodology of tying compensation to inpatient volume utterly fails to recognize that hospital systems are much more than the sum of their inpatient beds."
Mr. Pollack also noted increasing outpatient volume nationwide has reduced the need for inpatient stay. Additionally, he noted the complexity of hospital systems, which typically include other skilled care facilities as well as community outposts.
"The unique challenges hospital and health system CEOs face and the complexity of their jobs and institutions should be reflected in their compensation. Recruiting, retaining and rewarding the most able leaders available is part of the hospital's obligation to the public it serves," Mr. Pollack added.
Mr. Brill defended his article.
"In the article I readily acknowledged that patient days is not anything close to a perfect measure of a hospital CEO's duties, but wrote that it presented a good relative measure," he writes in response to Mr. Pollack's remarks. "And nowhere in his letter does Mr. Pollack attempt to explain why, using that measure, the CEO's of Greenwich [Conn.] [Hospital] and [Los Angeles-based] Cedars [Sinai Health System] earn so much more than the CEOs of Mayo [Clinic] or the Cleveland Clinic."