CEO salaries at nonprofit systems increased significantly between 2012 and 2019, and it could be a factor in hospital consolidation, one study found.
The study, published July 24 in Plos One and led by researchers from Rice University's Baker Institute for Public Policy, highlighted a link between rising CEO pay and larger healthcare systems.
Researchers compared data of 1,113 nonprofit health systems and hospitals in 2012 and 868 in 2019 by using IRS 990 forms from Candid and the National Academy for State Health policy Hospital Cost Tool.
In 2012, CEOs from the organizations studied earned an average of $996,000 when adjusted for inflation, jumping to $1.3 million in 2019 — an increase of 30%.
Pay increases were larger for CEOs at health systems with more than 500 beds. Compared to CEOs at systems with fewer than 100 beds, those leading larger health systems made 144% more than their counterparts in 2012 and 170% more in 2019.
"Our findings suggest that CEOs may be incentivized to consolidate health care systems in order to reap the financial rewards of leading a larger, more profitable health care system," lead study author Derek Jenkins, PhD, a postdoctoral scholar at the Baker Institute, said in a July 25 news release.