As somebody who has reviewed physician employment agreements for 40 years or so, I have to admit I am more than a little jaundiced when it comes to the subject of hospital executive compensation. I’m not altogether convinced that one health system CEO really “earned” the $35.5 million he was reported to have been paid in 2021. I’m sure the pandemic was hard on him. Seeing all those physicians exposing their lives on a daily basis would certainly take it out of a guy. And if you gave that money to the physicians, they would just blow it on extravagances, like appropriate protective gear (because if the hospital supplied it, that would come out of the CEO’s bonus, and that would obviously never do). Still, that’s kind of a lot of money, especially for a “non-profit.” Do CEOs have excessive call coverage requirements, I wonder?

This whole rant started when I was asked to review an employment agreement for a CMO position. I had just finished a review for an orthopedic trauma surgeon. There aren’t a lot of orthopedic trauma surgeons, and yet MGMA was able to get enough data to provide benchmarks for orthopedic trauma surgeons employed by a hospital in Pennsylvania.

Based upon the scarcity of orthopedic trauma surgeons, I was optimistic that I could get reasonably good data on CMO compensation. That wasn’t the case. The best I could do for a CMO was median compensation for a CMO in the eastern United States. It was impossible to narrow this down to hospital bed size, etc. Moreover, there was no data for the minor geographical area, and obviously there was no data for a given state.

I became suspicious that as an honored member of the C-suite, CMO compensation was not being reported. To test that suspicion, I tried to run a report on CEO compensation. I ran into the same issue. The figures MGMA was able to produce were highly suspect. According to MGMA, the median total compensation of a hospital CEO in the United States is $280,437. $605,296 represents the 90th percentile of CEO compensation.

We all see the articles on executive compensation. It seems highly unlikely that the CEO mentioned above had his compensation reported to MGMA. I believe that CMOs also benefit from this protection.

Obviously, it is one thing to report on the income of your employed physicians. If you are doing an excellent job reducing expenses by paying physicians the minimum possible, it is to everyone’s advantage (or at least everyone who hires physicians) to report physician income. But letting the poor unwashed masses have access to the income of the folks in the C-suite must be taking the concept of disclosure too far.

There is so much wrong in American health care. Excessive CEO salaries are just one minor symptom of a system that pushes physicians to the limit in the name of “efficiency.” I don’t begrudge CEOs making the big bucks – after all, they did spend a year or two after college learning their craft. What frustrates me is the lack of transparency. It’s perfectly fine to disclose physician salaries. But disclosing what the folks in the C-suite are pulling down is obviously not prevalent. The class system is alive and well in America.

You can hardly blame executives for taking advantage of the situation when it is so easy to do so. Having benchmarks for physician compensation is incredibly useful for evaluating potential employment opportunities. With the physician shortage in this country, I’m still frequently surprised at the lowball offers (compared to objective benchmarks) that are made to physicians. Obviously, CEOs and others in the C-suite are able to negotiate their best deal without any concern for patient care. I view this as just one of the numerous reasons why physicians need to have more say in the allocation of health care dollars in the American health care system.

Dennis Hursh is a veteran attorney with over 40 years of experience in health law. He is founder, Physician Agreements Health Law, which offers a fixed fee review of physician employment agreements to protect physicians in one of the biggest transactions of their careers. He can also be reached on Facebook and LinkedIn.