hcrenewal | Inflated executive compensation in health care is rarely challenged, but when it is, the
responses are formulaic. Justifications are usually made by public relations
flacks who are accountable to these executives, or the executives'
cronies on their boards of trustees. As I
wrote in 2015,
and
in May, 2016, It seems nearly every attempt made to defend the outsize compensation
given hospital and health system executives involves the same arguments,
thus suggesting they were authored as public relations talking points. Additional examples appear
here,
here here, here,
here, and
here,
here and
here.
The talking points are:
- We have to pay
competitive rates
- We have to pay enough to
retain at least competent executives, given how hard it is to be an executive
- Our executives are not merely competitive, but
brilliant (and have to be to do such a difficult job).
Yet the examples above suggest that the work of a top health care
manager hardly is as difficult as that of a health care professional.
And as
we have discussed,
these talking points are otherwise easily debunked. But that certainly has not
stopped executive compensation from rising year after year.
The
plutocratic compensation given leaders of non-profit hospitals is usually justified by the need
to competitively pay exceptionally brilliant leaders who must do extremely difficult jobs. Yet even leaders
whose records seem to be the opposite of brilliance, or whose work does not seem very hard, often end up
handsomely rewarded.
Other aspects of top health care managers' pay provide
perverse incentives.
While ostensibly tied to hospitals' economic performance, their compensation is
rarely tied to clinical performance, health care outcomes, health care
quality, or patients' safety. Furthermore, how managers are paid seems
wildly out of step with how other organizational employees, especially
health care professionals, are paid.
Exalted pay of hospital managers occurred after managers largely
supplanted health care professionals as leaders of health care
organizations. This is part of a societal wave of "
managerialism." Most organizations are now run by
generic managers,
rather than people familiar with the particulars of the organizations'
work.
That CEOs would view the minor travails of bureaucratic
life as so significant suggests how deep they are within their managerialist bubbles, and
how little they understand and relate to what their organizations
actually are supposed to do, provide health care on the ground to real
patients.
Rather than putting patient care first, paying generic managers enough to make them rich now seems to be the
leading goal of hospitals. I postulate that managerialism is a major
reason the US health care system costs much more than that of any other
developed country, while providing mediocre access and health care
quality.
Improving the situation might first require changing regulation of
executive compensation practices in hospitals, improving its oversight,
and making hospital boards of trustees more accountable. But that would
be just a few small steps in the right direction
True health care reform might require something more revolutionary, the reversal of the
managers' coup d'etat,
returning leadership of health care to health care professionals who
actually care about patients and put their and the public's health
first, ahead of their personal gain. Of course, that might not be
possible without a societal revolution to separate managers from the
levers of power in government, industry, and non-profit organizations.
Remember the most salient example of managerialism now for most people
in the US is a an executive
with a Wharton business degree as the President of the United States.