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THOUGH the recent release of Medicare’s physician payments cast a spotlight on the millions of dollars paid to some specialists,there is a startling secret behind America’s health care hierarchy: Physicians, the most highly trained members in the industry’s work force,are on average right in the middle of the compensation pack.
That is because the biggest bucks are currently earned not through the delivery of care,but from overseeing the business of medicine.
The base pay of insurance executives,hospital executives and even hospital administrators often far outstrips doctors’salaries,according to an analysis performed for The New York Times by Compdata Surveys: $584,000 on average for an insurance chief executive officer, $386,000 for a hospital C.E.O. and $237,000 for a hospital administrator,compared with $306,000 for a surgeon and $185,000 for a general doctor.
And those numbers almost certainly understate the payment gap, since top executives frequently earn the bulk of their income in nonsalary compensation. In a deal that is not unusual in the industry, Mark T. Bertolini,the chief executive of Aetna,earned a salary of about $977,000 in 2012 but a total compensation package of over $36 million,the bulk of it from stocks vested and options he exercised that year. Likewise,Ronald J. Del Mauro,a former president of Barnabas Health,a midsize health system in New Jersey,earned a salary of just $28,000 in 2012,the year he retired,but total compensation of $21.7 million.
The proliferation of high earners in the medical business and administration ranks adds to the United States’$2.7 trillion health care bill and stands in stark contrast with other developed countries, where top-ranked hospitals have only skeleton administrative staffs and where health care workers are generally paid less. And many experts say it’s bad value for health care dollars.
“At large hospitals there are senior V.P.s,V.P.s of this,that and the other,” said Cathy Schoen,senior vice president for policy,research and evaluation at the Commonwealth Fund,a New York-based foundation that focuses on health care. “Each one of them is paid more than before,and more than in any other country.”
She added,“The pay for the top five or 10 executives at insurers is pretty astounding —way more than a highly trained surgeon.”
THOUGH the recent release of Medicare’s physician payments cast a spotlight on the millions of dollars paid to some specialists,there is a startling secret behind America’s health care hierarchy: Physicians, the most highly trained members in the industry’s work force,are on average right in the middle of the compensation pack.
That is because the biggest bucks are currently earned not through the delivery of care,but from overseeing the business of medicine.
The base pay of insurance executives,hospital executives and even hospital administrators often far outstrips doctors’salaries,according to an analysis performed for The New York Times by Compdata Surveys: $584,000 on average for an insurance chief executive officer, $386,000 for a hospital C.E.O. and $237,000 for a hospital administrator,compared with $306,000 for a surgeon and $185,000 for a general doctor.
And those numbers almost certainly understate the payment gap, since top executives frequently earn the bulk of their income in nonsalary compensation. In a deal that is not unusual in the industry, Mark T. Bertolini,the chief executive of Aetna,earned a salary of about $977,000 in 2012 but a total compensation package of over $36 million,the bulk of it from stocks vested and options he exercised that year. Likewise,Ronald J. Del Mauro,a former president of Barnabas Health,a midsize health system in New Jersey,earned a salary of just $28,000 in 2012,the year he retired,but total compensation of $21.7 million.
The proliferation of high earners in the medical business and administration ranks adds to the United States’$2.7 trillion health care bill and stands in stark contrast with other developed countries, where top-ranked hospitals have only skeleton administrative staffs and where health care workers are generally paid less. And many experts say it’s bad value for health care dollars.
“At large hospitals there are senior V.P.s,V.P.s of this,that and the other,” said Cathy Schoen,senior vice president for policy,research and evaluation at the Commonwealth Fund,a New York-based foundation that focuses on health care. “Each one of them is paid more than before,and more than in any other country.”
She added,“The pay for the top five or 10 executives at insurers is pretty astounding —way more than a highly trained surgeon.”