Hospital Compensation:

Nationally Representative Data on Chief Executives' Compensation

HEHS-94-189: Published: Aug 16, 1994. Publicly Released: Sep 16, 1994.

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Pursuant to a congressional request, GAO provided information on hospital chief executives' compensation from 1989 through 1991, focusing on the: (1) compensation these executives received for overseeing hospital operations; (2) factors that influenced these compensation levels; and (3) compensation paid to executives of not-for-profit hospitals by businesses related to those hospitals.

GAO found that: (1) chief executives received an average of $129,000 in compensation, including cash, benefits, and allowances for overseeing hospital operations during 1991; (2) overall, one-fourth of chief executives received less than $63,000 annually, while an equal number of executives received over $176,000 annually; (3) chief executives' actual annual compensation ranged between $31,000 to $849,000; (4) differences in compensation amounts are influenced by the hospital's patient load, the number and relative size of nearby hospitals, the hospital's geographic location and ownership type, and the hospital's financial performance; (5) executive compensation was higher at hospitals located in large cities with greater financial success, higher patient discharge rates, and a greater number of similarly sized hospitals located nearby; (6) although few executives received executive compensation from related businesses, these payments could be significant; and (7) of the executives who received payments from related businesses, their annual compensation increased between 6 to 138 percent over the amounts they received for hospital administration.

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