Hospitals: Chief Executives' Compensation, 1989-1991

GAO discussed the compensation that hospital chief executives receive for overseeing hospital operations, focusing on the: (1) factors that influence these compensation levels; and (2) executives' sources of additional income. GAO noted that: (1) the high salaries paid to some hospital executives have contributed to the increase in health care costs; (2) in 1991, hospital chief executives received an average of $131,000 in compensation for overseeing hospital operations; (3) the range of annual compensation for survey respondents was from $31,000 at a 48-bed hospital to $848,000 at an 880-bed hospital; (4) differences in executives' compensation are due to differences in hospital characteristics, inpatient data, financial performance, and location; (5) chief executives employed by large, for-profit hospitals located in the Northeast are more likely to receive higher compensation than executives at small, government-owned hospitals; (6) payments from hospital-related businesses have increased executive compensation by at least 20 percent; and (7) the Internal Revenue Service requires that not-for-profit hospitals report payments from their related businesses to chief executives and other key personnel.