Pandemic will have little impact on future of hospital pay, experts predict
In 2019 Hackensack Meridian Health’s former co-CEO, John Lloyd, was awarded $9.9 million in total compensation, making him the New York metropolitan area’s top-paid hospital executive that year, according to a Crain’s analysis of the most recent financial information available.
His haul, of course, predates the pandemic, during the height of which hospital professionals took pay cuts and accepted smaller bonuses in order to keep their facilities’ bottom lines in balance. But experts say that belt-tightening was likely a temporary blip, not a bellwether, for the area’s hospitals and health systems.
“Coming out of COVID, their job’s gotten harder, not easier,” said Allen Miller, CEO of Cope Health Solutions, a healthcare management consultancy, about the role of health system leaders. “I would assume the upward trajectories over the years to continue.”
Tom Bailey and Matt Leach, principals and senior consultants with Total Compensation Solutions, a New York–based management consulting firm, said institutions enacted pay freezes and temporary cuts in April 2020. Hospitals planned to give executives smaller bonuses for not hitting top-line revenue goals and to avoid bad optics. Payouts of incentive plans were similarly limited. By the fall, most had been reversed.
Going forward, experts say bonuses will be increasingly tied to the patient population’s overall health rather than the services provided. That shift was underway even before COVID-19, but the pandemic accelerated it, Miller said. That does not necessarily mean smaller bonuses will be doled out. Rather, patient health will be just another of many performance metrics, Leach and Bailey said.
Before COVID-19 took its toll on the nation and the economy, the New York area’s top-paid hospital executives and physicians reported millions of dollars a year in compensation.
Hackensack Meridian’s Lloyd retired at the end of 2018. The $9.9 million he received in 2019 was largely made up of his supplemental executive retirement plan, said company spokesman Ben Goldstein. His SERP was nearly $7.5 million.
The New Jersey health network, which includes 17 hospitals, uses a national executive compensation consulting firm to determine the sums, Goldstein said.
“The compensation of our most senior executives is aligned with performance and industry standards,” Goldstein said.
Lloyd was among nine hospital executives and five doctors who took home more than $5 million in 2019, a Crain’s analysis found. Executives and doctors needed to earn more than $2.3 million to make it onto the lists.
On the physician side, Dr. Joseph Levine, St. Francis Hospital’s chief of electrophysiology, held on to his spot as the top-paid hospital doctor with nearly $7 million in compensation in 2019.
Dr. Sheeraz Qureshi, an orthopedic surgeon at Hospital for Special Surgery, followed with $6.1 million, slightly less than his 2018 compensation but still enough to place him second on the list.
Miriam Laugesen, associate professor of health policy and management at Columbia University’s Mailman School of Public Health and author of the 2016 book Fixing Medical Prices: How Physicians Are Paid, said the pandemic may not do much to shift physician earnings.
And gender could continue to play a role. Laugesen said compensation data has shown that male physicians in the same specialty earn more than women, even after controlling for hours worked and other factors.
Emerging from the pandemic, some providers could find themselves better off. Although surgeries and other planned procedures were temporarily suspended, Laugesen said, the shift to telemedicine enabled many physicians to see more patients and have fewer cancellations.
Experts theorize that the use of telemedicine will remain popular, even as patients return to fully feeling comfortable scheduling in-person doctor visits.