What hospital CEOs are really worth: a world health viewpoint

To one who spent some 30 years in international health work, including planning for development of primary health care, clinics and hospitals in foreign countries, it still came as something of a shock to read Jim Dwyer’s report, “Immune to Cuts: Lofty Salaries at U.S. Hospitals” (New York Times, March 16, 2011).It appears that at major U.S. city hospitals, kept afloat by taxpayer public financing, top executives are paid millions of dollars, even as the hospital teeters on the brink of disaster, or as in the case of venerable Saint Vincent’s in Manhattan, it goes belly up. For years my own family made significant contributions to Saint Vincent’s without imagining that their donations would go to line the pockets of top executives of a failing hospital.At Bronx-Lebanon in 2007, for example, the CEO was paid $4.8 million. At New York-Presbyterian, the CEO was paid $9.8 million. At Mount Sinai, it was $2.7 million in 2008. At North Shore-L.I. Jewish, it was $ 2.4 million. Each of these major institutions has received substantial taxpayer support as well as more than $200 million a year from Medicare. By global standards, these figures seem astronomical.What does a U.S. city hospital CEO actually do for the money? That varies. Most major hospitals have been around for a number of years, and they largely run themselves. There are departments, units, sub-units, administrators, managers and assistant managers who keep the place running, while doctors, surgeons, nurses, lab assistants and attendants do the actual health work. My take: The CEO sits in his paneled office, receives reports and phone calls and attends periodic board luncheons. Occasionally the CEO has to make actual decisions or arbitrate disputes, as when underpaid, overworked nurses ask for a living wage. At the end of the day, the hospital CEO goes home by chauffeured limousine. (This, of course, is not the case at small country hospitals.)Averaging the above CEO remunerations at some $4.9 million a year, we can calculate that major U.S. city hospital CEOs earn more than 20 times the salary of the director-general of the World Health Organization, and some 50 times more than what heads of hospitals typically earn in, say, France, Britain, Tunisia or Thailand. In spite of this discrepancy, our U.S. city hospitals do not necessarily show better health outcomes or results for the money spent on CEOs. What does the director-general of the World Health Organization (WHO) do? That’s a fair question. The director-general of WHO runs an organization with far more medical staff and other personnel as well as more building facilities and infrastructure, located in some 120 different countries, than any single hospital. The director is responsible for far greater diversity of programs, and a greater range of activities, albeit at much lower unit cost. The director-general has overall supervisory responsibility for work in primary health care, basic water supply and sanitation, health manpower training in multiple languages, measures for control of major chronic and communicable diseases such as malaria, tuberculosis, yellow fever and dysentery in some 200 countries. Dr. Margaret Chan, today’s director-general of WHO, also oversees basic and applied research in tropical diseases, epidemiology, human reproduction, cancer, cardiovascular disease, radiation medicine and health economics. WHO sets the mandatory global standards for the design and development of vaccines against all strains of influenza in all countries of the world, including the United States.As if that were not enough, the director-general of WHO faces highly charged international political, cultural and legal challenges. WHO is in the unique position of being able to bring in medical support from all over the world and coordinate action to bear on a local or national problem or emergency. In this capacity, WHO supports the rest of the United Nations system and individual countries with humanitarian medical science-based assistance and emergency relief. WHO provides medical staff for refugee camps, for example in Israel and Palestine. When all is said and done, WHO is often left “holding the medical bag” after the passage of man-made disasters, such as war, famine, poverty and genocide. For example, following the Hutu-Tutsi massacres in Rwanda, Burundi and Congo in 1994, WHO had to deal with the burial of victims, help provide medical relief to refugees, clean up the water supply and control the outbreak of a new, deadly strain of epidemic “El Tor” cholera that was killing as many as 3,000 people in a single day.The director-general oversees WHO’s own response and the coordinated medical reactions of international agencies to natural disasters such as floods, pandemics, hurricanes, earthquakes, tsunamis and nuclear radiation accidents. For example, year after year, WHO has had to rush medical assistance to flood victims in Bangladesh following monsoon downpours in the mountains. Even today, WHO staff are on site in Japan, helping to bring relief and coordinate the necessary scientific, medical and technical response to the terrible current disaster in that country. In short, the director-general of WHO earns his/her keep.But the question is, do you think the CEOs of major U.S. city hospitals are worth the $2 million to $9 million we pay them annually? By “we” I mean patients and taxpayers. We could put the situation this way: For the price of just one major U.S. city hospital CEO, we could hire 20 directors-general for WHO. Or, alternatively, we could pay CEOs the price of only one director-general, still compensating CEOs reasonably, and all the while we would save millions of dollars for American patients and taxpayers alike.What’s the solution? New York Assemblywoman Deborah Glick is proposing to cap the overall compensation of CEOs of publicly financed hospitals in New York state at a reasonable limit of $250,000. That makes good sense, and it’s what we need to do nationwide. It will protect hospitals, lower health-care costs for everyone and help close the national and state deficits. It’s really a win-win situation. Sharon resident Anthony Piel is a former director and general legal counsel of the World Health Organization.