Understand how we got here — and how to move forward.


August 17, 2022

Charted: How executive pay is increasing in health care

Daily Briefing

    As more CEOs and other leaders depart, health care organizations are increasing the base salaries and total cash compensation for several executive positions in order to attract new candidates, Caroline Hudson writes for Modern Healthcare.

    Ensure seamless leadership transitions

    Health systems increase pay to attract new executives

    Currently, hospitals and health systems are seeing a rise in CEO departures, with Challenger, Gray & Christmas reporting that 62 hospital CEOs left their roles in the first half of 2022. This is a 48% increase from the same period in 2021—and industry experts anticipate more departures through next year.

    With turnover in leadership positions on the rise, many health care organizations are facing fierce competition for suitable candidates. For example, data from SullivanCotter shows that almost 40% of health care organization have increased their efforts to recruit more executives over the past year.

    "The pandemic created the perfect storm, requiring organizations to meaningfully address their evolving workforce and talent strategies ... along with the overdue equity needs of their teams and patient populations," said Jessica Homann, VP at recruiting firm Furst Group.

    "Healthcare leadership jobs are challenging. They're difficult in the best of circumstances, but in this post-COVID world, the challenges for healthcare executives, I think, are higher and more challenging than they've ever been," said Lisa O'Connor, a former nurse executive and a senior managing director in the health solutions segment at FTI Consulting.

    To attract new executives, many organizations have increased the median base salaries, as well as the total cash compensations, for dozens of leadership positions.

    For example, in hospitals, median base compensation for C-suite executives, including CEOs, COOs, and CMOs, have increased between 3.0% and 3.6% from 2021 and 2022. Similarly, total cash compensation for C-suite executives increased between 14.3% and 19.8% from 2021 and 2022.

    Other top hospital executives, including human resources and hospital administrators, have also seen their median base pay (1.5%-4%) and total cash compensation (8.8%-16.8%) increase.

    Executives at health systems have also seen their compensation increase from 2021 to 2022. For C-suite executives, median base salaries increased between 3% and 6.5%, and total cash compensation increased between 4.5% and 15.6%.

    Health systems shift their priorities to meet new demands

    According to Hudson, many health care organizations have shifted their priorities when it comes to executives in order to meet changing demands, particularly due to the Covid-19 pandemic.

    "These are the folks who really have borne the brunt of addressing the pandemic and workforce shortages, and because of that, the need for the talent has been significant and the supply in talent in some cases has been curtailed because of the stress," said Bruce Greenblatt, managing director at Sullivan Cotter.

    Going forward, consultants say that employers are expecting the executives they hire to have high-level business acumen, as well as well-developed interpersonal skills. According to O'Connor, health care leaders are likely to face more regulatory scrutiny in the future as relaxed pandemic-era strategies return to normal and care models change.

    "I think the wish list [for the ideal candidates] is getting longer," said Michelle Johnson, a senior partner in health care at WittKieffer. "We've seen what works well, what doesn't work as well, and … there isn't the cushion from an organizational perspective—[financially], operationally. We need really the absolute top-shelf leaders." (Hudson, Modern Healthcare, 8/16)

    Have a Question?


    Ask our experts a question on any topic in health care by visiting our member portal, AskAdvisory.