Healthcare CEO pay is rising. Here's why.

Healthcare CEO pay has grown over the years, but why?

One reason for this trend could be that hospitals have added more board members from the private sector. According to Lown Institute President Vikas Saini, MD, these individuals are "oriented to the bottom line" and think about hospitals "like a regular business."

A study published in the Journal of General Internal Medicine found that 44% of the board members of the hospitals that received top rankings from U.S. News & World Report come from the financial sector, while less than 15% were healthcare professionals, according to an April 10 article from the Lown Institute. 

Another factor that could be spiking pay is nonprofit hospitals competing with for-profit organizations for executive talent. 

"When [hospitals] hire a new CEO, they're not going to pay below the median; they're not even going to pay at the median. They're saying, 'We've got to go higher.' And if everybody does that, it creates an upward spiral, and that's what we've seen for 30 years," Dr. Saini told the Lown Institute.

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