By NextBestFitExecutive pay and nonprofit status
Nonprofit hospital systems are tax-exempt but pay CEOs about $1.3 million on average, and community-benefit spending varies widely.
Evidence
- Nonprofit health system CEOs averaged about $1.3M a year; pay grew 30% from 2012 to 2019.Sources: NPR / Rice University (2024)
Who's affected
Who is hurt
- Taxpayers and public budgets: Tax exemptions for hospital systems forgo public revenue.
- Low- and middle-income households: Tax-exempt systems provide uneven community benefits.
Who gains while it lasts
- Health care executives: Nonprofit hospital executives receive substantial compensation.
Under your mix of paths
Paths that fix or soften it
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Root causes
- Weak community-benefit standards
- Board pay benchmarks against peers
Related costs
Open questions
- Should executive pay be limited for providers paid with public money?
Solution paths (2)
Open a path for what it fixes, what it creates or worsens, who gains and who loses, precedents, and how it connects to other paths. See all paths as a decision tree.
Require a minimum level of charity care and community benefit, and tie executive pay rules to it.
- +Executive pay and nonprofit status
- −Makes performance and quality hard to oversee
- −Solves only part of the problem
Under global budgets, administrative and executive costs are part of the negotiated budget.
- +Executive pay and nonprofit status
- +About $1 trillion a year in administrative cost
- −Makes performance and quality hard to oversee