Health Administration Salary

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According to a May 2014 New York Times article, the top earners in the medical industry are not medical doctors, but the professionals that oversee the business of medicine. In fact, the base pay of insurance executives, hospital executives, and hospital administrators surpasses physician salaries across the board.

An analysis performed by Compdata Surveys and published in the New York Times piece revealed that insurance chief executive officers (CEOs) earned a base pay of $584,000, followed by hospital CEOs at $386,000, and hospital administrators at $237,000.

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And these numbers do not even begin to reveal total compensation for these executives, as most top executives earn the bulk of their income in non-salary compensation. For example, the chief executive of Aetna earned a salary of about $977,000 in 2012; however, his compensation packaged totaled more than $36 million, thanks to vested stocks and options. Similarly, the former president of Barnabas Health, a health system in New Jersey, earned a salary of just $28,000 in 2012, but his total compensation that year was nearly $22 million.

These generous compensation packages are offered to attract and retain top-performing executives with the expertise necessary to effectively manage hospital systems and medical facilities within the increasingly complex U.S. healthcare system.

Salary Trends and Statistics for Professionals in Healthcare Administration

A number of recent surveys reveal what many already know: salaries for healthcare administration professionals continue to grow along with the demands placed on them to perform in increasingly sophisticated systems:

A 2015 article by Becker’s Hospital Review revealed that professionals in healthcare administration enjoy top salaries. Here’s what they found:

  • The average base salary for an independent health system CEO was $752,800 in 2014.
  • The average base salary for an independent health system chief financial officer (CFO) was $247,900 in 2014.
  • The average, annual salary for a chief information officer (CIO) in healthcare and medical services was $173,941 in 2015.
  • The average, annual salary for a chief experience officer (CXO) was $221,000 in 2015.

The 2013 National Healthcare Leadership Compensation Survey, conducted by Integrated Healthcare Strategies and the American Society for Healthcare Human Resources Administration, revealed that about 80 percent of systems and hospitals offer short-term (annual) incentives for professionals in healthcare administration in the form of bonuses and incentives.

An executive compensation survey from Modern Healthcare found that many executives in some of the top-paying positions saw large salary increases in 2015, driven largely by bonus packages tied to improved quality and financial performance. According to the Modern Healthcare survey, the average compensation package for CEOs was $1.2 million in 2015, an increase of 8.2 percent over 2014.

Just a few of the healthcare administration professionals to see large increases to their compensation packages were:

  • Chief operating officers: 7.8 percent
  • Chief financial officers: 8.4 percent
  • Chief medical officers: 6.4 percent
  • Chief nursing officers: 7.7 percent

The survey also revealed that total cash compensation for all healthcare administration job titles increased 6.3 percent in 2015. One of the major reasons for these large increases is the growing complexity of the challenges top leaders face at the system level.

Just a few of the contemporary challenges facing hospital administrators and similar healthcare administration professionals include:

  • The consolidation of hospitals and hospital systems
  • Mergers and acquisitions
  • Pressure to improve quality amid declining reimbursement
  • Implementation of government mandated health care
  • A shortage of qualified medical professionals

According to Sullivan Cotter’s Manager and Executive Compensation in Hospitals and Health Systems Survey, the following executives at healthcare systems saw the largest increases in average, total cash compensation between 2014 and 2015:

  • Clinical research executive
  • Mission services executive
  • Managed-care executive
  • Revenue-cycle executive
  • Chief financial officer

The survey also found that the following hospital executives saw the largest increases in average, total cash compensation between 2014 and 2015:

  • Chief nursing officer
  • Business development executive
  • Human resources executive
  • President and CEO (system-owned hospital)
  • Chief information officer
  • Chief operating officer (system-owned hospital)

Incentive packages for healthcare and hospital administrators continue to depend on quality, safety, patient satisfaction, employee and physician engagement, and the financial performance of the organization. The survey also found that many boards are utilizing long-term incentive plans due to the ambitious benchmarks executives are expected to meet.

Department of Labor Salary Trends for Professionals in Healthcare Administration

The U.S. Department of Labor, Bureau of Labor Statistics (BLS), the principal fact-finding agency for the U.S. federal government in labor economics and statistics, detailed salary trends for medical and health services managers, as of May 2014.

The BLS found that the average, annual salary for medical and health services managers was $103,680, with the top 10 percent earning more than $161,150. The top-paying industries for medical and health services managers during this period were:

  • Pharmaceutical and medicine manufacturing: $158,290
  • Navigational, measuring, electro-medical, and control instruments manufacturing: $154,550
  • Electronic shopping and mail order houses; $140,200
  • Scientific research and development services: $136,120
  • Business, professional, labor, political, and similar organizations: $133,250

The top-paying states for medical and health services managers were:

  • Washington D.C.: $131,160
  • California: $122,410
  • New York: $121,930
  • Connecticut: $117,680
  • New Jersey: $115,370

The top-paying metropolitan areas for medical and health services managers were:

  • San Jose-Sunnyvale-Santa Clara, CA: $157,510
  • Madera-Chowchilla, CA: $148,850
  • San Francisco-San Mateo-Redwood City, CA: $146,580
  • Vallejo-Fairfield, CA: $139,400
  • Santa Barbara-Santa Maria-Goleta, CA: $134,810
  • New York-White Plains-Wayne, NY-NJ: $130,060
  • Santa Cruz-Watsonville, CA: $129,030

The top paying nonmetropolitan areas for medical and health services managers were:

  • Mother Lode Region of California: $127,160
  • Eastern Sierra Region of California: $121,790
  • Western Central Nevada: $116,360
  • Sussex County, Delaware: $112,530
  • Nantucket Island Martha’s Vineyard: $112,500

The table below shows a full salary analysis for medical and health services managers in the US by state (US Bureau of Labor Statistics, 2014):

Area name
Employment
Annual mean wage
Alabama
2660
93020
Alaska
960
111750
Arizona
6660
108050
Arkansas
2860
79980
California
28980
122410
Colorado
3880
112060
Connecticut
4740
117680
Delaware
710
112100
District of Columbia
1790
131160
Florida
11190
108700
Georgia
6610
99540
Hawaii
1190
110730
Idaho
1860
78370
Illinois
13730
105880
Indiana
7940
86460
Iowa
5100
78450
Kansas
2840
84580
Kentucky
4340
92560
Louisiana
2790
89370
Maine
1800
97710
Maryland
9780
107260
Massachusetts
10600
108080
Michigan
11770
97870
Minnesota
6190
101040
Mississippi
2430
82120
Missouri
5210
99850
Montana
1140
81140
Nebraska
2530
92110
Nevada
1950
105540
New Hampshire
1550
97890
New Jersey
9140
115370
New Mexico
1980
104480
New York
27840
121930
North Carolina
7700
106160
North Dakota
800
80950
Ohio
15750
94770
Oklahoma
5330
84260
Oregon
3850
110500
Pennsylvania
13330
95190
Puerto Rico
990
74600
Rhode Island
1470
111590
South Carolina
4510
89220
South Dakota
660
93640
Tennessee
7710
88390
Texas
19460
97940
Utah
2380
94190
Vermont
690
92480
Virgin Islands
50
62910
Virginia
6570
101050
Washington
6750
113470
West Virginia
1580
89010
Wisconsin
6350
89870
Wyoming
700
90290

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