Pay for Public Academic Health Care Execs Lags Private-Sector Brethren

May 2, 2005 (PLANSPONSOR.com) - Executives at public integrated academic health care organizations (IAHCOs) are not paid as well as their peers at private IAHCOs, according to Clark Consulting.

According to a Clark Consulting news release, CEOs at public IAHCOs made only 68% of what their peers at private IAHCOs brought home: $471,500 as compared to $659,300 at private organizations. The survey found that base salaries, incentive opportunity and actual cash compensation paid (salaries plus incentives) are significantly lower at integrated IAHCOs than they are at private IAHCOs. The survey examined academic health care organizations that are part of a university, or tightly integrated with a medical school and faculty practice.

“We chose to launch this survey because integrated academic medical centers are unique, relative to other health care organizations and often more complex,” said David Bjork, Managing Director of Clark Consulting’s Healthcare Group. The survey examined the compensation for 24 executive positions.

“The reason for the pay difference may be that public IAHCOs face two significant constraints that private IAHCOs don’t face,” Bjork continued. “Their budgets are often limited and executive pay at public IAHCOs is often subject to close public scrutiny.”

Bjork also pointed out that “since many of these IAHCOs are a part of a university and report to academic administrators, they are subsidiaries of the university, and we know that subsidiary health care organizations often have lower executive pay than free-standing organizations of similar size.”

The Clark Consulting Executive Compensation Survey for Integrated Academic Health care Organizations surveyed 30 academic health care organizations. Academic health care organizations interested in purchasing the survey should contact Elaine Sitterson at 800-327-9335 or elaine.sitterson@clarkconsulting.com.

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