Are Exorbitant Corporate Salaries in Healthcare Unethical?

Melissa Walton-Shirley, MD


July 05, 2019

In the first Democratic presidential debate of 2019, Elizabeth Warren made the following point: “The insurance companies last year alone sucked $23 billion in profits out of the healthcare system, $23 billion. And that doesn't count the money that was paid to executives, the money that was spent lobbying Washington."[1,2] But medicine also has an issue with exorbitant executive salaries that isn’t working , especially for patients, providers, and employees.

Among the five top-paid healthcare executives,* according to The Business Journal's analysis, are:[3]

  • R. Milton Johnson, CEO of HCA Holdings Inc: $17,268,724

  • Patrick Fry, CEO of Sutter Health (partial year): $15,450,002

  • Tony R. Tersigni, president and CEO of Ascension: $13,933,318

  • Bernard Tyson, CEO of Kaiser Permanente: $10,039,235

  • Samuel Hazen, president and COO of HCA Holdings Inc: $9,529,878

Note the payroll for just two men in the HCA system in 2018 was $26 million. Next, perform a cursory mental calculation of the salary for the supporting CFOs and other corporate “0s” as well as the “necessary” framework of regional and statewide managers, assistants, and secretaries. Corporate salaries have built a ravenous machine with an urgent and perpetual need to be fed. Last year when I learned about these exorbitant salaries, I was ashamed, and this new information dampened my enthusiasm for having more nonurgent patient appointments added to my schedule. I also felt a tinge of resentment when I would hear about cutbacks or that a vacated position would not be filled.

Providing Care but Not Profits

Then the imbalance between corporate salaries, shrinking time allotments for office visits, and declining employee benefits was further highlighted by a call I received about a US physician whose life-long desire was to serve the poor and the downtrodden. She opened a clinic where she found immense joy in working with the slice of society that corporate medicine would prefer to ignore. The new physician thought things were going well. Suddenly she was notified that her clinic was not profitable. Eventually, her position was terminated and filled with a less expensive nurse practitioner. Really, you can’t make this stuff up. The wolves of Wall Street have nothing on medicine now.

LeBron vs Health Insurance CEOs

Is there any justification for multi-million-dollar salaries in a failing system? I’ve heard the arguments. They usually start with a comparison to the salaries of professional athletes and entertainers. But when LeBron James, for instance, takes home his paycheck, it doesn’t affect the death rate of his fans. No one is denied a much-needed additional staff member or piece of equipment; no one sees shrinking healthcare benefits or retirement plans because LeBron makes bank. No one nearly dies because, as happened to a patient I met a few years ago, lack of time during an office visit led to missing of the rise and fall of a 5.7 × 10-cm abdominal aortic aneurysm; no one misses out on much-needed echocardiography, stress testing, or nutrition education because their clinician’s feet never stopped moving during a rushed office visit.

The increasing demand for profitability in the business of healing has birthed conveyor belt medicine. It has caused a focus-shift toward relative value units rather than the value of care and has no doubt resulted in innocents being harmed despite being enrolled in some of the best healthcare systems in the world. We are in the greatest rush of our lives as practitioners so that, in part, we can support the multi-million-dollar salaries of medical executives and the entourage it requires to support them.

Time to Push Back

Healthcare professionals must push for things to change and be hard-nosed in the face of repercussions. Physicians are in a unique position to effect change, but we must never compromise patient safety or violate our Hippocratic oath. We could make some demands, though:

  • We must be very vocal that $17 million dollar annual salaries do not belong in a medical system where patients and employees are languishing.

  • We should request that boards of directors fill executive positions with well-trained but benevolent candidates who will work for a fraction of the current starting salaries.

  • We must demand a revolt against insurance companies that continue to mandate mindless prior authorizations and deny coverage for necessary testing, medications, and hospitalizations.

What would be reasonable repercussions if our demands aren’t met?

Perhaps we should consider a national “No Bill Day” when we omit the billing information for all patients for an entire day for any service. If that doesn’t garner the appropriate remedy, we could prolong it for an entire week. Yes, providers will bear the brunt of this action, but as individuals most of us could afford to lose a day’s salary. It’s a small sacrifice to help get things back on track, but an entire system that misses billing for a day might get some much-needed attention.

As with any huge conglomerate, there are far more drones than queens. Change in medical executive salary structure is not only possible but critical. For healthcare professionals to continue to serve those in need in the hopes of building a safer and more efficient system, sacrifice by the upper echelon in medicine is required. Patients, employees, and providers have already sacrificed enough.

*The analysis does not include all healthcare executives in US hospital systems, nor does it account for income earned by employees from outside sources, such as drug companies, medical device makers, and product royalties.


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