If you thought that physicians providing health care to patients were at or near the top of the list of the highest earners in the medical industry, you would be wrong — they are in the middle of the pack. An analysis undertaken on behalf of The New York Times found that the base pay for an insurance chief executive officer is $584,000; the average pay for the Chief Executive Officer of a hospital is $386,000; the average pay earned by a hospital administrator is $237,000; but a family-practice physician earns an average of $165,300, a general physician earns an average of $185,000, and a surgeon earns an average of $306,000 per year.
What’s more, the base pay of insurance chief executives is often just a small part of the yearly compensation and earnings they take home: for example, the chief executive of the insurance giant Aetna was paid $977,000 in salary for 2012 but his exercise of stock options and the value of his stock, in addition to his salary, was in excess of $36 million for 2012.
In another example from 2012, the former president of a mid-sized health system in New Jersey retired in 2012, earning a salary of only $28,000 but his total compensation was $21.7 (the almost $14 million retirement package included base salary, a bonus, an incentive plan, and the cumulative payout from his deferred retirement plan). What’s more, more than 20 vice presidents of the same health system earn in excess of $350,000 yearly; the new C.E.O. earns approximately $3 million per year; yet the same health system paid one of the largest fines to resolve Medicare fraud charges in 2006 (the health system’s hospital bills are reportedly more than twice the national average for many medical procedures).
On the other end of the spectrum of compensation paid to medical industry health professionals are emergency medical technicians, whose average pay is $27,400 per year; staff nurses who earn an average of $61,900 per year; audiologists who earn an average of $72,600; and, physical therapists who earn an average of $78,100.
The costs in the United States for the business of medicine is far greater than in any other industrialized nation: the per capita expense for health insurance administration in the United States was $606 in 2011, compared to $277 in France, $237 in Germany, $148 in Canada, and $38 in Norway. It is reported that between 20% and 30% of health care costs in the United States are administrative costs.
While hospitals and health insurers argue that they pay high compensation to executives in order to attract the best candidates for positions, and that the top earners’ compensation packages are determined and approved by allegedly independent executive compensation committees, many people are rightfully outraged that so much money is being siphoned off from funds that could and should be used to provide direct health care benefits to patients — how many New Jersey patients could have benefited from medical care and treatment provided by the $21.7 million paid to the single health system executive?
Who is looking out for and protecting patients who pay such high costs for health insurance coverage from health insurers, whom they are constantly fighting with regarding denied services and care?
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