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Questions And Answers About KHN's Hospital CEO Bonus Story

Jun 16, 2013

This KHN story was produced in collaboration with

Q. There are about 5,000 hospitals in the U.S. How did Kaiser Health News decide which ones to query for CEO incentive bonus information?

A. First we excluded the minority of hospitals owned by profit-seeking shareholders, since by their nature they focus on growth and the bottom line. We wanted to examine CEO bonus pay at hospitals founded to benefit their communities, so we contacted 30 of the biggest public and private nonprofit systems, measured by revenue. Every organization includes multiple facilities. Some, such as Banner Health and Adventist Health System, have dozens of hospitals.

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KHN, in collaboration with ABC News, investigates hospital leader pay at nonprofit hospital systems.

Q. Why does the level of information in documents KHN obtained about CEO compensation vary so greatly between organizations?

A. Public hospital systems are subject to disclosure laws intended to promote transparent government.  Often it took repeated requests, but they frequently supplied data on their executive bonuses that included details such as the payouts for each incentive target.

By contrast, private nonprofits need only list bonus amounts on an IRS form; check a box indicating whether the payments are tied to revenue or profits; and give a brief description if the answer is "yes." Many hospitals explain their bonuses without any specific information by stating the executives met "performance goals."

Some systems disclosed additional information at KHN's request, but rarely was the level of detail furnished by private nonprofit hospitals as rich as that provided by public institutions. Even so, consultants and industry officials say incentives for growth and the bottom line are as common among private-system CEOs as they are for public bosses.  

Q. Why are so many university-affiliated hospitals on the list?

A. The largest public systems tend to be anchored by large, academic teaching hospitals, which are often subject to public information laws.

Q. Does KHN's published table show all incentive goals for a given hospital system?

A. No. Goals listed on the table are intended to be representative. For full information see the primary documents. 

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