KHN uncovered a secret ingredient in the US health-cost spiral: CEOs at nonprofit hospitals reap large bonuses for driving revenue growth and patient volume. To our knowledge no one has ever systematically looked at how CEOs’ pay incentives are aligned toward growth and not the efficiency they often talk about. We looked at the 30 biggest private and public nonprofit hospital systems and found numerous examples of compensation explicitly tied to the revenue gains, volume goals, profit targets and overall expansion that many believe make the US health system unsustainable. We ran two sidebars. The first noted that it takes far more effort for journalists and the public to learn bonus details for CEOs of nonprofit, philanthropic hospitals than it does for CEOs of any publicly traded, for-profit corporation. The second was about the small minority of hospitals that have decided CEO bonuses for anything are a bad idea, and why.
