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Tell us: Should healthcare CEO salaries be capped?
Two Massachusetts legislators filed bills to cap “excessive” healthcare executive compensation.
Mass General Brigham (MGB) rolled out the largest layoffs in its history over the last two months due to a projected budget gap of $250 million, sparking some physicians and legislators in Boston to call for a cap on “excessive” healthcare executive compensation.
Two Worcester legislators, Senator Michael Moore and Representative James O’Day, filed bills in the House (H.1398) and the Senate (S.899), respectively, that seek to put a ceiling on CEO pay in publicly-funded hospitals like MGB.
Anne Klibanski, the chief executive officer of MGB, received more than $6 million in total compensation in 2022, according to the most recent tax documents filed by the non-profit health system.
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On average, healthcare chief executives made $11 million in take home pay in 2023, while the median was $4.1 million, according to an analysis of CEO compensation by STAT news. Those figures actually represent a small decrease in CEO pay from an average of $13 million and median of $4.3 million in 2022.
“Even in a down year, the median health care CEO made 51 times the median American household income,” STAT found.
The two bills, which were introduced at the end of February, would cap healthcare executive compensation at not more than 50 times the “minimum facility compensation,” which the bill defined as the salary received by a full time employee earning minimum wage, or if none, then the lowest-paid full time employee.
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The legislation doesn’t stop there. It would also impose a civil penalty on any CEO whose salary surpasses 50 times the minimum facility compensation. The penalty would be equal to the amount the CEO’s pay exceeds the cap.
Physicians and healthcare workers in Boston have rallied behind the legislation. The CIU/SEIU, the largest union representing “house staff” (meaning interns, resident physicians, and fellows) across the country, held a “Week of Action” in Boston to draw attention to the legislation. The union lobbied for the bills on Wednesday in front of the State House.
“We cannot allow the unchecked greed of hospital executives to continue at the expense of patient care and the well-being of healthcare workers,” Dr. Madison Masters, a resident physician at Mass General Brigham, said in a news release by the union. “It’s time to put our patients first and demand that our state legislature take action.”
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Should healthcare CEO salaries be capped?
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