Wednesday, February 25, 2009

Are the salaries that medical schools pay to physician-executives anyone's business?

Three of the top four (and eight of the top 10) highest-paid employees of U.S. colleges and universities were physicians, reports Jacob Goldstein in his Wall Street Journal health blog. (The top spot went to a college football coach, U.S.C's Pete Carroll, at $4.4 million.) The next three highest earners were physicians:

David N. Silvers, a Columbia dermatologist, $4,332,759.

Michael M.E. Johns, Emory's executive vice president for health affairs, $3,753,067.

Arthur H. Rubenstein, University of Pennsylvania executive vice president and dean, school of medicine, $3,335,767.

Goldstein comments that, "The leading place of docs on the list is a reminder of just how much money flows through medical schools and academic medical centers, both in the form of reimbursements for patient care and federal research dollars."

The comments posted in response are well worth a read.

Some expressed concern that a misperception may be created that all physicians are paid so handsomely when those in the trenches - especially primary care doctors - make only a small fraction of the money paid to these executives. One physician commenter asked "What message on the campus does it send to medical students? Does this represent nationality priorities when 40+ million people have no health insurance?"

Another physician writes "Academic medicine has lost its mind. They preach dumb healthcare policy while collecting overinflated salaries. What hypocrisy. I would bet the barn that not one of these guys could survive the rigors of the real world practice of medicine in the trenches of primary care. Yet they pontificate from their ivory towers. Eventually these towers will fall."

Others noted that the reported compensation levels are not out of line when compared to other CEOs of successful companies and other learned professions.

My favorite: "If only the docs learned to coach football ..."

Is it really anyone's business what these physician-executives are paid?

Believers in market-based capitalism would say no, physician executives, like anyone else, have the right to earn what the market will bear. And academic medical centers, like any business, have the right to pay top dollar to attract top talent.

The counter to this is that medical colleges and academic medical centers are not like any other business. They serve a public mission of teaching the art and science of medicine to the next generation of physicians. And they receive billions of dollars from federal and state governments.

My guess is that at a time when the salaries of executives in other businesses receiving federal funding are under scrutiny, physician compensation in academic medicine will be viewed as fair game.

Academic medicine will have to address a public perception that taxpayers can't afford to subsidize high physician executive salaries, when millions of Americans have no health insurance coverage, when medical students graduate with an average of $140,000 in debt, and when primary care physicians in patient care earn 5% of the amount paid to the lowest of the top four physician-executives employed by medical colleges.

They might be well-advised to have a chat with their school's football coach on how to run a good defense.

Today's questions: Do you think it is anybody's business what physicians in academic medical centers are paid?


Jay Larson MD said...

Physicians in academic medical centers have influence on medical student behavior. If a major
consideration is money, then our health care system is most assuredly doomed to fail.

The comments of the WSJ blog are entertaining to read. The unfortunate aspect of reporting these physician salaries is that the public thinks that ALL physicians earn the same income.

Here is one way to look at it; the combined salaries of Silvers, Johns, and Rubenstein could be used to pay 75 general internists $150,000 per year.

Steve Lucas said...

What is now decades ago, I was taught in business school that not all organizations are to be run as a business. Three related examples are medicine, education, and the clergy. All three require bright well educated people, reflecting the personality types needed to reach the academic levels required by their position.

In the last decade we have seen a shift towards everything being treated like a business and there being no "greater good" concept in work or in many organizations. The result has been the inflation of salaries in what has been traditionally financially well rewarded positions, but positions that were not at the top of the income scale.

When a person accepts a seven figure salary with a public institution they should not then be surprised at the scrutiny associated with this income level. The public does have a right to know how its tax or donation dollars are being spent. The flow through to generate this type of salary is tremendous.

Comparisons with major football coaches is a nonstarter since they effectively run a major corporation with a very definite profit motive. Often the football program will support all other sports programs at a major university.

An education by itself does not guarantee income, ask any art major. After achieving a comfortable standard of living the focus of academic medicine and others should be on the institution, not on personal wealth.

Steve Lucas

steve pearson md said...

I fail to understand why medical institutions such as these would pay executives exorbitant multimillion dollar salaries when I suspect there are literally hundreds of equally capable physicians in the world who would be willing to do these same jobs for a mere half to three quarters of a mill/yr. Especially as the financial stability of the entire medical system in this country is on the brink. If the academic medical centers in this country have not yet noticed - 'Rome is burning!' Also anyones salary which is ultimately subsidized or paid for with tax payers dollars is everyone's business.

Unknown said...

It's a shame to see the WSJ blog picking on such extremes. It really gives the public a poor perception of reality - the vast majority of physicians (especially those in academia) do not earn that much.