2023 Salaries Revealed for Nonprofit Health System CEOs in Philadelphia Area
In a comprehensive review of compensation packages for health system executives in the Philadelphia region, a striking disparity has emerged between pay and system revenues for 2023. The analysis, conducted by Media News Source, scrutinizes the IRS Form 990 filings of twenty nonprofit health systems. This examination highlights the financial dynamics within healthcare leadership and raises questions regarding the justification of high executive salaries amid ongoing debates about healthcare accessibility.
Among the key findings, Al Maghazehe, CEO of Capital Health, earned a notable .55 million, placing him among the top five highest-paid executives in the sector for the fourth consecutive year. This amount is particularly remarkable considering that Capital Health’s reported revenue of .2 billion ranks it in the lower half of health systems. Furthermore, Maghazehe’s compensation surpassed that of Kevin Mahoney, CEO of the University of Pennsylvania Health System, who received .72 million while overseeing a significantly larger operation with .9 billion in revenue.
Joseph G. Cacchione, CEO of Thomas Jefferson University, topped the regional earnings with a staggering .38 million in his first full year in the role. Despite Jefferson generating approximately 0 million less in revenue than Penn, the system operated more hospitals and has since enlarged its scope through the acquisition of the Lehigh Valley Health Network, establishing a consortium with billion in revenue across 32 hospitals.
Madeline Bell, CEO of the Children’s Hospital of Philadelphia (CHOP), was also recognized as a leading executive, ultimately earning .75 million. The rising compensation figures for nonprofit health system leaders have intensified scrutiny from both lawmakers and patient advocates, who are increasingly questioning whether these organizations are fulfilling their charitable missions in exchange for substantial tax exemptions.
The debate around executive compensation has also found its way into the judicial sphere in Pennsylvania. A recent ruling by the state Supreme Court affirmed that nonprofit hospitals can tie executive pay to profitability. This decision is expected to have far-reaching implications on how compensation structures are devised within the health system context, as it distinguishes between the pay of individual hospital executives and those of system-wide leaders.
Additionally, the analysis revealed a significant distribution of executive salaries across multiple health systems in the region. For instance, executives at New Jersey facilities occupied five of the top ten compensation slots, demonstrating the competitive nature of health leadership positions. Cooper University Health Care’s co-CEOs ranked consecutively as sixth and seventh, with combined earnings surpassing many of their peers, further complicating the discourse surrounding compensation fairness in the nonprofit industry.
As health systems navigate the complexities of service delivery in an increasingly challenging economic environment, the discussion surrounding executive compensation and its justification remains pivotal. The implications of these findings prompt a renewed discussion on the alignment of capital allocation with mission-driven healthcare objectives, making it clear that transparency and accountability in such compensation structures are essential to maintain the trust of the public they serve.
