Executive compensation is set by St. Luke’s boards of directors. Compensation is based on an independent analysis of comparable pay packages offered at similar institutions across the country. The goal of the boards is to place executive salaries at or near the median salaries of executives at comparable health systems.
In 2010, St. Luke’s engaged Mercer, an independent executive compensation firm, to perform a survey of executive compensation in the health care industry.
The intent of the survey was to gather industry information that would help ensure St. Luke’s executive compensation remained competitive while taking into account the continued growth of the Health System and the expanded scope of executive responsibilities.
The survey was completed through a national market analysis that:
- Reviewed available published compensation survey sources for health systems and hospitals.
- Matched St. Luke’s executives to appropriate survey data based on current job description, duties and scope of responsibility.
- Determined appropriate adjustments to survey data to ensure comparability to St. Luke’s scope and scale (revenue size, number of employees, specific executive responsibilities).
- Compiled national compensation data for healthcare organizations of similar size based on total revenue.
- Took into account a base three percent annual salary increase, which reflected pay trend rates for executives in healthcare at the time of the survey.
The data obtained in the survey in conjunction with goals and performance measures set by the boards of directors was used as a basis for the boards to approve an increase in compensation for a number of executives at St. Luke’s during calendar year 2011.
Using the data obtained from the analysis, the Mercer presented a recommended compensation strategy for St. Luke’s. The strategy provided pay ranges above and below the median. The boards of directors approved salary increases that were at or near the median range.
A compensation analysis is completed on a regular basis for physicians and other healthcare specialties such as nurses and pharmacists.
To keep St. Luke’s commitment to provide the highest quality medical care to everyone regardless of their ability to pay, St. Luke’s puts a great deal of time and effort into recruiting and retaining high-quality physicians in a variety of medical fields. St. Luke’s relationships with physicians range from having privileges at the hospital to full employment.
For those physicians who choose to be employed, St. Luke’s must offer competitive pay and benefits.
Physician compensation is based on a range of criteria:
- Community need for medical specialty
- National surveys adjusted for local conditions
- Willingness to serve regardless of patients’ ability to pay
- Duration of relationship and contractual terms
To ensure physician compensation and benefits remain within industry standards and legal requirements for not-for-profit institutions, St. Luke’s periodically uses third-party consulting firms, as it does with executive compensation, to review St. Luke’s physician compensation arrangements.
Given the growing national shortage of physicians, recruiting and retaining physicians is more critical than ever to guarantee that people seeking care at St. Luke’s will continue to have access to the physicians and specialists they need regardless of their insurance status or insurance provider.
Unfortunately for many people seeking medical care, such access is becoming more difficult. Every day, an increasing number of physicians and hospitals turn away patients who have no insurance, inadequate insurance or are covered by government payers such as Medicaid and Medicare, to focus only on patients with insurance.
St. Luke’s competes with thousands of other hospitals across the country for a limited pool of experienced talent. To remain competitive, St. Luke’s must pay salaries that attract the level of professional excellence needed to provide the high quality care our patients expect. St. Luke’s believes compensation must also be tied to performance. At St. Luke’s our executive leaders, medical professionals and thousands of dedicated employees perform at a very high level to meet the needs of the people and communities we are privileged to serve.