The compensation of nonprofit hospital executives wasn't linked to processes of care, patient outcomes, or the charity care the facility provided, a retrospective observational study found.

Chief executive compensation -- which averaged $595,781 in 2009 -- was correlated only to the hospital's use of technology (P<0.001) and patient satisfaction (P=0.006), according to the study published Monday in JAMA Internal Medicine.

It's important to understand the factors that influence a CEO's compensation because executives drive a hospital's priorities, Karen Joynt, MD, MPH, of the Harvard School of Public Health, and colleagues explained in the introduction to their study.

But they found little correlation between nonprofit hospitals' traditional values -- charity care and mortality rates -- and their top leaders' pay, Joynt told MedPage Today in a video interview.

"We would hope that this would spur hospital boards -- who generally are the ones who are setting CEO pay -- to really think about how the compensation packages that they're putting forward might drive behavior," Joynt said.

"Maybe just having a little bit more information about the lack of correlation between quality metrics and CEO compensation might start a conversation about how we could use compensation as a tool to help incent the kind of behavior and the kind of priorities we think are most important in nonprofit hospitals."

The authors linked hospital characteristics such as financial, technology, and quality metrics and community benefit in 2008 with CEO pay in 2009. The analysis included 1,877 executives overseeing 2,681 hospitals.

Not surprisingly, executive pay was higher for those heading up larger hospitals ($550 more for each additional bed, P<0.001), at teaching hospitals ($425,078 more at teaching versus nonteaching hospitals, P<0.001), and in urban settings. Shepherding a hospital in a small rural town, for instance, was worth $195,553 less than being responsible for an urban facility.

But there was no association between the amount of charity care provided and CEO compensation (P=0.79) or other community benefit and CEO compensation (P=0.88), the researchers found.

Furthermore, they found no significant association between quality measures such as risk-adjusted mortality and readmission rates and executive pay (P=0.69) or between financial performance and CEO compensation (P=0.56).

"Boards may have an easier time assessing patient satisfaction than other quality metrics, such as risk-adjusted mortality rates, or may see patient satisfaction as a key measure of organizational performance and marketability," the authors wrote. "Of course, it is possible that boards reward CEOs on other factors that we could not measure, such as staff satisfaction."

While the correlation between teaching status, size, and urban setting were all expected, Joynt was struck by the wide variability in CEO pay otherwise.

"Perhaps if boards of hospitals were to say that we'd like to change how we actually incent CEOs, then we could potentially drive these organizations to behave in a way that more highly rewards or prioritizes things like community benefit and any of the quality metrics that we measure or other quality metrics that may come down the pike in the future," Joynt told MedPage Today.

She and her colleagues cited two recent studies -- one in Connecticut and one in New Hampshire -- that also found no correlation between CEO pay or community benefit.

In a day and age when healthcare providers' pay is increasingly tied to quality metrics, Joynt said the lack of tie between hospital performance and executive pay may change in the future as hospital payments are more closely tied to outcomes through programs such as value-based purchasing.

"Whether linking CEO compensation to quality metrics would lead to better care is unknown," the authors said. "An alternative possibility is that linking CEO compensation explicitly to quality metrics could have unintended consequences, such as reducing hospitals' incentive to provide to medically or socially complex populations."