How Much Does a Health Administrator Make?
Healthcare has never been more complex or challenging – and that was true even before the compounding effects of the COVID-19 era that brought with it overwhelmed ICUs, staff morale issues and a run on basic resources.
Things were already getting dicey with administrators attempting a careful balancing act between accessibility and profitability as most states expanded Medicaid eligibility requirements, and a growing population of seniors living longer with more complex health conditions began placing a whole new level of demand on healthcare resources. Then when 2020 rolled around and introduced a worldwide pandemic to the mix, it put even more strain on an already overtaxed healthcare system.
Health facility administrators make it their job to understand the nuances of evolving medical technology while adapting amid a rising trend in provider mergers and consolidations. And they do it all while attending to the never ending need to handle the business side of healthcare by reducing costs while at the same time ensuring the best possible patient outcomes.
Intense political wrangling over healthcare legislation has left everyone wondering what’s next, but you can be sure the industry is hedging its bets and looking to drastically cut overhead. And since pulling that off is something that falls squarely in the laps of administrators and execs, salary packages in the ranks of leadership aren’t part of what’s ending up on the chopping block. In fact, healthcare organizations are forced to go big or go home when it comes to compensation packages for the top decision makers, strategists, and problems solvers, which in every instance means bigger paychecks at every level of administration and executive leadership.
The U.S. Bureau of Labor Statistics (BLS) provides an overview of the kinds of salaries that professionals in mid- to upper-level management and administration command. Compensation packages for executive leadership fall into a category all their own, where even base salaries for chief execs often surpass what resident physicians and surgeons can expect to earn; and for that we turn to the 2020 Hospital Executive Compensation Report published by consulting firm TCS and Crain’s Modern Healthcare Executive Compensation Survey.
Healthcare Administrator Salaries By Practice Setting
The business of healthcare presents a lot of challenges. Administrators have always been valued for their ability to handle it, and their salaries reflect that.
In the aftermath of the pandemic, administrators who can navigate a healthcare ecosystem more focused than ever on prevention, preparedness and risk management are absolutely crucial to the success of hospitals and healthcare systems they work for. This makes talented administrators a hot commodity, and providers are happy to pay generous salaries to retain them.
According to May 2019 statistics from the BLS, the average salary for healthcare administrators in the U.S. was $115,160. The top 10% in this field earned salaries that exceeded $189,000 during this time.
The highest earners in health administration (according to average salary) worked largely in non-clinical settings, such as pharmaceutical and medicine manufacturing ($204,300) and scientific research companies ($169,240), while those in more traditional hospital facility roles still pulled down some very respectable salaries, mostly north of the six-figure mark:
What Healthcare Administrators in the Nation’s Biggest Metro Areas are Earning
BLS numbers reveal that the highest-paid healthcare administrators work in areas of the country where the cost of living is higher than the national average and where some of the nation’s top healthcare systems are located.
NYC’s New York-Presbyterian Hospital – Columbia and Cornell and Los Angeles’ Cedars-Sinai Medical Center are all ranked among the top hospitals in the U.S. for their performance and innovation in an array of procedures and specialties, so it would be surprising to see a list where DC, California and New York weren’t ranked among the places where administrators pull down the highest salaries. Massachusetts might not be a perennial shoo-in for one of the top spots, but with Boston’s Brigham and Women’s Hospital ranked among the best in the East, you’d hope to see their administrators generously compensated.
The BLS also provides a detailed look at what health administrators are earning (50th – 90th percentile) in some of the country’s largest metro areas:
- Montgomery, Alabama: $90,560 – $146,550
- Anchorage, Alaska: $95,900 – $168,560
- Phoenix (includes Mesa, Scottsdale), Arizona: $106,410 – >$208,000
- Little Rock (includes North Little Rock, Conway), Arkansas: $81,780 – $143,770
- Los Angeles (includes Long Beach, Anaheim), California: $125,080 – $203,820
- Denver (includes Aurora, Lakewood), Colorado: $118,820 – $199,450
- Bridgeport (includes Stamford, Norwalk), Connecticut: $125,230 – >$208,000
- Wilmington (includes Philadelphia, PA and Camden, NJ), Delaware: $101,940 – $165,600
- District of Columbia (includes Arlington, Alexandria): $117,220 – $195,700
- Jacksonville, Florida: $87,380 – $154,980
- Atlanta (includes Sandy Springs, Roswell), Georgia: $100,860 – $194,450
- Honolulu, Hawaii: $122,700 – >$208,000
- Boise, Idaho: $92,360 – $155,700
- Chicago (includes Naperville, Elgin), Illinois: $109,410 – >$208,000
- Indianapolis (includes Carmel, Anderson), Indiana: $95,400 – $174,450
- Des Moines, Iowa: $79,650 – $141,490
- Wichita, Kansas: $84,310 – $130,600
- Louisville, Kentucky: $76,970 – $132,490
- New Orleans (includes Metairie), Louisiana: $99,630 – $164,260
- Portland (includes South Portland), Maine: $91,880 – $136,590
- Baltimore (includes Columbia, Townson), Maryland: $106,540 – $195,290
- Boston (includes Cambridge, Nashua, NH), Massachusetts: $120,480 – >$208,000
- Detroit, Michigan: $94,880 – $200,980
- Minneapolis (includes St. Paul, Bloomington), Minnesota: $108,390 – $183,910
- Jackson, Mississippi: $89,610 – $162,410
- Kansas City, Missouri: $102,610 – $161,380
- Billings, Montana: $97,430 – $155,670
- Omaha (includes Council Bluffs, IA), Nebraska: $105,180 – >$208,000
- Las Vegas (includes Henderson, Paradise), Nevada: $109,630 – $175,640
- Manchester, New Hampshire: $104,810 – $180,320
- Newark (includes New York City, Jersey City), New Jersey: $126,020 – >$208,000
- Albuquerque, New Mexico: $118,500 – >$208,000
- New York City (includes Newark and Jersey City, NJ, New York: $126,020 – >$208,000
- Charlotte (includes Concord, Gastonia), North Carolina: $96,150 – $163,870
- Fargo, North Dakota: $116,690 – >$208,000
- Columbus, Ohio: $93,350 – $166,100
- Oklahoma City, Oklahoma: $83,480 – $158,010
- Portland (includes Vancouver, WA, and Hillsboro, OR), Oregon: $112,960 – >$208,000
- Philadelphia (includes Camden, NJ and Wilmington, DE), Pennsylvania: $101,940 – $165,600
- Providence (includes Warwick, MA), Rhode Island: $114,060 – $207,840
- Charleston (includes North Charleston), South Carolina: $99,680 – $198,710
- Sioux Falls, South Dakota: $110,910 – $165,590
- Nashville (includes Davidson, Murfreesboro, Franklin), Tennessee $94,690 – $174,050
- Houston (includes the Woodlands, Sugar Land), Texas: $106,570 – $180,670
- Salt Lake City, Utah: $95,540 – $179,710
- Burlington (includes South Burlington), Vermont: $95,970 – $163,590
- Virginia Beach (includes Norfolk, Newport News), Virginia: $100,700 – $158,160
- Seattle (includes Tacoma, Bellevue), Washington: $116,250 – $206,920
- Charleston, West Virginia: $103,370 – >$208,000
- Milwaukee (includes Waukesha, West Allis), Wisconsin: $102,210 – $173,980
- Cheyenne, Wyoming: $88,930 – $137,650
Salary and employment data compiled by the United States Department of Labor’s Bureau of Labor Statistics in May of 2019. Figures represent accumulated data for all employment sectors in which medical and health services managers work. BLS salary data represents average and median earnings for the occupations listed and includes workers at all levels of education and experience. This data does not represent starting salaries.
All salary and employment data accessed October 2020.
Facility Size Has More to Do with What Healthcare Executives Earn Than Almost Any Other Single Factor
Organization size continues to be the defining factor when it comes to earning potential for healthcare administrators. The 2019 Modern Healthcare Executive Compensation Survey stressed the point that the success of a healthcare provider is inexorably connected to the acumen of its leadership. Accounting for a steady rise in executive pay is simply part of the cost of doing business in the healthcare industry.
Long-term, performance-based initiatives are standard, and salaries are going nowhere but up for these top-level pros. According to the report, pay increases ranging anywhere from 4-7% in the past four years have been the norm.
The following median base salaries highlight differences in pay for top-level hospital executives between 2018 and 2019:
Hospitals with Net Revenue Less Than $300 Million
Hospitals with Net Revenue of $300 Million or More
Hospital Systems with Net Revenue Less Than $1 Billion
Hospital Systems with Net Revenue of $1 – $3 Billion
Hospital Systems with Net Revenue of $3 Billion or More
Total Cash Compensation for Healthcare Executives
According to the Modern Healthcare Executive Compensation report, nearly half of all large healthcare systems reported using long-term incentive plans for their healthcare administrators.
In fact, in most hospitals and healthcare systems, executive compensation is directly linked to the success of the organization – not only in terms of financial performance but also in clinical quality metrics like reducing post-op infection rates and readmittance, and just plain old patient satisfaction. Some of the bigger healthcare systems use deferred compensation programs, which result in a big payout at the end of the healthcare executive’s contract.
The report provides a detailed look at just how much healthcare administrators are earning once incentives and bonuses are considered:
(median base salaries vs. median total cash compensation, as of 2019)
Regional Guide to the Salaries Healthcare Executives are Earning
TCS Total Compensation Solutions’ (a leading HR consulting firm) 2020 Hospital Executive Compensation Report, which collected compensation data on 28 executive and director-level positions found in 1,465 hospitals nationwide, highlighted what healthcare administrators are earning in different parts of the country.
As expected, salaries for healthcare execs vary according to region, with the Northeast region—a hub for some for the top healthcare systems in the world (e.g., Boston Children’s Hospital, Brigham and Women’s Hospital, Memorial Sloan Kettering Center Cancer, Mount Sanai Hospital, Yale-New Haven Hospital, etc.)—coming out on top for executive pay:
North Central Region
South Central/Mountain Region
The TCS report also highlighted what healthcare administrators are earning in some of the country’s largest metro areas:
Atlanta (includes Marietta, Decatur), GA
Dallas-Fort Worth, TX
Los Angeles (includes Long Beach, Anaheim), CA
New York City, NY
San Francisco (includes Palo Alto, Oakland), CA
Washington D.C. (includes Arlington VA, Baltimore, MD)
If you are ready to lead in the field, the healthcare industry is ready for well educated leaders.
TOP HEALTH ADMINISTRATION SCHOOLS
- District of Columbia
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Rhode Island
- South Carolina
- South Dakota
- West Virginia