Few women leading the largest not-for-profit health systems, for less pay

Ellen Zane thinks it was probably her willingness to take risks and do hard jobs that landed her the top post at Tufts Medical Center, where she became the first female CEO in 2004.

“I found as a woman I had to do things that were uniquely difficult in order to be differentiated,” said Zane, now CEO emeritus of the prominent Boston teaching hospital and an adjunct assistant professor in the Harvard T.H. Chan School of Public Health.

Her rise didn’t mark a sea change in the industry, though. At least, not a swift one. Fourteen years later, only five of the country’s 50 largest not-for-profit health systems by operating revenue were led by female CEOs and those women made 67¢ for every $1 their male peers made, a Modern Healthcare analysis found. Total compensation for the female health system CEOs was on average $3.3 million in 2018, the latest year for which salary information is available, compared with $4.9 million for male CEOs.

The results align with Modern Healthcare’s 2019 analysis of the 25 highest-paid not-for-profit health system executives, all of whom were men. The first woman didn’t show up until No. 33.

Today the picture is slightly improved. Eight women are at the helm of the 50 largest not-for-profit health systems, with the addition of Dr. Anne Klibanski as CEO of Partners HealthCare in Boston, now known as Mass General Brigham, and Tina Freese Decker as CEO of Spectrum Health in Grand Rapids, Mich. Sue Thompson currently serves as interim CEO of UnityPoint Health, based in West Des Moines, Iowa.

Experts who study compensation say it’s a complicated mix of unconscious and conscious biases, internal and external forces and the slow pace of change that keep more women from getting the top jobs and, among those who do, from being paid the same as their male peers.

The few number of women leading health systems is made more striking by the fact that women make up three-quarters of the healthcare workforce, according to Census Bureau data. “It doesn’t make sense; it isn’t OK,” Zane said. “As each year goes by and more women have grown and developed more executive experience, I do believe that it will change. But it could change a lot faster if there was more focus on it.”

Marna Borgstrom, CEO of Yale New Haven Health, was the highest-paid female CEO in 2018 with total compensation of $4.7 million.

Borgstrom said that’s partly because she’s been with the organization, which drew $5 billion in revenue in 2019, for 41 years, including nearly 15 as CEO. Other CEOs might make less because they haven’t been with their health system or in their positions as long, she said. Borgstrom cautioned that total compensation can include things like retention payouts that could skew a single year.

Sutter Health’s Sarah Krevans was the second-highest-paid female CEO in 2018, having made $4.5 million in total compensation. Krevans, who declined to comment, assumed her role in 2016 as the Sacramento, Calif.-based health system underwent a reorganization. She had previously been chief operating officer of Sutter, which drew $13.3 billion in operating revenue in 2019.

Kaiser Permanente’s late CEO, Bernard Tyson, who died in November, was the highest-paid not-for-profit health system CEO in 2018, with $15.8 million in total compensation that year. Tyson had been with Kaiser for 34 years, and became Kaiser’s first Black CEO in 2013. Gregory Adams is now CEO of the Oakland, Calif.-based integrated health system, which drew $84.5 billion in revenue in 2019.

Ascension’s former CEO, Anthony Tersigni, was the second-highest-paid not-for-profit health system CEO in 2018, with $13.2 million in total compensation that year. Tersigni held the CEO spot from 2012 until 2019.

Just before he stepped down, Tersigni wrote an editorial for Modern Healthcare about the importance of closing the gender gap. The St. Louis-based health system, which drew $25.3 billion in revenue in its fiscal 2019, currently has three female vice presidents: its chief financial officer, general counsel and executive vice president for performance optimization and nursing operations. More than half of its board members are women.

This year, Ascension CEO Joe Impicciche created a new group to support female mentoring and support called GROW–Growth, Relationships and Opportunities for Women. “We have long believed that it is our responsibility to promote gender and racial diversity across our ministry, including doing more to ensure that women and minority associates have access to opportunities and are represented in our leadership roles,” Impicciche said in a statement. “We continue to make gender and racial diversity, inclusion, growth and promotion a top priority.”

All but one of Yale New Haven Health’s hospitals has a female COO and one has a female CEO. The health system is always working to further improve its gender and racial diversity at the leadership level, Borgstrom said. Yale New Haven Health regularly audits for pay equity, and not just in executive positions, she added.

“We have as diverse a senior management team across the system as I’ve seen,” she said. “I would stack us up against any health system.”

Borgstrom said the health system does a lot of promotion from within and it uses “really good development plans” to do so. The plans ask what each candidate brings to the job and whether Yale New Haven Health is consciously working to develop leaders. The health system pays a lot of attention to the age, gender and racial mix of its growing talent within the organization.

“The last thing you ever want to do to raise the number of Latinos or the number of women or the number of African Americans is just to put people in positions,” she said.

If they’re hiring from the outside, search firms must bring a set of candidates that’s diverse in gender, race and background.

Yale New Haven’s board uses an outside consulting firm to ensure its pay policies are intentionally designed to avoid any bias in decisionmaking, she said.

There have been promising signs of change over the years. For example, women enrolling in medical school outnumbered their male peers for the first time in 2017.

“Today it’s like breathing in and breathing out,” Zane said. “There are far more women going into medicine.”

Not only that, she said women are increasingly branching out from pediatrics and primary care and choosing to become surgeons or orthopedists.

The gender pay disparity, however, apparently starts early in medicine. The starting salaries for female physicians fresh out of training in New York were 84% that of their male peers, a January Health Affairs study found. The difference persisted even when accounting for lifestyle factors.

“If this is how they’re starting off their careers, what does that entail for their future in the business, as it were, and indeed, prospects for achieving that high level of CEO?” said Anthony LoSasso, an author of the study and economics professor at DePaul University in Chicago.

Not-for-profit organizations are traditionally less likely to hire outside advisers to ensure their compensation is equitable compared with publicly traded companies, which are beholden to shareholders and subject to more stringent transparency requirements, said Steve Sullivan, a managing director with Pearl Meyer specializing in healthcare compensation. That said, all of the 50 largest not-for-profit health systems likely work with outside advisers on executive pay, he said.

Publicly traded hospital chains like HCA Healthcare and Tenet Healthcare Corp. have to disclose their executive compensation in annual proxy statements, whereas not-for-profits’ executive compensation is disclosed in tax forms that typically lag by more than a year. Shareholders can try to challenge pay programs at publicly traded companies.

“Whereas even at the large not-for-profit health systems, there isn’t that level of scrutiny,” Sullivan said. “It’s more individual situations where if somebody feels like their pay is lower or discriminatory or something, they can raise the flag or hire an attorney.”

Zane sits on the board of several publicly traded companies and agreed that the openness required of them makes them much less likely to shortchange executives and more likely to use high-level consultants.

“I am impressed that large corporations are doing a better job,” she said. “Not a perfect job, but a better job than some of the large not-for-profit health systems at mainstreaming this as a core responsibility of the organization and measuring their executives on how well this is part of the way the culture evolves.”

Roberta Schwartz, CEO of Houston Methodist Hospital, said she thinks women tend to compromise their careers more than their male peers, whether that’s because of children or where they want to live.

Indeed, the January Health Affairs study found women were consistently more likely to rank control over work-life balance as “very important” than men, ranging from 9 to 12 percentage points. Women were also more likely to work in primary care and were less likely to report spending more than 50 hours per week in patient care compared with men.

“I often find that women have to find a match with a place that suits the culture,” Schwartz said.

Sullivan recommends systems take a comprehensive look at their pay data, especially across job titles and by age, gender, race and ethnicity. The analysis should take into account how long people have been in their positions, with the organization and how well they’re performing.

He has found there tends to be a bias against putting women in jobs that control profits and losses, and so they’re more commonly in human resources, legal or administrative officer roles. The problem with that is that CFOs and COOs have a more direct pipeline to the CEO seat, he said.

Diversity of all sorts should be instilled within the culture of an organization, not just at the human resources level, Zane said.

“As our country evolves, as the demographics change, as the number of competent individuals is very clear, this should not have to be an extraneous activity,” she said. “It really needs to be mainstreamed in the way the organization operates.”

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