Gender pay gap at healthcare associations mirrors the industry

THE GENDER PAY GAP in healthcare is mirrored by the associations that support it.

The latest example is seen in the American Medical Association’s recently released 2018 tax form. The trade group’s 25-person senior leadership team is almost evenly split between men and women. Of those, only three of the nine highest-paid executives listed on the tax form were women. They made an average of about $888,000 in total compensation last year.

The six highest-paid men at the AMA made an average of $1.3 million. That includes CEO Dr. James Madara, who received $2.5 million in total compensation last year, up from $2.2 million in 2017.

C-suite executives like Madara and the AMA’s former chief operating officer, Bernard Hengesbaugh, skew the numbers because they’re paid more than senior vice presidents, said AMA spokesman Robert Mills. “There is high competition for those positions,” he said. “The value of a senior executive at a C-suite level is reflected in what the market typically pays for these individuals.”

Associations often take on issues of equality very publicly. In fact, the AMA in 2018 received attention when its House of Delegates adopted multiple resolutions to advocate for policies to close the pay gap between male and female physicians.

The AMA isn’t unique in its pay gap at the top level. The highest-paid male executives in comparable positions at the American Hospital Association made $1.5 million in total compensation on average last year, compared with $753,000 for the highest-paid female executives, according to its tax form.

An AHA spokesperson said their salaries are reviewed annually by an independent consultant.

The pay gap becomes smaller when comparing people in similar positions. In fact, the AMA’s two female senior vice presidents last year averaged $967,000 in total compensation, surpassing the three men with that title, who averaged $950,000.

If nothing else, pay studies demonstrate the need to take a fresh look at how organizations decide who becomes CEO, said Tom McMullen, a senior client partner at Korn Ferry.

“I characterize this not as much of a pay issue, but a talent acquisition issue, a leadership-development issue, a succession-planning issue,” he said. “A lot of times males go into it because there hasn’t been an adequate pipeline of diverse talent.”

It might not be surprising that pay practices at healthcare associations reflect the industry they serve. All 25 executives on Modern Healthcare’s latest list of the top 25 highest-paid not-for-profit health system executives were men. The first woman didn’t show up until No. 33.

Healthcare saw the biggest gender pay gap of any industry at the C-suite level, including CEO, chief financial officer, human resources chief and general counsel, according to a 2018 analysis from the compensation benchmarking firm Equilar. Male healthcare CFOs, for example, made $1.55 for every $1 that female CFOs made in 2017, the report found. Male healthcare CEOs made $1.51 for every $1 female CEOs made that year; the same was true for HR chiefs.

It’s hard to find organizations in any industry that don’t have gender pay gaps, said Kellie McElhaney, founding director of the Center for Equity, Gender and Leadership at the University of California at Berkeley.

In evaluating compensation, she recommended that companies hire an outside firm to perform the analysis rather than do it internally.