At the Millennium, How Happy are CIOs? - Industry Trend or Event

Health Management Technology, Dec, 1999 by Betsy Hersher

Conversations with 212 CIOs reveal what motivates them, what their challenges are, and what incentives are in their future.

What motivates successful chief information officers? What keeps them happy? Will there be a massive turnover of CIOs in the new millenium? How worried are today's CIOs about the Health Insurance Portability and Accountability Act (HIPAA), the Balanced Budget Act (BBA), continued merger activity, downsizing, and outsourcing? These and other issues before them have become more and more complex and are tied directly to the business of healthcare enterprise--and the CIO's job satisfaction.

Hersher Associates, Ltd. conducted a telephone survey of information systems senior executives in conjunction with HEALTH MANAGEMENT TECHNOLOGY. The survey was geared to capture the mood of today's CIOs, their motivators for satisfaction, future goals, concerns, and challenges in the new millennium, as well as salary and benefits information.

Of the 212 CIOs interviewed, 56.6 percent described their organizations as IDNs with multiple entities and acute care hospitals. The IDNs were segmented into small (under 500 beds), medium (500-1000 beds), and large (more than 1000 beds). There were 60 single hospital CIOs or 28.3 percent of those surveyed, segmented into small (under 250 beds), medium (251-500 beds), and large (more than 500 beds).

Twenty-two or 10.4 percent of CIOs said that their organization was an academic medical center, and 10 CIOs, or 4.7 percent, were with other types of healthcare organizations without an acute care hospital component.

The health systems were further defined by total operating revenue. Of the 193 reporting, there are 68 systems with revenue under $200 million, 72 reporting $201 to $500 million, 24 reporting $501 to $1 billion, and 29 reporting more than $2 billion. The geographic distribution of the respondents was well balanced, with approximately the same representation in all regions.

The CIOs surveyed shared more than their ideas about salary levels or expectations. They talked about their satisfaction with their jobs and their future interests for themselves and their teams. This is what we learned from the survey.

Staffing and Responsibilities

Respondents had a wide variety of management responsibilities. We found that size of staff most often correlates to level of salary, but we want to stress, based on our historical data, that this is not always the case. Frequently, academic medical centers and children's hospitals pay well above the norm.

Based on our survey data (as displayed in Exhibit 1), CIOs with staffs of one to 15 had an average salary of $86,000. CIOs with 16 to 30 Full Time Equivalents (FTEs) had an average salary of $103,000. When a CIO has more than 50 staff, the salary appears to go up with CIOs supervising more than 250 employees making the highest average salaries--approaching $188,500.

[Exhibit 1 ILLUSTRATION OMITTED]

Today's CIO responsibilities have broadened. Forty-one CIOs, or 19.3 percent of those surveyed, manage only information systems. More than 47 percent (101) CIOs manage information systems and telecommunications.

A growing number of CIOs have information systems, telecommunications, and health information management under their guidance, with 28, or 13.2 percent, reporting these responsibilities. Interestingly enough, 42, or 19.8 percent, of the CIOs have many other areas of responsibility that include medical library, registration, patient access, call center, switchboard, biomed, pharmacy, and laboratory.

The Positions They Left Behind

The CIOs told us their statuses prior to their current positions and they varied greatly. More than 20 percent were promoted from within their current organizations. Almost 35 percent came from another healthcare organization where they had similar responsibilities, and more than 15 percent came from another healthcare organization where they had lesser responsibilities.

Seventeen percent said they were previously with a consulting firm, with an information systems vendor, or in information systems management for a non-healthcare organization. Other mentions included interim CIO positions, the military, and corporate positions.

When asked why they decided to leave their last position, more than 20 percent of the CIOs responded by saying that they were promoted to the CIO position. Twenty-seven percent were recruited, either by an institution or a recruiter, and 22 percent mentioned that they wanted more responsibility and financial incentives. Others mentioned family, personal issues, location, and excessive travel as additional reasons for changing positions.

More than 95 percent came from some type of healthcare experience. The non-healthcare CIOs, 4.7 percent--coming largely from manufacturing, education, and telecommunications--still appears to be in the distinct minority.

Compensation and Benefits

CIOs who were in their positions for more than 10 years earned less than any other group in the survey. This clearly indicates that changing positions occasionally can boost your earning potential. The highest average salaries were paid to CIOs who have been in their positions for between one and five years (Exhibit 2).