CIOs: their challenges and satisfactions: an in-depth look at healthcare information technology executives—what they are making and what makes them tick - CIOs Survey - Statistical Data Included

Health Management Technology, Dec, 2001 by John Morris

HIPAA is no longer their No. 1 challenge, and when it comes to salary satisfaction, top guns in healthcare IT who don't hold CIO titles aren't entirely thrilled with their compensation. Is it enough to make them head for non-healthcare pastures? Not by a long shot. Some 70 percent of healthcare IT executives plan to stay at their current organizations or move to other healthcare organizations within the next five years. Less than 10 percent plan to leave healthcare, and less than 5 percent plan to join e-health organizations.

Health Management Technology's 2001 survey of healthcare information technology (IT) executives reveals intriguing patterns in salary, satisfaction, responsibilities and expectations of the future. Salaries and compensation, for instance, appear to be significantly impacted by geographic region, overall IT budget, and type of healthcare organization involved, while job satisfaction and expectations of the future show consistency across sub-segments.

Who's Who

In the past, HMT's survey has targeted executives who hold only the title of CIO or equivalent within healthcare provider organizations (HCOs). Yet, at many healthcare organizations of all types and sizes, the most senior IT executive holds the title of director of IT/IS, not CIO.

To fully capture the major tendencies among a diverse group of senior IT executives, we included in this year's survey both CIOs (or IS/IT vice presidents) and IS/IT directors who are their organizations' top IT executives.

A total of 178 IT management personnel at unique healthcare organizations responded to our Web-based survey in August and September. Of these, 128 were the most senior IT executives in their organizations, including 53 CIOs, VPs of IS or equivalent, and 75 directors of IS/IT or equivalent.

Respondents worked in integrated delivery networks (IDNs), academic medical centers, single hospitals, physician groups and managed care organizations. They worked in 25 of 50 states, representing all major geographical regions of the U.S.

Organization Type and Size

Is the type and size of a healthcare organization a good predictor of its having a CIO position? In general, the answer is yes, as Figures 1 and 2 illustrate. However, the relationship seems stronger for HCO type than for size.

Excluding children's hospitals (lightly represented among respondents), the organization type most likely to have a CIO is the managed care organization (73 percent). Interestingly, IDNs and academic medical centers are roughly equally likely to have CIOs or directors of IT as their top IT executives.

When it comes to the relationship of levels of operating revenue to specific job titles, Figure 2 shows relationships at the extremes. The clearest instance is at the lowest revenue level ($50 million or less), where only one quarter of HCOs have CIOs--and at the lofty $751 million to $1 billion range where the trend is reversed.

Compensation

Figures 3a and 3b show the average annual salary and percentage bonus in 2001 and the expected percentage raise in 2002 for CIOs and IT directors--and what a difference a title can make. In 2001, the average CIO salary was $115,500, some 52 percent higher than the average annual salary for IT directors who earned $76,000.

When average bonuses and anticipated raises are included in the analysis, the difference between CIO and IT director salaries grows. As a group, CIOs enjoyed much higher bonuses than their director-level colleagues (7.6 versus 2.3 percent), although IT directors' expectations for salary increases next year almost paralleled their CIO counterparts.

But in this case, a picture is not worth a thousand words. In fact, these averages identify only the most general compensation trends. Although CIOs clearly earn more than IT directors in the aggregate, salary averages reported in Figure 3a obscure a significant overlap in the ranges of compensation for the two groups.

CIOs' salaries ranged from $50,000 to $234,000, while IT directors' salaries ranged from a very low $27,500 up to $140,000. Yet 23 percent of IT directors reported base annual salaries of $100,000 or more. At the same time, 55 percent of CIOs reported base annual salaries over $100,000, with the remaining 45 percent of CIOs reporting salaries below $100,000. Thus, almost a quarter of IT directors reported base salaries above those of almost half the CIOs.

Similarly, bonus reporting showed uneven distribution within both groups. Approximately 47 percent of CIOs and 71 percent of IT directors received no bonuses in 2001. While the difference in bonus money may seem significant, it's important to remember that many healthcare IT executives received no bonuses at all.

Responsibilities and Salary

The regional salary data in Figure 4 is consistent with expectations of regional variations in salaries and cost of living, as well as with trends in other IT salary surveys. However, the variations across regions reported above, combined with the overlaps in salary ranges reported in the prior section, suggest that there are other, more influential determinants of compensation. Two of these are the organization's total IT budget and the number of full-time employees that the CIO or IT director supervises.