October 6, 2015
An article in The BMJ (September 29, 2015, online access) discusses findings from a cross-sectional study that sought to identify the prevalence, characteristics, and compensation of members of the boards of directors of healthcare companies who hold academic appointments as leaders, professors, or trustees. Researchers identified all publicly traded healthcare companies (n=442) listed on the NASDAQ Stock Market and the New York Stock Exchange - the two largest global stock exchanges - in January 2014. Focusing on U.S. companies, they examined the formal academic relationships of members of healthcare companies' boards of directors for 2013. "Leaders" were defined as those holding positions that involve oversight of the clinical activities of their institution, or educational and research activities. "Trustees" were defined as those who held trustee positions on hospital, medical school, or overseeing university boards of trustees. Total compensation figures included cash, stock awards, options awards, dividends, and charitable contribution matching. Findings show that nearly 1 in 10 U.S. for-profit healthcare company directorships are held by individuals with an academic affiliation, with compensation often approaching or surpassing common academic clinical salaries. Individual compensation ranged from $0 to $1.4 million (median = $193,000); moreover, academically-affiliated directors owned substantial company stock (median shares = 50,699). Leaders with board positions included 17 health system and hospital Chief Executive Officers; 15 university presidents, provosts and chancellors; 8 medical school deans; and 16 department chairs. Dual obligations to for-profit company shareholders and non-profit clinical and educational institutions pose considerable personal, financial, and institutional conflicts of interest beyond that of simple consulting relationships. The authors suggest that these conflicts may require additional review, regulation, and, in some cases, prohibition when conflicts cannot be reconciled.
Anderson T, Good C, and Gellad W. Prevalence and compensation of academic leaders, professors, and trustees on publicly traded US healthcare company boards of directors: Cross sectional study. BMJ 2015;351:h4826.
Dr. Gellad was supported through an HSR&D Career Development Award (CDA 09-207) and is part of HSR&D's Center for Health Equity Research & Promotion (CHERP).