By MATTHEW HOLT
As someone who has organized health technology conferences for many years, I am surrounded by individuals with ambitions of achieving financial success in the healthcare industry. With billions of dollars in venture capital funding poured into numerous startups over the past decade, success stories like Jeff Tangey of Doximity, Glen Tullman of Livongo, and Chaim Indig of Phressia have inspired many to pursue their own entrepreneurial endeavors. However, the harsh reality is that the majority of health tech startups do not succeed, and many end up failing along the way (Olive, Babylon, Pear, etc.).
This has led me to question whether this traditional approach to making money in healthcare is the right path to take. The lack of transparency surrounding the financial details of healthcare organizations, particularly when it comes to executive compensation, is concerning. Fortunately, non-profit hospital and health systems are legally obligated to disclose this information through Form 990 filings with the IRS. Despite this requirement, many hospitals are tardy in filing their forms and do so in a confusing manner.
ProPublica has compiled a comprehensive database of all Form 990 filings, shedding light on the financial practices of various health systems. For example, UPMC reported a total revenue of $28 billion, showcasing the significant earnings potential in this sector. However, the disparity in executive compensation within these organizations is alarming, with top executives making millions while other employees struggle to make ends meet.
Recent investigations have revealed instances of hospitals suppressing staff wages and engaging in aggressive billing practices towards patients. This unethical behavior highlights the need for greater accountability and transparency within the healthcare industry. While some individuals may achieve financial success by climbing the corporate ladder within hospital systems, the potential for exploitation and inequality is a cause for concern.
In comparison, successful health tech startups like Phreesia offer a different model for financial success. By focusing on innovation and market disruption, companies like Phreesia have the potential to generate significant returns for their founders and employees. While the risks associated with startup ventures are high, the rewards can be substantial for those willing to take a chance.
Ultimately, the choice between pursuing a career in hospital administration or entrepreneurship in health tech comes down to individual preferences and risk tolerance. Both paths offer unique opportunities for financial success, but it’s essential to consider the ethical implications and long-term sustainability of each option. As we navigate the complexities of the healthcare industry, it’s crucial to prioritize transparency, fairness, and accountability in all financial dealings.
