Home > Health care, Truthiness > Hospital CEOs ride gravy train while states cut Medicaid

Hospital CEOs ride gravy train while states cut Medicaid

It turns out New York isn’t the only state where proposed Medicaid cuts are triggering closer examination of $1 million-plus salaries for “non-profit” hospital executives.

Here’s an update, courtesy of Health Beat:

  • 15 Washington state hospital CEOs made more than $1 million in 2009
  • eight Baltimore area CEOs made more than $1 million
  • seven-figure salaries were common in Florida, Texas and North Carolina.

Says blogger Ray Poses, these compensation packages are “a product of the current management culture that has been infused into nearly every health care organization in the US. That culture holds that managers are different from you and me. …Because of their innate and self-evident brilliance, they are entitled to become rich. This entitlement exists even when the economy, or the financial performance of the specific organization prevents other people from making any economic progress.”

In some instances, hospitals are paying senior management more than they provide in “charity care” to people who have no insurance. These pay packages are all approved by hospital boards made up of wealthy benefactors and other community leaders. Are they troubled by what’s going on? It doesn’t look like it.

Eager to repair the appearance of excess, the Alliance for Advancing Non-Profit Health Care urges boards to cut or eliminate perks like country club memberships, company cars, lucrative retirement benefits and golden parachutes that might look bad on page 1 of the local newspaper.

The Alliance report recommends that to avoid “avoid publicity” from regulators and stakeholders, “boards would be wise to take this opportunity to reform executive pay by (1) avoiding the types of practices that attract and deserve the most criticism and (2) rewarding executives for outcomes that represent prevailing public views of what nonprofit health care organizations’ goals should be.”

Bill Sez: In upstate NY, media have paid a lot more attention to seven-figure salaries for non-profit health insurance execs, largely ignoring compensation for hospital execs. Perhaps it’s time for them to broaden the focus.

Categories: Health care, Truthiness
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