Tag Archives: executive compensation

Comprehensive series on N.C. hospitals includes national context, effects of reform

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The (Raleigh, N.C.) News & Observer and The Charlotte (N.C.) Observer just combined forces to do a terrific five-part series on hospitals called “Prognosis: Profits.”

It’s not just a great expose/explainer/data analysis/narrative that tells readers about the state of the hospital industry in North Carolina and its national context. With lots of examples, data and sidebars that break down some complex policy ideas, it’s also a great primer for anyone who wants an easy to understand but multifaceted Hospitals 101 (without being Hospitals for Dummies). For you multimedia fans out there, it also has a video component.

In a nutshell, the series – a collaboration of investigative and health care writers – found that some of the hospitals make a ton of money and charge more than hospitals elsewhere and that the charity care many of them provide is worth less than the tax-breaks they get ostensibly for providing care to the community. And yes, it gets into many of the complexities of charity care versus community benefit versus cost-shifting versus bad debt. (We’ve written about some of that on this blog.)

They write:

During the Great Recession, their profits have stayed strong, and they’ve raised their prices. Top executives enjoy million-dollar compensation packages as they expand, buy expensive technology and build lavish facilities. Their customers buy the services before they know the cost, and they often don’t understand the bills.

And the hospitals enjoy a perk worth millions each year: They pay no income, property or sales taxes.

The series describes what it’s like to be poor and sick and have a collection agency come after what little you have to pay a big bill for a medical emergency. It describes the million-dollar plus compensation packages of hospital execs. (One got $8.7 million, including a big retirement trust payment.)

The articles blend individual patient stories with policy context and a lot of hospital financial data (which readers can search in an online database that includes total and operating margins for every hospital in the state). The fifth and final installment (as well as some of the fourth) looks at some of the solutions that have been put forth, by state legislators and patient and consumer advocates.
Health Reform core topic

The series avoids one of the pitfalls that drives me crazy in some otherwise good hard-hitting reporting. It describes a problem – deeply and accessibly. But it also goes beyond looking at a snapshot of where things stand today. It connects today’s reality, today’s system, to the many underreported provisions of the Affordable Care Act that may create new tools and forces and legal and financial and cultural shifts that can bring about change – depending on the Supreme Court, the politicians, and on how much the health sector (and patients) embraces versus resists change. (That’s a sidebar in part 3.) Among the relevant elements of the health law it identifies (and the sidebar gives more specifics than I’m including here):

  • Hospitals must develop financial assistance policies and the criteria for receiving the help.
  • An end to the widespread practice of charging the uninsured who qualify for financial assistance more than they charge the insured
  • A ban on nonprofits engaging in “extraordinary collection actions”
  • A requirement that they assess community health needs every three years, and devise a plan to meet them

The series has gotten the attention of federal and state legislators. We’ll see if they stay engaged. And how that matters.

Joanne Kenen (@JoanneKenen) is AHCJ’s health reform topic leader. If you have questions or suggestions for future resources, please send them to joanne@healthjournalism.org.

Contributing editor to Politico Magazine and former health care editor-at-large, Politico, Commonwealth Fund journalist in residence and assistant lecturer at Johns Hopkins Bloomberg School of Public Health.

Wash. hospital executive salaries may threaten nonprofit status

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KUOW’s John Ryan, who has been using public records to investigate pay for nonprofit hospital executives, dove deeper into the series when he discovered a law on the state’s books that appears to limit the pay of nonprofit execs to something near that paid to equivalent employees in the public sector. On the face of it, it appears many execs aren’t satisfying this requirement, which may place their hospitals’ tax breaks in jeopardy.

KUOW has learned that 15 hospital executives in Washington made $1 million or more in 2009. That elite group includes 14 nonprofit executives and one head of a government hospital.

For their part, hospital spokespeople pointed out that there may be no equivalent in Washington’s public sector to the work they do, and that some state hospital executives do pretty well for themselves anyway. Those claims haven’t stopped legislators from taking action based on Ryan’s work.

After learning of KUOW’s findings, state senators Cheryl Pflug and Karen Keiser co-sponsored a bill that would require nonprofit hospitals to publish their top executives’ incomes each year. They’d also have to provide proof to tax collectors that the paychecks aren’t out of line with comparable pay in the public sector.

If you’re looking to re-create Ryan’s work in your neck of the woods, he’s written a nifty little “How I did it” that should get you started, although he tells Covering Health that Washington’s law requiring nonprofit executive pay to be comparable to public-sector pay might be unique. But for looking into all kinds of executive compensation stories, AHCJ members should refer to tip sheets such as:

Andrew Van Dam of The Wall Street Journal previously worked at the AHCJ offices while earning his master’s degree at the Missouri School of Journalism.