Tag Archives: nonprofit hospitals

Reporter digs into nonprofit hospital CEO pay

At The Atlanta Journal-Constitution‘s M.B. Pell has assembled a look at CEO pay at local nonprofit hospitals. Pell hits hard at the top of the story, pointing out that top executives are pulling in ever-growing six- and seven-digit salaries in a time of cutbacks and job losses, and demonstrating that the state loses millions in tax revenue thanks to the hospitals’ exempt status.

It’s the sort of meaty accountability work that we expect to see on a tax filing-based story. Slightly more surprising? Pell endeavored to complete the picture with a healthy dose of perspective, reminding readers that in urban areas like Atlanta, even nonprofit hospitals are often complicated billion-dollar conglomerates. In Georgia, Pell writes, “hospitals report to 27 state and federal agencies and engage in multimillion-dollar building projects. The larger hospital systems have billions in revenue and are among the largest employers in their communities. Many also operate for-profit subsidiaries.” Those “billions” provide valuable context when discussing a $600,000 pay package.

Hospital executives and industry experts consider the examination of salaries a titillating issue for the public, but a subject lacking in substance.

Even if salaries were cut dramatically, the savings would not add significantly to hospitals’ charitable missions, Parker said.

Tax exempt hospitals in the metro area provided $932 million in charitable care in 2009, according to an analysis of financial survey data reported to the state by hospitals. The hospitals spent $61 million to pay officers, directors, trustees and key employees, tax forms show.

Of the uncompensated care, nearly a third, or $287.5 million, was provided by one hospital, Grady Memorial. Grady CEO Michael Young, who left the hospital in June, made $833,646 in 2009.

But for-profit hospitals in the Atlanta area pay taxes and they provided uncompensated care totaling $87 million in 2009, according to financial survey data.

For a counterpoint, Pell turned to a few outspoken patient advocates and a 2009 study conducted by University of Connecticut researchers. It’s another data point that demonstrates the depth of Pell’s research.

CEOs of nonprofit hospitals in Connecticut who increased the number of beds at their facilities by 10 percent typically got pay increases of just under 8 percent, shows a study of nonprofit hospitals by two professors at the University of Connecticut.

A 10 percent increase in the amount of charity care provided, however, typically resulted in a 1.5 percent decrease in the CEO’s pay, the study shows.

Pell’s story takes the national picture into account, but if you’re just looking to get up to speed on the national debate over nonprofit hospitals, charity care and tax exemption as it relates to executive pay, I recommend you scroll down to the final subhead: “Eyeing tax exemption.”

Wash. hospital executive salaries may threaten nonprofit status

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:

Nonprofit hospitals pay country club dues for execs

In what would seem a logical follow up to last year’s piece on hospital salaries, KUOW’s John Ryan has used public records to look at the top salaries at Seattle-area nonprofits this year.

This time, he focuses on the job perks given to nonprofit executives as much as he does their paychecks. Among them, Ryan writes, “Eight hospital systems in our region reported paying membership dues for their executives at clubs like the Columbia Tower Club and the Kitsap Golf and Country Club.”

A PDF of the salaries is also available. For more on how Ryan puts it all together, see the how-to he posted with last year’s edition.

Tax documents show CEO pay exceeds charity care at some Calif. nonprofit hospitals

Ron Shinkman, editor of the trade newsletter Payers & Providers, spent four months reviewing tax documents filed by 120 nonprofit California hospitals in 2007 and 2008. He found that base CEO compensation was somewhere around $517,123 in that period, which is more than double national numbers from a survey published in 2001.

To add perspective to the numbers, California Watch’s Christina Jewett looked at Shinkman’s research – especially the sentence that mentioned “11 hospital executives whose compensation exceeded the cost of the charity care provided by their hospitals during the reporting year” – and evaluated it in terms of the national debate over the amount of charity care provided by nonprofit hospitals.

Shinkman is charging for full copies of his work and the resulting white paper, but between Jewett’s coverage and the brief version Shinkman has posted, readers should be able to get a pretty good idea of where the story is going and, perhaps more importantly, how to report on CEO pay at your local nonprofit hospitals.

For more help covering nonprofit hospitals:

Free online training:
Course teaches how to report on hospital finance

Covering Hospitals online training

This free innovative simulation, “On the Beat: Covering Hospitals,” guides you through the sources and resources you need to tackle the beat.

You’ll tap into the same tools that you’ll use on the job, and you’ll have a virtual mentor to walk you through the maze of reports, statistics and sources. One story line teaches you about how to report on hospital finances.

Start today to hone your critical-thinking skills and gain the beat-specific knowledge needed to cover the hospitals in your community.

This online training module combines the reporting expertise of AHCJ with NewsU’s innovative e-learning experience and is made possible through a grant from the John S. and James L. Knight Foundation.

New IRS rules reveal hospital conflict disclosures

The new IRS disclosure rules for nonprofit hospitals seemed to promise some interesting revelations, and now that they’re public, the Pittsburgh Tribune-Review‘s Walter Roche has taken full advantage of the new disclosures. Roche checked out fiscal 2009 filings from the nonprofit hospitals in his area and found a big handful of conflicts ($10 million at one firm alone), all of which the nonprofits say are entirely above board.

Jennifer Chandler of the National Association of Nonprofits said it is not unusual or improper for nonprofits to have business dealings with board members as long as IRS disclosure requirements are followed.

“It has to be managed correctly,” she said.

The meat of Roche’s story is made up of a laundry list of disclosed conflicts, which include commercial dealings with board members and relatives.