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:
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.”
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.
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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.
On the Beat: Covering Hospitals: An innovative simulation 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 reporting on hospital quality
Investigating hospitals: Find stories with ready-to-use Hospital Compare data: AHCJ has made it easier for journalists to compare hospitals in their regions by generating spreadsheet files from the HHS database, allowing members to compare more than a few hospitals at a time, using spreadsheet or database software. AHCJ provides key documentation and explanatory material to help you understand the data possibilities and limits.
“For now, there’s no minimum percentage requirement for charity care and community benefit,” Grassley said in a statement on Baucus’ proposal. But Grassley is not ruling out a required level in the future, saying it needs “more study.”
“I agree with groups that take their charitable mission seriously … that a percentage payout requirement would become a ceiling, not a floor, like the private foundation payout of generally five percent,” Grassley said in a memo Thursday. “Instead, we need a formula that would maximize expenditures for charitable purposes.”
The investigators found that while federal law requires charity care in exchange for tax-exempt status, a 37-year-old IRS rule implementing the law is so vague that nonprofit hospitals have been able to exploit it by offering some free services but often little aid to the poorest people in their communities.
Nonprofits frequently charged higher prices to poorer people with no health insurance than they did to better-off patients who had coverage, researchers found. At the same time, many of the hospitals’ top executives enjoyed generous perks such as paid country club memberships and stays at expensive hotels.