Hospital Exec Pay

The AJC thinks is it important to know how much Atlanta hospital CEO"s are paid. My response is, who cares? If you believe paying execs less will solve problems in the health care system you must be on crack.

The reporter hopes to get you on his side by telling how hospitals are laying off workers and Georgia citizens are filing bankruptcy because they can't pay their medical bills. He wants you to believe jobs would be saved and people would be able to pay their hospital bill if the CEO's weren't so greedy.

I mean really.

Let's use the recently departed (for another job, not left this earth) Michael Young, CEO of Grady, as an example. The AJC reports his pay was $834,000 for the 623 bed hospital which translates into $900 per bed as his comp.

The author would have you believe this is excessive.

For some odd reason the reporter fails to consider the $22 MILLION in uncompensated care rendered by Grady.

If Young worked for free Grady would still have over $21,000,000 in uncompensated care and that number would probably go higher considering the excellent job Young did of turning Grady around from near bankruptcy to a profitable status.

And what about that $900 per bed figure? Spread over 365 days that is less than $3 per bed per day.

Give me a break!

Twelve of the 15 acute care hospital systems in metro Atlanta are exempt from taxes on more than $2.6 billion worth of property and equipment. They also escape millions in sales taxes and income taxes.

No one has calculated lost revenue from exempting some hospitals from paying taxes. The number is thought to be substantial, however. For example, Tenet Healthcare Corp., a for-profit system of five hospitals in Georgia, paid $10.1 million last year in local, state and federal taxes.

So for-profit is better than not-for-profit?

Common public belief is just the opposite. The lame stream media would have you believe the cost of health care and health insurance would drop precipitously if health care providers would escape the profit directive.

Many tax exempt hospitals also receive millions in government grants.

And where does the government get their money?

From taxpayers.

Taxpayers such as Tenet Healthcare. So it is a cycle. For profit hospitals pay taxes that are cycled back to not-for-profit hospitals . . . less the "vigor" collected by the government for reallocating the wealth.

In exchange, these hospitals are supposed to pursue a social mission — defined loosely as providing uncompensated care, medical training, research and community outreach.

But when their CEOs have salaries rivaling corporate executives, the charitable work is obscured by an apparent pursuit of profit,

But wait.

Most of the Atlanta hospital CEO's skewered in this report work for not-for-profit hospitals. So are the pursuing profits or not?

Does the reporter even know what a profit is? Does the reporter understand that not-for-profit does not mean they cannot pay a competitive wage?

I don't think this guy has a clue.

In fiscal 2009, John Fox of Emory Healthcare made $1,671,999 to manage Emory University Hospital and five associated institutions.

Tim Stack of Piedmont Healthcare, who manages Piedmont Hospital and three others, made $1,340,974 the same year. Piedmont announced last month it will cut 464 jobs, although the hospital system made $46 million above operating expenses in fiscal 2010 and $12.5 million in the first nine months of this fiscal year.

So what?

Emory generates $1 billion in revenues and has 8400 employees. At $1.6 million Mr. Fox's pay is less than 2 tenths of a percent of gross revenues and works out to $190 per employee under his management.

If Mr. Fox worked for $0 each employee could get a $190 annual raise.

The concept of criticizing CEO pay is totally illogical. And if you didn't have someone of that caliber overseeing the daily operations how soon before it failed? What is fair pay for a billion dollar organization with 8400 employees?

If you want to solve the health care problems it is not to be found in the pay scale of the CEO, nor in a discussion of for-profit vs. not-for-profit.

Roughly 80% of health care dollars are spent on chronic conditions and 70% of those conditions can be prevented or reversed with lifestyle changes. We are an obese nation that rarely exercises other than getting up from our chair to find new batteries for the remote.

The other problem is the way health insurance is designed. Health insurance pays over 85% of the cost of health care. Too many people believe they cannot afford to visit the doctor unless they have a copay, even though most copay's are roughly 70% of the cost of the actual visit.

We don't need health insurance for the little things, we need it for the big medical expenses.

We don't buy car insurance with copay's for tires, brakes and oil changes. Why do we think we need health insurance with a doctor copay when the average person see's a doctor less than 3 times per year?

Instead of focusing on CEO pay, someone needs to take a hard look at personal responsibility and leave the folks who keep the hospital doors open alone.

I dare say most who are critical of the pay afforded to CEO's would not be able to run a successful 1 person business much less one with hundreds of employees.

Those who can, do. Those who can't are simply jealous.

 

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