10 Recent Healthcare Compensation Controversies

Here is a list of 10 recent compensation controversies regarding hospital, health system and insurance company executives and physicians.

1. Public Hospital Salaries Reviewed by California Attorney General.
California Atty. Gen. Jerry Brown announced plans in mid-September to review local government salaries of more than $300,000 and seek legislative reform that would cap public salaries and eliminate pension loopholes. Mr. Brown cited as an example the $800,000 in annual compensation paid to the chief administrator of at local hospital, whom L.A. Times sources identified as Fremont-based Washington Hospital CEO Nancy Farber. Ms. Farber faced months of public criticism over her salary of $847,000.

2. UCLA Hospital Criticized for Executive Raises Alongside Cutbacks.
University of California Los Angeles regents faced criticism in September for boosting the annual compensation of UCLA top executive David Feinberg, MD, by $410,000, while the university simultaneously raised employee contributions to its badly underfunded retirement plans. Dr. Feinberg's total compensation jumped to $1.3 million with the raise, $250,000 of which came from private donations. The university hospital defended Dr. Feinberg, saying his compensation must be kept high if he is expected to stay.

3. Maryland Hospital Association President Responds to CEO Salary Attacks.
Camera Coyle, president and CEO of the Maryland Hospital Association, responded in September to criticisms of the high salaries of Baltimore non-profit hospital CEOs, who received seven-figure salaries, country club memberships and tax and financial planning services as part of their total compensation. Eight top executives made more than $1 million, and the biggest annual CEO compensation package totaled $7.8 million.

Ms. Coyle argued Baltimore hospital leaders provide more than 88,000 Maryland jobs, make healthcare available 24 hours a day, bring patients the latest technology and manage the uncertainties of healthcare reform. She added the boards that decide salary base their decisions on nationally recommend practices for setting contract terms.

4. CEOs of Health Insurance Giants Made Over $10 Million Each in 2009.

CEOs of health insurance giants Cigna, Humana, Aetna, Coventry and WellPoint made between $10 and $18 million each last year. Those CEOs trail behind UnitedHealth Group CEO Stephen Hemsley, who took home $106 million last year — $7.5 million in salary and $98.5 million in stock options. The CEOs of America's 10 largest health insurance companies made $228.1 million in salary and stock options during 2009, according to the liberal advocacy group Health Care America For Now.

5. Critics Question Compensation of CEO of North Carolina's Iredell Memorial Hospital.
An August letter from Statesville law clerk Brian Chapman to Iredell Memorial Hospital board called the compensation of hospital CEO Ed Rush "excessive." Mr. Rush's salary has been frozen since Oct. 2008 at $445,000 plus benefits. The hospital also contributes $530,000 each year to a life insurance policy that Mr. Rush will receive when he retires. Mr. Chapman wrote that he thinks hospital employees' jobs and benefits could have been saved and patient care improved using some of Mr. Rush's compensation.

6. City-hired Plastic Surgeon Earned $330K While on Administrative Leave.
A plastic surgeon hired by Washington D.C.'s juvenile justice agency earned $330,000 during two years of administrative leave, after officials determined he did not have the credentials to provide medical services to the agency's jailed youth, according to a Washington Examiner report. The physician's compensation was criticized by Doctors Council labor representative Vanessa Dixon, who called the payment for no work "ridiculous."

7. Criticism for High New York Hospital CEO Compensation in Economic Slump.
Critics questioned whether hospital executives in upstate N.Y. deserve such large salaries, following a Times Union review that found many of the area's non-profit hospital CEOs were paid in excess of the $490,000 national average. The Times Union reported that Steven Boyle, CEO of St. Peter's Hospital in Albany, received compensation worth $988,422 in 2008. Last year, Albany Medical Center CEO James Barba was paid $4.4 million in overall compensation.

Critics such as Senator Charles Grassley (R-Iowa) and Judy Wessler, executive director of statewide advocacy group Commission on the Public's Health System, say the salaries are inflated and inappropriate for non-profit executives. Defenders of the compensation say non-profit hospital executives, who are responsible for complex organizations dependent on an intricate funding mix, deserve their high pay.

8. Former CEO Accuses California's Tulare County of Overpaying Physicians.
Bob Montion, former CEO of Tulare (Calif.) Regional Medical Center, accused Tulare County in late October of overpaying a physician group that operates the county's pediatric clinic. Mr. Montion said he plans to file a federal lawsuit against the county. According to Mr. Montion, the contract pays physicians at Hillman Pediatric Health Center $96 per patient visit, compared to $40 at the nearby Tulare Community Health Clinic. The physicians in the group are Prem Kamboj, MD, Susan Haack, MD, Asir V. Shah, MD, and Robert L. Orth, MD.

9. West Park Hospital Board Members Criticized for Pricy Training Courses.
A long-standing practice of West Park Hospital board members attending high-priced conferences stirred debate in the Cody, Wyo., community amid a seven-way race for hospital trustee seats. The board's four incumbent members said the training is important for educating board members with no healthcare management experience and that governing a hospital requires expansive knowledge, according to the report. The three challengers to the incumbents said they would not take expensive education and training trips to luxury hotels if elected. The incumbents attend an annual training provided by Colorado-based Estes Park Institute, a session that costs $1,695 per person for registration and $475 a night for lodging.

10. Hospital Executive Salaries Reviewed by New Hampshire Attorney General.
The New Hampshire Attorney General began reviewing the salaries of executives at New Hampshire non-profit hospitals in June 2010. Attorney General Michael Delaney announced plans to review the earnings in May, singling out Catholic Medical Center President and CEO Alyson Pitman Giles' salary of $1.36 million as compensation that "significantly exceeds that of her peers," according to the report. The Attorney General could issue a cease-and-desist order, or even approach Probate Court and ask a judge to determine a proper compensation level. A representative from the Attorney General's office said CEOs would not directly be asked to take pay cuts, but hospital board could be contacted and told their compensation levels are too high.


Read more about compensation:

-12 Statistics About Cardiologist Compensation by Compensation Method

-Debate Arises Over Physician Committee That Recommends Medicare Payments

-4 Trends Affecting For-Profit Hospital Executive Compensation

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