How UMass Memorial cut executive payroll in half

UMass Memorial Health Care led the pack of healthcare organizations in central Massachusetts that cut executive payroll in recent years, according to a report from the Worcester Business Journal.

The Worcester-based health system reduced executive payroll by nearly $15 million, or 52.5 percent, over a period of five years, spanning from 2013-17, according to the report. The report notes that cuts didn't necessarily come from executive paychecks — UMass Memorial President and CEO Eric Dickson earned almost $2.3 million in 2017. Instead, the health system reduced executive payroll by attrition and eliminating redundant positions. 

"We wanted a slimmer organization at the top," Sergio Melgar, UMass Memorial CFO, told the Worcester Business Journal. "It was very hard to promote anyone to a [vice president] in the organization during this timeframe. If we lost a VP, they were generally not replaced."

UMass Memorial made the cuts in response to declining patient discharge counts and other financial pressures like lower Medicaid reimbursement and increasing employee salary and retirement costs. Other healthcare organizations in the region used a similar strategy over the same time period, though UMass Memorial made the largest reductions.

The health system does not have more cuts planned for 2020, according to the report.

Read more here.

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