1. society
2. welfare
3. healthcare
4. hospital

Communications Workers of America District One
PAYING FOR WHAT
DOESN’T COUNT:
How exorbitant executive compensation and frivolous
advertising hurts New York hospital patients
ABOUT DISTRICT ONE OF THE COMMUNICATIONS WORKERS OF
AMERICA AND THIS REPORT
This report was researched and written by Margaret Stix and Glenn von Nostitz of Lookout
Hill Public Policy Associates and designed by Tracey Maurer for District One of the
Communications Workers of America.
District One of the Communications Workers of America represents nearly 150,000 workers
in 200 CWA local unions from New Jersey to New England. Our diverse membership
works in many different sectors of the economy: telecommunications; state, local, and county
government; health care; higher education; manufacturing; broadcast and cable television;
commercial printing and newspapers.
More than 11,000 District One members provide direct patient care and support to New
Yorkers and their families. All CWA members and their families have been or will be patients.
Recognizing that short staffing, lack of supplies, and safety issues are far too common in our
health care system, we are coming together to seek solutions that put our patients first.
CWA Healthcare workers: The Patient is Our Purpose, the Union is Our Voice!
Table of Contents
3
EXECUTIVE SUMMARY
5
TOWARD SAFER, HIGHER QUALITY HOSPITALS
5
NEW YORK’S NONPROFIT HOSPITALS HAVE SERIOUS QUALITY AND
PATIENT SAFETY PROBLEMS
7
BETTER MEDICAL OUTCOMES DEPENDS ON SAFE STAFFING LEVELS
11
WHERE THE MONEY IS FOR SAFE STAFFING
11
COMPENSATION, BY THE NUMBERS
13
WHY NONPROFIT HOSPITAL EXECUTIVES SHOULD BE PAID LESS
19
ADVERTISING AND LOBBYING EXPENDITURES
23
RECOMMENDATIONS
25
ENDNOTES
28
APPENDIXES
Executive Summary
THE URGENT NEED FOR SAFER NEW
YORK NONPROFIT HOSPITALS
The deaths of as many as 400,000 patients in US hospitals
each year are preventable, according to a widely reported
study in the Journal of Patient Safety in 2013. Patient
care understaffing is one of the biggest contributors to
preventable hospital deaths and other serious hospital
medical complications. More hospital-acquired infections,
medication errors, avoidable readmissions and other harms
result when nurses and aides care for two to three times too
many patients as they should. Studies in major journals such
as the Journal of the American Medical Association establish
that hospitals with higher nurse-to-patient ratios have
lower mortality rates than hospitals with lower nurse-topatient ratios.
New Yorkers can hardly miss advertisements trumpeting
a hospital’s top heart center or relating the heartwarming
story of a patient saved by exemplary care. But the
unfortunate reality is that New York’s nonprofit hospitals
perform significantly worse overall than hospitals nationally
on key indicators of quality and patient safety. So it is
especially urgent that they end understaffing. They could
make enormous progress in doing so by redirecting at least
$300 million a year now wasted on exorbitant executive
compensation and needless advertising to buttressing
staffing levels in direct care units.
WHERE THE MONEY IS FOR SAFE
STAFFING: EXORBITANT EXECUTIVE
COMPENSATION AND NEEDLESS
ADVERTISING
According to IRS Form 990 returns filed by 155 New
York nonprofit hospitals, 412 executives received
compensation of more than $350,000 in 2012, for a total
of $339 million. Compensation of 92 executives at 41
hospitals exceeded $1 million and 13 executives received
over $2 million. Compensation to many executives
included severance payments as high as $1 million and
contributions to highly-lucrative retirement plans. As
Crain’s New York Business reported, “New York’s nonprofit
hospitals have jumped on the for-profit corporate
bandwagon in embracing generous retirement plans,”
noting that in some cases the payouts from these plans
“rival their annual seven-figure base salaries.”
Such compensation is completely unjustified:
• E
normous pay packages do not correspond with
better hospital quality or greater patient safety.
Medicare adjusts how much hospitals are paid based
on performance on indicators like readmissions rates
and healthcare associated infections. CEOs of the
worst performing New York nonprofit hospitals are
still paid extraordinarily well—in some instances more
than $1 million. A major reason is that hospital boards
of trustees largely base executive pay on the amounts
received by overpaid executives of other hospitals. Far
too little weight is given to CEO records respecting
readmissions, medical complications, and other
indicators of hospital quality. A 2014 Journal of the
American Medical Association: Internal Medicine study
found no link between nonprofit hospital CEO pay
and key quality indicators.
• N
onprofit hospital executive compensation is
largely paid by taxpayers. New York nonprofit
hospitals generate at least half of their net patient
service revenue from Medicare and Medicaid
reimbursements, and are exempt from payment of
well over a billion dollars in taxes each year. With such
enormous government subsidies, nonprofit hospitals
essentially function as public institutions. Hospital
executives should be compensated accordingly. No
one should become a multimillionaire working for a
charity at public expense.
• Th
e New York City Health and Hospitals
Corporation demonstrates that reasonable
compensation can be coupled with good patient
care. On quality and patient safety indicators, HHC
hospitals perform at least as well as and, in some
cases, better than comparable nonprofit hospitals.
Yet in 2012, the HHC president received a salary
of $366,836 plus a car—a small fraction of CEO
compensation at New York’s nonprofit hospital
systems. He oversaw a nearly $7 billion operation with
11 acute-care hospitals, four diagnostic and treatment
3
centers, four skilled nursing facilities, 70 community
clinics and a managed care plan. The heads of HHC
acute-care hospitals were also paid a fraction of the
compensation of their nonprofit peers.
When top hospital executives receive as much as 75 times
the average annual salary of some of their direct care
staff—nursing assistants earn an average of $32,380 a year,
according to the New York State Labor Department—they
contribute to income inequality at taxpayer expense.
Hospitals should call an advertising truce.
If hospitals had spent $100 million less on advertising
in 2012, $20 million would still have been left to inform
the public about healthcare issues that matter and more
resources would have been available for patient care.
New York hospitals report spending more than $120 million
on advertising in 2012 that had little or no medical benefit
or value to patients. The pool of potential patients is fixed, so
new patients are merely siphoned off from other hospitals.
Few prospective patients are able to evaluate the claims
made in ads and typically don’t choose their hospitals, but
are directed to them by physicians with admitting privileges.
Finally, advertising begets more advertising and a “medical
arms race” among hospitals that seek to protect their market
shares by purchasing and promoting the same state-of-the
art equipment touted by competitors.
To ensure that hospitals improve their clinical quality
and patient safety, New York State should enact:
• Th
e Safe Staffing for Quality Care Act. This
legislation setting minimum licensed nurse-to-patient
ratios would be the single most important step toward
improving New York hospital patient safety.
• A
cap on hospital executive compensation. Executive
compensation should be capped at: (i) $450,000
at hospitals with revenues of at least $1 billion; (ii)
$400,000 at hospitals with revenues of $400 million
to $1 billion; and (iii) $350,000 at hospitals with
revenues of less than $400 million. These amounts
are in line with the compensation paid by the New
York City Health and Hospitals Corporation. If these
caps had been in effect in 2012, hospitals would have
saved at least $190 million that could have augmented
patient care staffing.
• L
egislation requiring full disclosure of executive
compensation determinations. Since nonprofit
hospitals exist through enormous public subsidies, the
factors that determine compensation and the weight
given each factor should be publicly disclosed. An
informed public could then press for compensation
to be based on what counts most: patient safety and
hospital quality.
4
Communications Workers of America District One
PAYING FOR WHAT DOESN’T COUNT • MAY 2015
Toward Safer, Higher
Quality Hospitals
Hospitals may advertise that they are the “best” or the
“top ranked” but the unfortunate reality is that the Empire
State ranks near the bottom on national indicators of
hospital quality and patient safety. Understaffing is
a significant contributor to New York’s overall poor
performance. Ending understaffing would go a long way
toward improving the state’s poor hospital safety and
quality record.
NEW YORK’S NONPROFIT HOSPITALS
HAVE SERIOUS QUALITY AND PATIENT
SAFETY PROBLEMS
The US Centers for Medicare and Medicaid Services
(CMS) and Agency for Healthcare Research and Quality
(AHRQ) have found that New York hospitals perform
worse on measures of hospital quality and patient safety
than hospitals nationally. Hospital patient safety evaluations
issued by the Leapfrog Group® and Consumer Reports have
come to similar conclusions. Indeed, New York hospitals
overall perform comparatively poorly on all generally
accepted hospital rankings and scorecards.
Poor performance on Medicare hospital quality
incentive programs
In 1999, To Err is Human: Building a Safer Health
System, the landmark report by the Institute of Medicine,
documented a veritable epidemic of preventable deaths
in US hospitals and jump-started today’s hospital patient
safety movement.1 But 11 years later, a study in the New
England Journal of Medicine reported that no progress had
been made in reducing avoidable harmful adverse events.2
As the New York Times reported, “instead of improvements,
the researchers found a high rate of problems. About 18
percent of patients were harmed by medical care, some
more than once, and 63.1 percent of the injuries were
judged to be preventable.” 3 Researchers found that 2.4
percent of the problems were serious enough to have caused
or contributed to a patient’s death.
A major study found that
18%
63%
2.4%
of patients
were harmed by
medical care
of the injuries
were preventable
were serious
enough to
have caused or
contributed to
the patient death
To prod hospitals to improve, the federal Affordable
Care Act of 2010 authorized three programs that adjust
Medicare payment reimbursements based on hospital
performance: the Value Based Purchasing (VBP) Program,
Readmissions Reduction Program (RRP) and Hospital
Acquired Condition (HAC) Program (collectively, the
Medicare hospital quality incentive programs). Each
program evaluates hospitals on a series of quality and safety
measures that are broad-based, risk-adjusted and rigorously
reviewed prior to their implementation. Consequently,
performance on the Medicare hospital quality incentive
programs is considered to be the most reliable indicator of
hospital quality and safety.
In late 2014, CMS issued hospital Medicare reimbursement
adjustments for the current fiscal year (FY 2015). As
shown in Figure 1 and discussed below, New York hospitals
performed worse overall than hospitals nationally in all three
programs and are consequently receiving higher penalties.
Payment adjustments under these programs can have a
substantial impact on a hospital’s bottom line. For instance,
its HAC penalty this year will reduce Kaleida Health’s
Medicare reimbursements by about $1.7 million.4
5
Figure 1: US & NY FY 2015 HOSPITAL REIMBURSEMENT ADJUSTMENTS
Centers For Medicare & Medicaid Services – FY 2015
80
73
70
60
50
63
58
48
45
44
40
50
35
30
30
33
26
20
14
10
0
% w/VBP Bonus
Avg. VBP Bonus
% w/VBP Penalty
US
• V
alue Based Purchasing Program (VBP). Medicare
reimbursements are initially reduced by 1.5 percent
and then are adjusted upward based on quality of
care metrics, including the hospital’s performance
on medical procedures, mortality rates and patient
satisfaction, as measured by survey responses. A bonus
is paid for better than average performance.
On average, New York hospitals performed worse than
US hospitals on the VBP. For FY 2015, New York is
among the bottom ten states in the share of hospitals
receiving a bonus and among the top ten states in
the share receiving a penalty. According to a Kaiser
Health News analysis, the average bonus nationally is
0.44 percent and the average penalty is 0.30 percent.5
According to an analysis of CMS data, the average
bonus for New York hospitals is only 0.30 percent and
the average penalty is 0.33 percent.
• R
eadmissions Reduction Program (RRP). A
readmission may result from a healthcare-associated
infection or other adverse medical event that becomes
apparent soon after discharge. Up to three-quarters of
readmissions are believed to be preventable.6 A penalty
of up to three percent of Medicare inpatient payment
claims can be imposed based on 30-day readmission
rates of patients initially admitted for five conditions:
acute myocardial infarction, heart failure, pneumonia,
6
Communications Workers of America District One
Avg. VBP Penalty
Avg. RRP Penalty
Rate
% w/HAC Penalty
NY
acute exacerbation of chronic obstructive pulmonary
disease, and elective total hip or knee arthroplasty.
The penalty is adjusted to account for risk factors such
as patient age, illness severity and additional medical
complications.
Eighty percent of New York hospitals are being
penalized for high readmissions rates during FY 2015.
The share of hospitals being penalized in New York
is higher than all but five other states. New York’s
average penalty of 0.73 percent is higher than all but
11 states and the District of Columbia.7
• H
ospital Acquired Condition (HAC) Reduction
Program. Penalties are imposed based on rates
of central-line associated bloodstream infections,
catheter-associated urinary tract infections, and
serious complications. The latter is based on eight
types of injuries, including blood clots, bed sores,
surgical cuts, broken hips and collapsed lungs. Starting
in October 2014, hospitals in the lowest quartile of
HAC performance were penalized up to one percent
of total Medicare payments for their frequency of
adverse events.
HAC penalties were imposed on 26 percent (41) of
New York hospitals for FY 2015, while HAC penalties
were imposed on only 14 percent of US hospitals.
PAYING FOR WHAT DOESN’T COUNT • MAY 2015
Poor performance on other measures of hospital
performance and patient safety
In addition to their poor performance in Medicare hospital
quality incentive programs, New York hospitals also
perform worse overall than hospitals nationally on respected
indicators of hospital patient safety and quality issued by the
Leapfrog Group®, US Agency for Healthcare Research and
Quality, Truven Health Analytics, and Consumers Union.8
The Leapfrog Group® is a consortium of major employers
that purchase health insurance and promote better US
healthcare. As shown in Figure 2 and Figure 3, only
42 percent of New York hospitals scored an A or B on
Leapfrog Group’s annual Hospital Patient Safety Grades
for 2014,9 compared to 59 percent of US hospitals. Nearly
14 percent of New York hospitals scored a D or an F, more
than twice the six percent of hospitals nationally.
Figure 2: LEAPFROG GROUP NY HOSPITAL
PATIENT SAFETY GRADES – 2014
14%
1%
22%
Truven Health Analytics, a multinational health care
research company formerly operated by Thomson
Reuters, rates the nation’s hospitals annually on factors
including mortality rates, patient complication rates,
adverse patient safety events, 30-day readmission rates
and patient satisfaction. In its 2015 and 2014 reports,
Truven ranked New York hospitals in the lowest quintile.10
Truven included no New York hospital among its 100 top
hospitals and no New York hospital system among its top
15 hospital systems.
The federal Agency for Healthcare Research and Quality
(AHRQ) also compares hospital quality among states. Its
2013 National Healthcare Quality Report gave New York
hospitals the seventh lowest quality score in the nation and
categorized their quality as “weak.” 11 Important AHRQ
measures in which New York hospitals rated “worse than
average” included:
• P
ostoperative sepsis per 1,000 elective surgery
admissions;
• D
eaths per 1,000 adult hospital admissions with
congestive heart failure;
• D
eaths per 1,000 adult hospital admissions with
pneumonia; and
• D
eaths per 1,000 hospital admissions with expected
low mortality.
A
B
20%
C
D
43%
E
Figure 3: LEAPFROG GROUP US HOSPITAL
PATIENT SAFETY GRADES – 2014
6% 0%
32%
35%
A
BETTER MEDICAL OUTCOMES DEPENDS
ON SAFE STAFFING LEVELS
Many New York hospitals assign too few direct care staff
to ensure that patients get good care. Nurses at New York
Methodist Hospital, for instance, filed 3,000 unsafe staffing
protests in 2013 and 2014 and reported that nurse-topatient ratios in medical-surgical units were as high as oneto-12 when ratios of one-to-four are recommended.12
Understaffing hurts patients
B
C
D
E
Finally, only 30 percent of New York hospitals, accounting
for less than one-fifth of hospital inpatient discharges,
scored above the national average in Consumer Report’s 2014
Hospital Safety Scores while three of the 13 bottom-scoring
hospitals in the nation were found to be in New York.
27%
The danger to patients from understaffing has been amply
documented. A groundbreaking study of 232,342 surgical
patients in the Journal of the American Medical Association
( JAMA) found that patients in hospitals with a 1:8 nurse-
7
to-patient ratio have a 31 percent greater risk of death
than patients in hospitals with a 1:4 nurse-to-patient ratio.
Each additional patient per nurse was associated with a
seven percent increase in the likelihood of dying within
30 days of admission and a seven percent increase in the
odds of failure-to-rescue.13 There is also a high correlation
between understaffing of RNs and the incidence of
hospital acquired pneumonia.14
Very low birth-weight infants are a high-risk population,
accounting for half of infant deaths in the US each
year. Because of their vulnerability, the consequences of
understaffing are particularly acute in neonatal intensive
care units, where nurse-to-patient ratios of 1:3 for infants
least at risk and less than 1:1 for those most at risk are
recommended. A JAMA study found that 68 percent of
the highest risk infants were in understaffed units and
that their risk of infection more than doubled (from
a predicted rate of 9 percent to an infection rate of 21
percent).15 Neonatal infection more than doubles the rate
of infant mortality.
And a study in the Journal of Nursing Care Quality
documented what may be apparent to many hospital
patients, that short-staffing leads to lapses in necessary
care. Nine elements of regularly missed nursing care
were identified—ambulation, turning, delayed or missed
feedings, patient teaching, discharge planning, emotional
support, hygiene, intake and output documentation, and
surveillance—which can potentially impact the quality and
cost of patient outcomes. For example, failure to ambulate
and turn patients was linked to “to new onset delirium,
delirium, pneumonia, and increased length of stay and
delayed discharge.” 16
Overwork, fatigue, errors and burnout
WHAT NEW YORK HOSPITAL
WORKERS SAY ABOUT STAFFING.
“I have witnessed actual physical
harm to one of my patients
because of poor staffing in a prior
shift. It made me physically ill.
Continued short staffing in my unit
has led to so many preventable
conditions and poor care.”
–Kelly P., RN
“When our nursing staff is unable
to provide patient care in a timely
fashion, it affects the ability of our
other professionals to treat their
patients. So there is a big “circle”
of delayed care that occurs.”
–Ron H., Clinical Lab Scientist
“I am now forced to work faster
and faster to churn patients out
of surgery to increase the higher
number of cases and the money
the hospital gets—Profits. I hate
what I am forced to do. I don’t
feel like a nurse anymore, just an
assembly worker at GM. Would
you be happy if you knew I was
rushed to do your surgery?”
–Kathy B., RN
Overwork and fatigue due to understaffing leads to
medical errors and other adverse events. In one survey,
27 percent of nurses admitted that they had made an
error and 65 percent reported they had nearly made
an error at work because of fatigue.17 In a study of 11
hospitals, medication errors increased by 18 percent for
every 20 percent decrease in staffing below recommended
minimums.18 Overwork caused by understaffing can
also lead to staff burnout. A 2012 study published in the
American Journal of Infection Control linked nurse burnout
to higher rates of healthcare-associated infections costing
hospitals millions of dollars a year.19
“If you drop your child off at
daycare, there are laws which
state how many children there can
be per provider. But if you drop
that same child at the ER in a
health crisis, no laws protect them
by making sure that there will
be a nurse able to give them the
attention that they need, possibly
in order to save their life.”
8
Communications Workers of America District One
PAYING FOR WHAT DOESN’T COUNT • MAY 2015
-Sarah B. RN and mother
Appropriate staffing levels improve outcomes
Extensive research has shown, not surprisingly, that higher
staffing levels correlate with reduced rates of healthcare
associated infections, other adverse outcomes and
readmissions. A JAMA study on the impact of understaffing
concluded that “substantial decreases in mortality could
result from increasing registered nurse staffing, especially
for patients who develop complications.” 20
A study of nurse staffing that examined the records of five
million medical patients and 1.1 million surgical patients
treated at 799 hospitals found that:
• I n hospitals with higher rates of RN staffing, medical
patients had four to 12 percent reductions in adverse
outcomes such as urinary tract infection, pneumonia,
shock, upper gastrointestinal bleeding and longer
hospital stays, depending on the adverse event
measured;
• H
igher staffing at all levels of nursing—RNs, LPNs
and aides—resulted in a two to 25 percent reduction
in adverse outcomes, depending on the outcome; and
• M
ajor surgery patients in hospitals with high nurseto-patient ratios had lower rates of urinary tract
infections and failure to rescue.21
An AHRQ-funded study found that adding one more
hour of staffing per patient day reduced the likelihood that
a surgical patient would contract pneumonia by nearly
nine percent.22
9
1 0 Communications Workers of America District One PAYING FOR WHAT DOESN’T COUNT • MAY 2015
Where The Money Is for
Safe Staffing
COMPENSATION, BY THE NUMBERS
As income tax-exempt entities, hospitals are required to
annually report the compensation of trustees, directors,
officers, key employees23 and the five highest paid
employees. On Schedule J of the IRS Form 990 return,
compensation is broken out by base compensation,
bonus and incentive compensation, other reportable
compensation, deferred compensation, and nontaxable
benefits. Other reportable compensation can include:
payment for earned time off; severance; contributions to
a 401(k), 403(b) or nonqualified deferred compensation
plan; and country club memberships. Nontaxable benefits
may include healthcare and other insurance, housing
allowances, and tuition remission for family members. For
the purposes of this report, compensation includes all of
these except nontaxable benefits.24
The million dollar club
The compensation packages of New York nonprofit hospital
executives are exceedingly generous. Review of 2012 IRS
Form 990 returns for 155 New York nonprofit hospitals
identified 412 executives who received compensation
exceeding $350,000, totaling $339 million.25 A table
showing the reported compensation of each identified
executive is available upon request.
Chief executive officer compensation topped $3 million
at NYU Hospitals Center, $4.4 million at Montefiore
Medical Center, $3.6 million at New York-Presbyterian
Hospital, $3.5 million at North Shore University Hospital/
NS-LIJ Health System and $3.2 million at Mount Sinai
Hospital. As shown in Table 1, 92 executives at 41 hospitals
and healthcare systems received at least $1 million in
compensation in 2012.26
Pay at many smaller hospitals is also exceedingly generous
High earners are not exclusive to the largest hospitals. In
relation to their employer’s revenue, CEO compensation
at many small hospitals far exceeded compensation at
large hospitals such as NYU Hospitals Center ($24.10 per
$10,000 revenue),28 Maimonides Medical Center ($24.69),
Table 1: HOSPITAL EXECUTIVES PAID AT LEAST
$1 MILLION IN 2012.
Hospital/Healthcare System
New York-Presbyterian Hospital
North Shore University Hospital/NS-LIJ Health
System
Montefiore Medical Center
NYU Hospitals Center
Mount Sinai Hospital
Memorial Sloan-Kettering Cancer Center
Catholic Health System of Long Island
Beth Israel Medical Center/Continuum Health
Partners
St. Francis Hospital-Roslyn
Lawrence Hospital Center
Hospital for Special Surgery
Jamaica and Flushing Hospital Medical
Centers/MediSys Health
Long Island Jewish Medical Center
Rochester General Hospital
Unity Hospital of Rochester
White Plains Hospital Medical Center
Phelps Memorial Hospital
Bronx-Lebanon Hospital Center
Winthrop University Hospital
St. Charles Hospital
Hudson Valley Hospital Center
Maimonides Medical Center
Catholic Health System -Buffalo
Northern Westchester Hospital
Brooklyn Hospital Center
Staten Island University Hospital
Kaleida Health
United Health Services/Wilson and
Binghamton Hospitals
Lutheran Medical Center
Kingsbrook Jewish Medical Center
New York Methodist Hospital
Albany Medical Center
Strong Memorial Hospital
Huntington Hospital
Good Samaritan Hospital Medical Center –
Long Island
Our Lady of Lourdes Memorial Hospital
South Nassau Communities Hospital
St. Luke’s-Roosevelt Hospital Center
Lenox Hill Hospital
Orange Regional Medical Center
Vassar Brothers Medical Center
TOTAL
Total
Number $ million
15
27.7
12
22.2
5
5
5
4
4
3
10.3
9.9
8.6
7.0
5.7
4.9
3
1
3
2
3.9
3.9
3.9
2.6
2
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
2.2
2.1
1.8
1.8
1.9
1.8
1.8
1.6
1.6
1.5
1.5
1.5
1.4
1.4
1.3
1.3
1
1
1
1
1
1
1
1.3
1.3
1.2
1.2
1.1
1.1
1.1
1
1
1
1
1
1
92
1.1
1.1
1.0
1.0
1.0
1.0
152.827
11
Table 2: CEO COMPENSATION AT SELECTED NONPROFIT HOSPITALS WITH LESS THAN $250 MILLION
IN REVENUE IN 2012.
2012 revenue,
$ millions
2012 CEO
compensation
Compensation per
$10,000 of revenue
100.5
$461,839
$45.95
44.5
$468,682
$105.33
Hospital
County
Cortland Regional Medical Center
Cortland
Eastern Long Island Hospital
Suffolk
Kingsbrook Jewish Medical Ctr.
Kings
201.7
$1,288,386
$63.87
Hudson Valley Hospital Center
Westchester
166.3
$1,620,41529
$97.66
Mount Saint Mary’s Hospital
Niagara
89.3
$764,578
$85.62
Nathan Littauer Hospital
Fulton
95.9
$448,825
$50.97
New York Downtown Hospital
New York
219.7
$986,407
$44.89
Northern Dutchess Hospital
Dutchess
74.2
$449,005
$60.51
Northern Westchester Hospital
Westchester
241.6
$1,550,598
$64.34
Phelps Memorial Hospital
Westchester
217.4
St Mary’s Healthcare
Montgomery
Southampton Hospital
Westchester Square Medical Center
30
$85.49
149
$813,087
$54.43
Suffolk
121.0
$596,354
$49.28
Bronx
69.3
$490,070
$70.71
Hospital for Special Surgery ($20.41) and Staten Island
University Hospital ($26.37). As shown in Table 2, CEOs
of some modest sized hospitals were paid in excess of
$1 million in 2012.
Most hospitals paid bonuses, some paid former executives
Seventy percent of hospitals that compensated executives
$350,000 or more in 2012 included bonus/incentive
payments in their compensation packages. These payments
totaled $61.4 million, compared to base salaries totaling
$203.7 million.
• S
everal CEOs were paid bonuses/incentives of more
than $1 million, including the CEOs of North ShoreLIJ Health System ($1.6 million), Mount Sinai Hospital
($1.5 million) and New York-Presbyterian Hospital ($1.3
million).
• A
bonus can exceed the base salary. For instance, the
CEO of Our Lady of Lourdes Memorial Hospital
was paid a bonus of $611,998 on top of a base salary
of $378,164 and the CEO of Northern Westchester
Hospital received a $911,895 bonus/incentive payment, in
addition to base compensation of $608,999.
• H
ospitals paid bonuses each worth hundreds of
thousands of dollars to executives in charge of marketing,
public affairs, human resources, real estate, investments,
and strategic planning who had no responsibility for
patient care.
$1,854,678
A number of hospitals also reported substantial payments to
former executives in 2012. New York-Presbyterian Hospital
paid its former CEO and president $5.6 million, making
him the most highly compensated hospital executive in
New York, despite his retirement.31 Additional hospitals
that paid former executives include Brooklyn Hospital
Center, Mount Sinai Hospital, and St. Joseph’s Hospital
Medical Center in Syracuse.32
Nonqualified “top hat” deferred compensation plans
In 2012, Crain’s New York Business reported, “New York’s
nonprofit hospitals have jumped on the for-profit corporate
bandwagon in embracing generous retirement plans as
part of a recruitment and retention strategy for senior
management,” noting that in some cases the payouts from
these plans “rival their annual seven-figure base salaries.” 33
IRS Form 990 returns for 2012 report, for example, that
North Shore-LIJ set aside more than $1 million in a
nonqualified plan for its CEO and almost $640,000 for an
executive vice president and medical school dean. Catholic
Health Services of Long Island set aside $344,596 for an
executive vice president and chief financial officer.
Top hat plans allow “a select group of management or highly
compensated employees” who earn salaries substantially
higher than those of other employees to defer payment of
compensation.34 Long common for highly compensated
corporate executives, these top hat plans are exempt from
strict requirements and limitations on contributions and
1 2 Communications Workers of America District One PAYING FOR WHAT DOESN’T COUNT • MAY 2015
benefits that govern 401(k) and other qualified benefit plans.
These plans are funded by employers and there is no cap on
the amount such a plan can pay. Benefits may be paid upon
retirement, separation from service, disability, death, or upon
reaching a predetermined number of years of service as a
retention incentive.
Generous severance payments, too
Leaving hospital employ can also be very remunerative.
Eleven hospitals reported 18 severance payments of at
least $100,000 in 2012. Catholic Health System of Long
Island made the largest payments, including $1 million
to the President/CEO who retired in July 2011, and $1.8
million to his successor, on top of nearly $1.3 million in
compensation for a mere eight months of service. Other
large severance payments that year included $1.7 million
paid by Kaleida Health to several executives, including
$457,437 to the chief operating officer. Even hospitals
reporting severe financial distress made large severance
HOW DO THESE JOBS ADVANCE
PATIENT SAFETY?
Some nonprofit hospital administrators
with no responsibility for patient care were
nonetheless paid enormous compensation in
2012, such as:
enior VP Strategic Planning, North Shore
• S
University-LIJ, $1,013,422;
• S
VP for Real Estate, NYU Hospitals Center,
$908, 844;
• V
P for Strategy, New York-Presbyterian
Hospital, $925,124;
• S
pecial Senior Advisor, New YorkPresbyterian Hospital, $822,804;
• S
pecial Advisor, Montefiore Medical Center,
$450,654;
• S
enior VP Corporate Initiatives, Beth Israel
Medical Center/Continuum, $409,533.
Positions like these help explain why
administration accounted for 25.3 percent
of hospital spending in the US, compared to
12.4 percent in Canada in 2011
payments, notably Wyckoff Heights Medical Center, which
paid $425,000 in severance to one executive and $125,003
to another, despite all but defaulting on $109 million in
state-secured bonds.35
Extras
The top executives of some New York hospitals enjoy
benefits long considered the preserve of Fortune 500
executives, such as residences for personal use;36 personal
maids, chefs or chauffeurs;37 first class travel;38 and country
club memberships.39
WHY NONPROFIT HOSPITAL EXECUTIVES
SHOULD BE PAID LESS
Running a hospital or hospital system is a complex and
demanding job, but too many New York nonprofit hospital
executives are paid undeservedly high compensation.
CEOs of hospitals with mediocre or poor quality and
safety records are nonetheless lavished with enormous
compensation packages paid for largely by taxpayers.
Moreover, the example set by New York City’s Health and
Hospitals Corporation demonstrates that qualified hospital
management is possible without a high price tag.
Executive compensation is unrelated to hospital
quality or patient safety
It is a truism that talent costs money. Therefore, hospitals
contend that high compensation is necessary to attract
CEOs who deliver the highest quality of care. However, a
2014 study in the Journal of the American Medical Association:
Internal Medicine found no link between nonprofit hospital
CEO pay and key quality indicators such as mortality
and readmission rates.40 These findings echo a 2012 study
by the New Hampshire Center for Public Policy Studies,
which found virtually no correlation between executive
compensation and quality of care of hospitals in that state.41
The same conclusion applies to New York’s nonprofit
hospitals. There is no evidence that higher-paid hospital
executives deliver better patient safety or medical outcomes
than lower-paid hospital executives.
Paying hospital executives more does not lead to higher
quality
If high executive compensation correlated positively with
top quality and patient safety performance, then it would
follow that the highest paid executives would lead hospitals
with the best quality and patient safety records. But that
13
$600,000. As Consumer Reports noted, “Some well-known
hospitals have less-than-outstanding safety scores,” among
them New York-Presbyterian and Mount Sinai Medical
Center,43 which provided compensation of more than
$3 million to their respective CEOs in 2012.
Some well-known hospitals have
had less-than-outstanding Consumer
Reports safety scores, like New
York-Presbyterian and Mount Sinai
Medical Center, which each provided
compensation in excess of
Paying hospital executives less does not lead to lower
quality.
$3 million
If higher compensation resulted in better care, CEOs paid
least would be over-represented among the hospitals with
the worst medical outcomes. Again, that is not the case.
A total of 45 New York nonprofit hospitals with revenues
greater than $25 million paid their CEOs less than
$500,000 in 2012. But only three (Brookhaven Hospital,
Glen Cove Hospital and Rome Memorial Hospital) are
represented among the hospitals in the bottom quartile
of nonprofit hospitals on both Medicare’s VBP and
Readmissions Reduction programs for FY 2015 (see Figure
5 and Appendix A2).45 Four of them (Columbia Memorial,
Jamaica Hospital, St. Luke’s Roosevelt and Wyckoff
Heights) were also penalized under the Hospital Acquired
Condition program for FY 2015.
to a CEO in 2012.
is not the case in New York. Instead, no hospital with a $1
million CEO was among the 13 hospitals which performed
in the top quartile for both the Medicare Value Based
Purchasing and Readmissions Reduction Programs (see
Figure 4 and Appendix A1).42
All the CEOs at these better performing hospitals earned
less than $1 million and all but four earned less than
Figure 4: 2012 CEO COMPENSATION AT NY NONPROFIT HOSPITALS WITH
THE BEST VBP AND RRP PERFORMANCE FOR FY 2015
Centers For Medicare & Medicaid Services
$1,200,000
$1,000,000
$800,000
$600,000
$400,000
$200,000
ra
.F
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1 4 Communications Workers of America District One PAYING FOR WHAT DOESN’T COUNT • MAY 2015
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Figure 5: 2012 CEO COMPENSATION OF NY NONPROFIT HOSPITALS WITH
THE WORST VBP AND RPP PERFORMANCE FOR FY 2015
Centers For Medicare & Medicaid Services
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$1,750,000
$1,500,000
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$1,000,000
$750,000
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$250,000
Despite their hospital’s performance, some of these CEOs
were paid proportionately far more than those of nearby
hospitals of similar size and better results. For instance:
• H
ealth Alliance Broadway (Kingston) paid its CEO
$52.05 per $10,000 of revenue, compared to $15.59
per $10,000 at Vassar Brothers Medical Center, across
the river in Poughkeepsie;46
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Coincidentally, three of the worst performing hospitals also
paid their CEOs more than $1 million, including Beth Israel
Medical Center with more than $2 million in combined
compensation, among the highest in the state. And, despite
their records, four CEOs of the worst performing hospitals
were rewarded with bonus/incentive payments in 2012.
Three of the worst performing
hospitals paid their CEOs more than
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• S
t Luke’s Cornwall Hospital paid its CEO $42.68 per
$10,000 of revenue, exceeding the $27.36 per $10,000
revenue paid to the CEO of its neighbor, Orange
County Medical Center; and
• R
ome Memorial Hospital paid its CEO $30.02 per
$10,000 of revenue versus the $22.91 per $10,000 in
revenue paid to the CEO of St. Elizabeth Medical
Center, its Oneida County neighbor.
Hospital trustees have a duty to provide quality care
As with all corporations, executive compensation is
determined by a board. However, New York nonprofit
hospitals are distinguishable from for-profit corporations
in that they are incorporated with the specific principal
purpose of delivering quality health care to their
communities. This imposes a duty on hospital trustees to
inquire whether there are practices in place that address
deficiencies in patient care and to remedy them.47 For this
reason, an executive compensation policy that puts revenue
growth ahead of patient care would be incompatible with
the fiduciary duty of that hospital’s board.
15
COMPENSATION POLICIES
DISCOURAGE SPENDING ON
PATIENT SAFETY AND
HOSPITAL QUALITY.
To determine compensation,
follow the leader
Most hospitals include a brief explanation of
executive compensation determination process
in their IRS Form 990 returns. Based on forms
submitted by New York nonprofit hospitals, most base
executive compensation primarily on what is paid by
comparable hospitals or hospital systems. Hospital
boards typically empanel a compensation committee
that engages a consultant to perform a study of
executive compensation at comparable hospitals.
CEO compensation is then often targeted at the 50th
percentile, which is construed to satisfy the IRS’s
“rebuttable presumption of reasonableness” test for
nonprofit executive compensation.
In addition to perpetuating unjustifiably high
compensation, this herd mentality helps to explain
why compensation48 can remain very high despite poor
performance on safety and quality indicators.
A number of hospital compensation policies cited
hospital financial results as a determinant.49 In fact,
among the 70 percent of nonprofit hospitals that
paid executives a bonus/incentive in 2012, several
explicitly tied it to the generation of a surplus (e.g.,
Westchester Square, New York Methodist, and New York
Hospital Medical Center). Among New York nonprofit
hospitals with more than $25 million in revenue, only
13 identified “patient safety,” “hospital quality,” or
“customer satisfaction” as factors to be considered,
and only in conjunction with financial results.50
There is no way to tease out the degree to which an
improvement in hospital quality or safety could lead, if
at all, to a bonus or incentive payment.
Moreover, this strong emphasis on financial
performance implicitly discourages investments that
would improve medical outcomes. Because they
concomitantly increase expenses as they reduce
revenue, investments that improve patient safety could
cost a CEO his or her bonus and possibly also result in
less base compensation.
The inherent financial disincentive to improve medical
outcomes was explained by a 2013 Journal of the
American Medical Association study that analyzed
post-surgical records of 34,256 people, of whom 1,820
had one or more avoidable complications, such as
blood clots, pneumonia or infected incisions.51 The
median length of stay for patients with complications
quadrupled to 14 days, and hospital revenue averaged
$30,500 more than for patients without complications
($49,400 versus $18,900). As the New York Times
reported, “Hospitals make money from their own
mistakes because insurers pay them for the longer
stays and extra care that patients need to treat surgical
complications that could have been prevented.”52
Trent Stamp, former head of Charity Navigator, says,
“Rebuttable presumption is
the equivalent of a school-aged
child defending their actions
by saying, ‘Everyone else is
doing it.’ It’s silly, and it’s time
for Congress to step in.”
Reasonable compensation can attract good
managers
The claim that the high compensation levels at New York
nonprofit hospitals are necessary to attract qualified talent
is further refuted by the patient care and safety records
of New York City Health and Hospitals Corporation
(HHC) hospitals. While paying executives reasonable
compensation, HHC hospitals averaged better performance
on hospital quality measures than New York nonprofit
hospitals overall.
The HHC is composed of 11 acute care general hospitals,
four skilled nursing facilities, six diagnostic and treatment
centers, a home healthcare agency and more than 70
community-based clinics. HHC also operates a managedcare health plan. The HHC President/Executive Director
was paid $366,836 in 2012,53 a small fraction of the
$1 million to $4 million in compensation received by so
many New York nonprofit hospital system CEOs.
HHC’s 11 acute care hospitals are large institutions with
revenues as high as $783 million. The responsibilities
of their executive directors are at least comparable
to those of their nonprofit hospital peers, but HHC
executive directors are paid much less, as illustrated by the
comparison of compensation at two HHC hospitals and
two New York City nonprofit hospitals with comparable
revenue shown in Figure 6.54
Despite paying executives less, HHC hospitals performed
as well as, and in some cases better than, well-regarded
New York nonprofit hospitals on Medicare hospital
quality incentive programs. As shown in Table 3, HHC’s
average Medicare readmissions penalty for FY 2015 is
0.61 percent, better than both the US average of 0.63
percent and the New York State average readmissions
penalty of 0.73 percent.
1 6 Communications Workers of America District One PAYING FOR WHAT DOESN’T COUNT • MAY 2015
Figure 6: EXECUTIVE DIRECTOR/CEO COMPENSATION HOSPITALS
WITH COMPARABLE REVENUE – 2012
$1,800,000
$1,600,000
$1,400,000
$1,200,000
$1,000,000
$800,000
$600,000
$400,000
$200,000
$0
Bellevue Hospital Center
(HHC) $687 million
Bronx-Lebanon Hospital
$611 million
HHC’s Harlem Hospital had the third best VBP
performance of New York City hospitals and the 15th
highest VBP score of New York State hospitals. Harlem
Hospital outperformed Strong Memorial and New YorkPresbyterian on both the VBP and RRP and did better
than NYU Hospitals Center on readmissions. HHC’s
Lincoln Hospital outperformed North Shore-Long
Island Jewish on both the VBP and RRP measures and
outperformed Mount Sinai Hospital on readmissions.
HHC’s Queens Hospital Center outperformed Faxton-St.
Luke’s on VBP. HHC’s North Central Hospital outdid
Kaleida Health on VBP and NYU Hospitals Center on
readmissions.
Furthermore, Leapfrog Group® gave 36 percent (four) of
the 11 HHC hospitals an “A” Patient Safety Grade in 2014,
compared to 22 percent of all hospitals in New York State.
And the 44 percent decline in New York City medical
malpractice claim payments between 2003 and 2012 is
strong evidence of HHC’s commitment to improving
patient safety.55
Metropolitan Hospital Center
(HHC) $265.8 million
New York Downtown Hospital
$219.7 million
Nonprofit hospitals are essentially public institutions
Many New York nonprofit hospitals operate like giant forprofit corporations. They provide enormous compensation
packages typical of major private corporations and
perquisites like first class travel, country club dues and
severance payments. As in the private sector, their boards of
directors press for ever higher revenue.
But nonprofit hospitals are distinguishable from private
for-profit corporations in critical ways. For-profit
corporations survive on their earnings in the marketplace.
Nonprofit hospitals depend on billions of dollars in public
subsidies from public health insurance program revenue
and exemptions from local, state and federal taxes. Every
nonprofit hospital in New York would declare bankruptcy
if these subsidies were eliminated. Private for-profit
companies are responsible to investors. Nonprofit hospitals
are responsible first and foremost for delivering the highest
quality care to the public.
17
Table 3: NYC HEALTH AND HOSPITALS
CORPORATION VALUE BASED PURCHASING
(VBP) AND READMISSIONS REDUCTION
PROGRAM (RRP) REIMBURSEMENT
ADJUSTMENTS FOR FY 2015.
Hospital
Net VBP
RRP
adjustment Penalty
Harlem Hospital
0.48%
-0.12%
North Central Bronx Hospital
0.16%
-0.53%
Bellevue Hospital Center
0.07%
-0.52%
Lincoln Hospital
0.02%
-0.48%
Metropolitan Hospital
-0.27%
-0.30%
Kings County Hospital
-0.22%
-0.39%
Queens Hospital
0.18%
-0.85%
Jacobi Medical Center
-0.41%
-0.27%
Elmhurst Hospital Center
-0.33%
-0.73%
Woodhull Hospital
-0.23%
-1.06%
Coney Island Hospital
-0.02%
-1.49%
HHC AVERAGE
-0.05%
-0.61%
The degree to which the government underwrites
nonprofit hospitals essentially renders them public
institutions. Therefore, executive compensation should
be based on comparisons to executives in public service
with equivalent responsibilities, rather than to private
executives. A good example is the Executive Director of
the Port Authority of New York and New Jersey. He is
responsible for airports, tunnels, bridges, the PATH mass
transit system, marine terminals, and billions of dollars in
capital projects. He also plans for and supervises the Port
Authority’s response to natural disasters and would be on
the front lines if there were another terrorist attack on
New York. For a position with responsibilities at least as
complex and demanding as running a New York hospital,
he is paid $289,667 and is ineligible for bonuses and
performance incentives.56
Service to the public should be compensated fairly, but no
one should become a multimillionaire working for a charity
at public expense.
Tax exemptions worth billions
Early in the 20th century, tax-exempt status was granted to
American hospitals because they were generally operated
by religious or philanthropic organizations as charitable
institutions to serve the poor. They provided a public benefit
financed largely by donations and generated little if any
income. Exemptions were founded on the notion that these
institutions would devote the money otherwise paid in taxes
to improving the health of their communities.
Hospitals now benefit from three kinds of federal tax
breaks: from capital taxes on income and property; in
bond financing (which also frees up nonprofit hospital
endowments to earn tax-free income); and deductibility
of charitable contributions. They additionally benefit
from exemptions on state income tax, sales tax and local
property tax.
The foregone revenue from such exemptions is enormous.
A 2012 study by the California Nurses Association,
Benefitting from Charity Care: California Not-for-Profit
Hospitals, found that California’s 196 not-for-profit
hospitals received $3.271 billion in government subsidies
and other benefits from tax-exempt status in 2010.57 This
included $370 million in foregone property taxes, $701
million in foregone sales taxes, $1.6 billion in foregone
federal income taxes on net income, $252 million in state
income taxes on net income and $34.8 million from taxexempt bond financing.
While differences in New York’s state and local tax
structures and population size may change the calculus,
tax-exempt status conservatively saves New York nonprofit
hospitals more than one billion dollars a year.
Nonprofit hospitals depend on Medicare and Medicaid—
yet pay executives millions
The dependence of New York nonprofit hospitals on
public health insurance programs is evidenced by New
York State Department of Health (DOH) data showing
that 49 percent of their inpatient discharges were covered
by Medicare or Medicaid in 2011 (the most recent
year for which data was available). DOH reported that
Medicare and Medicaid accounted for at least two-thirds
of inpatient discharges at one out of six hospitals.58
In addition, audited financial statements indicate
that Medicare and Medicaid accounted for at least
half of hospital income from medical service billings
(net patient service revenue)59 at well over half of the
hospitals/ healthcare systems reporting in 2012. The
growing number of New Yorkers covered by Medicaid
since enactment of the Affordable Care Act has made
nonprofit hospitals even more dependent on taxpayerfunded health insurance.
1 8 Communications Workers of America District One PAYING FOR WHAT DOESN’T COUNT • MAY 2015
Figure 7: MEDICARE/MEDICAID SHARE OF NET PATIENT SERVICE
REVENUE AT SELECTED HOSPITALS – 2012
Wyckoff Heights Medical Center
88%
Vassar Brothers Medical Center
64%
Unity Hospital Rochester
51%
Sisters of Charity
51%
Rochester General Hospital
57%
North Shore-LIJ Health System
50 %
New York-Presbyterian Hospital
55%
New York Methodist Hospital
59%
Mercy Hospital
54%
Maimonides Medical Center
76%
Lutheran Medical Center
76%
Kenmore Mercy Hospital
50%
60%
Kaleida Health
88%
Interfaith Medical Center
64%
Champlain Valley Physicians Hospital
52%
Catholic Health System of Long Island
0%
10%
20%
Figure 7 shows the share of net patient service revenue
generated by Medicare and Medicaid at selected hospitals
with high CEO compensation. Wyckoff Heights
Medical Center, which was nearly entirely dependent on
Medicaid and Medicare reimbursements, paid its CEO
nearly $765,000 and provided $650,000 in severance to
two executives, even as the hospital was being bailed out
financially by the State of New York.60
ADVERTISING AND LOBBYING
EXPENDITURES
Advertising
“Amazing things are happening here,” proclaim full page
advertisements for New York-Presbyterian Hospital. In
their ads, Kaleida Health says, “Taking care of you is
what we do.” On television, radio, newspapers and social
media, Memorial Sloan Kettering Cancer Center reassures
with the tagline “More Science, Less Fear.” (See sample
advertisements in Appendix B.)
30%
40%
50%
60%
70%
80%
90%
100%
New York hospitals reported spending $120 million on
advertising in 2012. Twenty hospitals each spent more than
$1 million, with New York-Presbyterian topping the list
at $23 million, or $33.95 per certified bed per day. NYU
Hospitals Center was next, spending $13.1 million, and the
Hospital for Special Surgery was third, with $8.0 million in
ad spending.61 Some community hospitals also spent heavily
on advertising in relation to their small size and revenue.
For example, the 216-bed Arnot Ogden Medical Center
spent $939,754.
Hospital advertising is largely wasteful and needless. Few
medical consumers are in a position to shop for a hospital
and, even if they were, advertising would be a poor use of
public resources.
• H
ospital patients rarely choose their facility. Most
inpatients are treated at the hospital where their
physicians have admitting privileges. To choose
an alternative would require selecting a different
physician first. Emergency patients are generally
brought to the hospital nearest them and will typically
be admitted there if longer treatment is necessary.
19
• F
ew medical consumers can assess hospital advertising.
How would a prospective inpatient confirm the claim
that a hospital has “the best open heart surgery”?
• H
ospital ads rarely educate. Hospital ads featuring
patients who talk about amazing recoveries and
beating cancer may inspire, but do not inform.
• H
ospital advertising sometimes exaggerates. Winthrop
University Hospital touts its “knife-less surgery” as “the
biggest advance in prostate cancer treatment in over a
decade.” (See Winthrop ad at Appendix B.) Says who?
A professor of urology and urologic oncologist writing in
Forbes Magazine gave this ad an “F,” terming it, “one of
the most egregious examples of poor copy and obvious
deceptive statements.” 62
• Th
e target audience for hospital advertising is
often physicians. Paul Levy, President and CEO of
Beth Israel Deaconess Medical Center in Boston,
forthrightly stated that hospitals advertise “to respond
to pressure from your doctors and show them that you
support their programs.” 63
Hospital advertising is also counterproductive:
• D
emand for hospital care is inelastic, with a fixed pool
of potential patients. Unlike advertising for consumer
goods, hospital advertising cannot persuade otherwise
healthy people to purchase care that they do not need.
Therefore, if advertising is effective it merely siphons
patients from other hospitals, largely at public expense.
• H
ospital advertising begets more hospital advertising
and fuels the medical arms race. When a hospital
advertises its cancer center or cardiac surgery program,
its competitors are compelled to advertise theirs, lest
they lose market share. Likewise, when one hospital
advertises new, multi-million dollar state-of-the art
diagnostic or treatment equipment, other hospitals are
compelled to purchase it as well to remain competitive.
As Atlantic Magazine recently put it:
Why are so many hospitals eagerly acquiring
and aggressively marketing such equipment? The
rationale behind their proliferation lies less in
medical evidence than in marketing campaigns,
where such sophisticated pieces of equipment seem
to define the “state-of-the-art.” 64
No public purpose undergirds any of these rationales and,
therefore, no basis exists for public monies to underwrite
multi-million dollar advertising campaigns.
SPENDING ON THE LATEST AND
GREATEST STATE-OF-THE ART
EQUIPMENT
Hospitals commonly tout purchases of hightech diagnostic and treatment equipment in
their advertising. This equipment comes with
a high price tag, but medical outcomes may be
no better than with less costly equipment and
procedures.
For example, a number of New York hospitals
purchased da Vinci robotic surgery systems
costing at least $1.8 million. The upfront cost
is about ten times the price of a high-end
laparoscope, yet HealthLine News recently
reported that “[f]ifteen years into the use
of the da Vinci system, evidence that it
trumps other methods is lacking.”* In 2013,
the president of the American Congress of
Obstetricians and Gynecologists, Dr. James T
Breeden cautioned against the use of robotic
surgery in hysterectomies:
Adding this expensive technology for
routine surgical care does not improve
patient outcomes. Consequently, there
is no good data proving that robotic
hysterectomy is even as good as—let alone
better—than existing, and far less costly,
minimally invasive alternatives.**
General surgeons have disputed the value
of robotic surgery for cholecystectomy (gall
bladder removal), and studies have shown
minimal benefit in length-of-stay reduction over
the non-robotic laparoscopic alternative.***
Moreover, with annual maintenance costing
about $125,000, this equipment represents
an ongoing drain on stretched hospital
operating budgets and another diversion of
public funds that could otherwise be used to
improve hospital quality and patient safety.
* Cameron Scott, “Is da Vinci Robotic Surgery a Revolution
or a Ripoff?” HealthLine News, February 12, 2015.
** American Congress of Obstetricians and Gynecologists,
“Statement on Robotic Surgery by ACOG President James T.
Breeden, MD,” March 14, 2013.
*** See, Vik Srinivisan, “Three big robotic surgery trends
to watch this year,” The Advisory Board Company blogpost,
April 9, 2014.
2 0 Communications Workers of America District One PAYING FOR WHAT DOESN’T COUNT • MAY 2015
Lobbying
Three major hospital associations represent the interests
of New York hospitals in Washington and in Albany:
the Greater New York Hospital Association (GNYHA),
comprising nearly 250 hospitals;65 the Healthcare
Association of New York State (HANYS); and the Iroquois
Healthcare Alliance, representing 53 hospitals and health
systems in 32 upstate counties. The three associations are
funded by hospital fees.
They may not run hospitals, but their executives were paid
as much as administrators of the largest hospital systems
in 2012:
• Th
e top five executives of the Greater New York
Hospital Association were compensated a total of
$10.924 million.66 From 2011 to 2012, their base
compensation and bonus/incentive increased 15
percent, from $6.710 million to $7.740 million.
• Th
e top five executives of the Healthcare Association
of New York State (formerly the Hospital Association
of NYS) received a combined $2.261 million,
including $952,217 for the president and $434,807 for
a former executive vice-president.67
• Th
e president of the Iroquois Healthcare Alliance was
paid $466,638.68
In addition to underwriting hospital association advocacy,
New York nonprofit hospitals reported spending
$7.5 million to lobby public officials in 2012. The three
largest spenders were New York and Presbyterian Hospital,
$822,578; Montefiore Medical Center, $756,468; and NYU
Hospitals Center, $404,988. Some hospitals noted that a
portion of their lobbying spending went to the Greater
New York Hospital Association, which spent $459,000
on lobbying. To be sure, hospitals lobby to preserve and
increase Medicaid and Medicare payments, but also against
legislation to ensure that hospitals assign adequate numbers
of patient care staff.
21
2 2 Communications Workers of America District One PAYING FOR WHAT DOESN’T COUNT • MAY 2015
Recommendations
In 2012, more than $300 million would have been
available for safe staffing had hospitals paid their executives
reasonable, competitive compensation and stopped wasting
millions of dollars on advertising. This can happen if
hospitals voluntarily reduce unnecessary advertising and
New York State enacts:
• Th
e Safe Staffing for Quality Care Act. This
proposed New York State legislation would set
licensed acute-care nurse-to-patient ratios at
reasonable and feasible minimums. Such a statute
was supported by the Journal of American Medical
Association in its 2002 study documenting the harmful
impact of understaffing on patients.
cap on hospital executive compensation. A
• A
compensation cap of: (i) $450,000 at the hospitals
with revenues exceeding $1 billion; (ii) $400,000 at
hospitals with revenues between $400 million and $1
billion; and (iii) $350,000 at hospitals with less than
$400 million in revenue would be consistent with the
compensation of HHC hospital executive directors.
These caps would cover the aggregate of base salary
and bonus, severance pay, deferred compensation
that was earned, and any employer contributions to a
retirement plan for executives at hospitals that receive
public funds. If such caps had been in place in 2012,
nonprofit hospitals would have saved at least $190
million that could have been reinvested in patient care.
incentive payments. The investigation was stymied
when every hospital but one declined, claiming
that disclosure would put them at a competitive
disadvantage, and there was no alternative publicly
available source for the information, since IRS Form
990 returns are impossibly vague concerning the
factors by which hospitals determine compensation.
It is also time for hospitals to call a truce in their advertising
competition. Hospital advertising has no value to patients
or their care and instead, according to Sidney M. Wolfe,
MD, Senior Adviser of the Health Research Group at
Public Citizen, “siphon[s] money away from healthcare.” 69
It should be scaled back dramatically. If $100 million less
had been spent on advertising in 2012, $20 million would
have remained to provide the public with important health
information and hospital safety and quality could have been
significantly improved through the addition of 1,000 fulltime direct care workers.
• A
transparency law requiring disclosure of
the factors used to determine all elements of
compensation, including base compensation,
bonus/incentive compensation, severance payments,
contributions to deferred compensation plans,
and their weight. Armed with such information, an
informed public could press for compensation to be
based first and foremost on what counts most: patient
safety and hospital quality.
The need for transparency was underscored in
2013 when Kaiser Health News/ABC News tried
to investigate hospital executive pay at nonprofit
institutions. Reporters asked dozens of hospitals for
CEO employment contracts and for information
regarding the factors used to determine bonuses or
23
2 4 Communications Workers of America District One PAYING FOR WHAT DOESN’T COUNT • MAY 2015
Endnotes
1
US Institute of Medicine, Committee on Quality of Health Care in
America, Linda T. Kohn, Janet M. Corrigan, and Molla S. Donaldson,
(Eds.), (1999).
2
hristopher P. Landrigan, MD, et al., “Temporal Trends in Rates of
C
Patient Harm Resulting from Medical Care,” New England Journal of
Medicine 363 (Nov. 25, 2010).
3
Denise Grady, “Study Finds No Progress in Safety at Hospitals,”
New York Times (Nov. 24, 2010).
4
enry Davis, “Kaleida hospital system, Wyoming County hospital
H
penalized for infection rates,” Buffalo News, December 22, 2014.
The article reported: “The region’s largest hospital system will
pay a penalty over the next year for having high rates of infections
or other patient-safety problems as part of a major effort by the
federal government to reduce medical errors.”
5
6
J ordan Rau, “1,700 Hospitals Will Win Quality Bonuses from
Medicare, But Most Will Never Collect,” Kaiser Health News, (Jan
22, 2015). Kaiser Health News is a nonprofit national health policy
news service.
Medicare Payment Advisory Commission, “Report to the Congress:
Promoting Greater Efficiency in Medicare,” (Washington, D.C. June
2007).
7
J ordan Rau, “Medicare Fines 2,160 Hospitals in Third Round of
Readmissions Penalties,” Kaiser Health News, October 2, 2014.
8
“Best Hospitals” rankings of US News and World Report are not
included because the magazine’s ranking system was shown to
have little validity in measuring what matters—patient safety.
In a 2013 critique published in the Wall Street Journal the
authors noted that, “The criteria are unrelated to quality, easily
manipulated, and incentivize the wrong choices and behaviors,”
and based too little of a hospital’s score on patient safety and
too much on reputation surveys of doctors and the use certain
`cutting-edge’ technologies that are not necessarily linked to higher
quality. See, “Those Hospital Rankings Could Use a Healthy Dose
of Skepticism,” Ezekiel J. Emanuel, Chairman of the Department of
Medical Ethics and Health Policy at the University of Pennsylvania
and Andrew Steinmetz, Senior Research Assistant, Wall Street
Journal (July 24, 2013).
9
Job Dissatisfaction,” Journal of the American Medical Association
288 (October 23/30, 2002)
14
L. Unruh, “Licensed nurse staffing and adverse outcomes in
hospitals,” Medical Care 41 (2003): 142-52
15
J. Rogowski, D. Staiger, T. Patrick, et al., “Nurse Staffing and
NICU Infection Rates,” Journal of American Medical Association
Pediatrics 167 (May 2013): 444-50.
16
Beatrice J. Kalisch, PhD, RN, FAAN, “Missed Nursing Care, A
Qualitative Study,” Journal of Nursing Care Quality, 21 (Oct-Dec
2006): 306-313.
17
Kronos, “Want to create a safer, more therapeutic environment for
staff and patients alike?” (March 2013).
18
K. Frith, E. Anderson, F. Tseng, et al., “Nurse staffing is an
important strategy to prevent medication errors in community
hospitals,” Nursing Economics 30, (Sep-Oct 2012): 288-294.
19
Jeannie P. Cimiotti, DNSc, RN; Linda H Aiken, PhD; Douglas
M Sloane, PhD; Even S Wu, BS, “Nurse staffing, burnout, and
healthcare-associated infection,” American Journal of Infection
Control 50 (August 2012): 486–490.
20
Aiken, et al., op. cit. Hospital Nurse Staffing and Patient Mortality.”
See also, “Increase in nurse numbers linked to better survival
rates in ICU,” C. Duffin, Nursing Standard (2014). The study
found that increasing RN staffing improved survival rates because
nurses spent more time with critically ill patients than other
healthcare professionals and were therefore more likely to detect
early signs of deterioration.
21
J. Needleman, P Buerhaus, S. Mattke, et al., Nurse-staffing
levels and patient outcomes in hospitals. Final report for Health
Resources and Services Administration, Harvard School of Public
Health, Boston, MA (2001).
22
S.H. Cho, S. Ketefian, V.H. Barkauskas, et al., “The effects of
nurse staffing on adverse outcomes, morbidity, mortality, and
medical costs,” Nursing Research 52 (Mar-Apr 2003): 71-79.
23
A key employee is defined as one who receives compensation
of more than $150,000, is one of the top 20 compensated
employees, and either: has responsibilities, powers, or influence
over the organization as a whole; manages a discrete activity
of the organization that represents 10 percent or more of the
organization’s total activities, assets, income, or expenses; or has
authority to control 10 percent or more of the organization’s capital
expenditures, operating budget, or employee compensation.
24
As recommended by the Nonprofit Coordinating Committee of New
York in How to Read the New IRS Form 990.
25
Compensation data was derived from the publicly available IRS
Form 990 returns filed for each New York nonprofit hospital. These
include 152 acute care general hospitals and the Hospital for
Special Surgery, New York Eye & Ear Institute, and Memorial SloanKettering Cancer Center. Job titles are as reported on IRS Form
990. If a title was not identified, the executive’s LinkedIn entry,
official biography, or press release was consulted. The number of
executives earning compensation in excess of $350,000 and the
statewide total of $350 million may be understated because a
number of executives with compensation of more than $350,000:
See 2014 Hospital Safety Score, Leapfrog Group, accessed at
http://www.hospitalsafetyscore.org/
10
11
Truven Health Analytics, Top 100 Hospitals, (22nd Ed., March
2, 2015). Alabama, Arkansas, Connecticut, Kentucky, Nevada,
New Jersey and West Virginia and the District of Columbia were
included with New York in the lowest segment.
S Department of Health and Human Services, Agency for
U
Healthcare Research and Quality, National Healthcare Quality and
Disparities Report 2013. 2013 is the most recent year posted.
State Snapshots are available at http://nhqrnet.ahrq.gov/inhqrdr/
state/select
12
Mary Frost, “Nurses at New York Methodist rally for ‘safe
staffing’,” Brooklyn Daily Eagle (Dec. 15, 2014).
13
Linda H. Aiken, PhD, RN; Sean P. Clarke, PhD, RN; Douglas M.
Sloane, PhD; Julie Sochalski, PhD, RN; Jeffrey H. Silber, MD, PhD,
“Hospital Nurse Staffing and Patient Mortality, Nurse Burnout, and
25
either were (i) not trustees, directors, officers, key employees or
among the five highest compensated employees; or (ii) were not
construed to be key employees by their employers.
26
T o avoid duplication, hospital executives reported by health care
systems and individual hospitals in 2012 IRS filings are attributed
either to the individual hospital they served, or to the health
system if they were not identified as serving an individual hospital.
This applies to executives of the North Shore-Long Island Jewish
Health System and to Catholic Health System of Long Island.
For instance, the CEO of Huntington Hospital is counted as an
executive only for Huntington Hospital and is not included among
the executives of NS-LIJ Health Care System, although he was
included on the NS-LIJ Health Care System IRS Form 990 return.
2012 executive compensation reported by Montefiore Medical
Center, New York-Presbyterian Hospital, North Shore University
Medical Center-LIJ, NYU Hospitals Center, Catholic Health
Services of Long Island, St. Charles Hospital, and Lawrence
Hospital Center was increased substantially by nonqualified
deferred compensation plan reported income.
27
T he individual hospital compensation totals in this table were
rounded. $152.8 million is the unrounded total.
28
The CEO of NYU Hospitals Center was also dean of the medical
school. His compensation included $800,000 in other reportable
compensation and $640,652 in deferred compensation.
29
T he CEO of Hudson Valley Hospital Center was paid
$67.65/$10,000 counting only base and bonus/incentive
compensation.
30
T he CEO of Phelps Memorial Hospital was paid $50.97/$10,000
counting only base and bonus/incentive compensation.
31
New York-Presbyterian Hospital’s 2012 IRS Form 990 listed
Herbert Pardes as an officer. In 2014, the New York Times
reported that he was still employed by the hospital three years
subsequent to his retirement. See, Anemona Hartocolis, “At New
York-Presbyterian Hospital, Its Ex-C.E.O. Finds Lucrative Work,”
New York Times, July 15, 2014.
32
Payments included $361,432 and $311,768 to former executives
of Brooklyn Hospital Center, $435,032 to a former officer of
Mount Sinai Hospital, and $228,686 to a former CEO of St.
Joseph’s Hospital Medical Center in Syracuse.
33
Barbara Benson, “SERPs up! Hospital execs win big,” Crain’s New
York Business, March 18, 2012.
34
Hospitals are permitted to offer such plans by Section 457(f) of
the Internal Revenue Code and commonly offer such top-hat plans
as a tool to recruit desirable candidates. Benefits can be paid as
a lump sum or a series of annual payments. Unlike qualified plans,
payments under a top hat plan are not vested until the specified
“maturity date,” is reached. Therefore, an executive will forfeit his
or her rights to payment if service is terminated before vesting.
When vested, they are reflected in the executive’s compensation
and are taxable as income. (These payments are indicated as
“other reportable compensation” in column B (iii) of IRS Form 990,
Schedule J. The deferred amount is shown in Column C, retirement
and other deferred compensation, of IRS Form 990 Schedule J.)
Under a type of top-hat plan known as a supplemental employee
retirement plan (SERP), the payment is taxable as income upon
vesting, even if it is not distributed until retirement.
The benefits provided can be substantial, especially when added
to already high compensation and bonuses. For example, Kaleida
Health’s Form 990 reported SERP taxable income for its CEO
of $340,834 and COO of $244,535 and Hudson Valley Medical
Center reported $250,000 for its president in 2012.
35
Anemona Hartocollis, “At Ailing Brooklyn Hospital, Insider Deals
and Lavish Perks,” New York Times (March 25, 2012).
36
New York Methodist Hospital, Wyckoff Heights Medical Center,
Southampton Hospital, Olean Genera Hospital provided housing
for executives.
37
Personal services were provided by Catholic Health System of
Buffalo, New York-Presbyterian Hospital, NYU Hospitals Center,
White Plains Hospital and Wyckoff Heights Medical Center.
38
First class travel was provided by New York-Presbyterian for the
CEO/President and executive vice presidents for flights longer
than four hours when business class was not available. The
Hospital for Special Surgery allowed first class on flights longer
than five hours if business class was not available.
39
Country club or social club dues were paid by Catholic Health
System-Buffalo, Kaleida Health, Lakeside Memorial Hospital,
Olean General Hospital, Orange Regional Medical Center, Our Lady
of Lourdes Medical Center and Rome Memorial Hospital.
40
Karen E. Joynt, MD, MPH; Sidney T, Le, BA; E. John Orav, PhD;
Ashish K. Jha, MD, MPH, “Compensation of Chief Executive
Officers at Nonprofit US Hospitals,” JAMA: Internal Med 174
(January 2014): 617-67. The study found “no significant
association between performance on process quality, risk-adjusted
mortality, or readmission rates and CEO compensation.”
41
New Hampshire Center for Public Policy, Executive Compensation
at New Hampshire’s Non-Profit Hospitals (June 2012).
42
The FY 2015 Readmissions Reduction Program penalties are
based on patient discharges between July 2010 and June 2013.
The FY 2015 Value Based Purchasing Program performance
period for four of the six domains was 1/1/2013-12/31/2013
and the baseline period was 1/1/2011/ 12/31/2011. For one
domain, the performance period was 10/1/2012 to 6/20/2013
and the baseline period was 10/1/2010 to 6/30/2011.
For another domain, the performance period was 5/1/2013
to 12/31/2013 and the baseline period was 5/1/2011 to
12/31/2011. Therefore, management by hospital administrators
in 2012 led to the RRP and VBP results measured in 2013 that
are the basis for FY 2015 reimbursement adjustments.
43
“How safe is your hospital? Our new ratings find that some are
riskier than others,” Consumer Reports, August 2012.
44
Readmissions Reduction Program penalties: “Medicare Fines
2,160 Hospitals in Third Round of Readmissions Penalties,”
Kaiser Health News, October 2, 2014.
45
Bonuses of $578,000 were paid to the Beth Israel Medical Center
CEO, $52,917 to the Columbia Memorial Hospital CEO, $319,917
to the Good Samaritan Hospital-Suffern CEO, and $175,000 to the
president of St. Luke’s-Roosevelt Medical Center.
46
The revenue of Health Alliance-Broadway includes Health Alliance’s
Benedictine Hospital. Vassar Brothers Medical Center revenue
includes Northern Dutchess Hospital and Putnam Hospital Center.
47
United States Department of Health and Human Services, Office
of the Inspector General, American Health Lawyers Association,
Corporate Responsibility and Health Care Quality: A Resource for
Health Care Boards of Directors (Sept. 2007).
48
As Trent Stamp was quoted by Ian Wilhelm in “Executive
Compensation at Charities Attracts New Scrutiny,” The Chronicle of
Philanthropy, February 18, 2009.
49
These included Catholic Health System-Buffalo, Unity Hospital
of Rochester and Faxton St. Luke’s Hospital (as reported in
hospital’s 2011 Form 990; Faxton-St. Luke’s Form 990 Schedule
2 6 Communications Workers of America District One PAYING FOR WHAT DOESN’T COUNT • MAY 2015
J is missing from their 2012 return). South Nassau Communities
Hospital and Winthrop University Hospital reported that “financial
or similar goals” were considered in setting compensation, and at
St. Elizabeth’s Medical Center incentive payments depended on
“the financial performance of the medical center.”
50
51
Sunil Eappen, MD; Bennett H. Lane, MS; Barry Rosenberg, MD,
MBA; Stuart A. Lipsitz, ScD; David Sadoff, BA; Dave Matheson,
JD, MBA; William R. Berry, MD, MPA, MPH; Mark Lester, MD, MBA;
Atul A. Gawande, MD, MPH, “Relationship Between Occurrence
of Surgical Complications and Hospital Finances,” Journal of the
American Medical Association 309 (April 17, 2013): 1599-1606.
52
Denise Grady, “Hospitals Profit from Surgical Errors, Study Finds,”
New York Times, April 16, 2013.
53
See, SeeThroughNY public payrolls. In addition see, “City hospital
system on life support… but HHC boss is highest-paid Mayor
Bloomberg aide,” Kathleen Lucadamo, New York Daily News,
February 28, 2011. The article explained that $351,062 was
the annual compensation at that time for the HHC chief under
a three-year contract approved in January 2010, with additional
compensation for a car. His successor took office in 2014 and is
receiving $393,000 plus a car and driver, as reported in the New
York Daily News, February 2, 2014.
HC salaries and revenue were reported in Crain’s HealthPulse
H
Extra, February 3, 2015, which also reported nonprofit executive
compensation in 2012. To ensure comparability between the HHC
and nonprofit hospitals, the compensation reflected in Figure 6 for
nonprofit CEOs counts only their base salary and bonus/incentive
payments.
55
See, generally, Office of the New York City Comptroller,
Annual Claims Reports. The most recent report posted at the
Comptroller’s website is for FY 2012. The Comptroller’s report
said that, “HHC has been pro-active in the areas of risk and
litigation management with impressive results.”
56
As reported by J. Elias O’Neil, “Virginia port CEO compensation
among the highest,” Portsmouth Daily Press, October 12, 2014.
57
Institute for Health and Socio-Economic Policy, Benefitting from
Charity Care: California Not-for-Profit Hospitals, August 15, 2012.
(The Institute is the research arm of the California Nurses
Association/National Nurses United.)
58
Derived from New York State Health Department data on the
percentage of inpatients covered by different payers. Another
0.5% of inpatient discharges were covered by CHAMPUS (Civilian
Health and Medical Program of the Uniformed Services).
59
Anemona Hartocollis, o.p.c.t.
61
The 20 hospitals that spent the most on advertising in 2012,
according to IRS Form 990 returns were: New York-Presbyterian
Hospital, $22.8 million; NYU Hospitals Center, $13.1 million;
Hospital for Special Surgery, $8.0 million; Winthrop University
Hospital, $5.0 million; Memorial Sloan-Kettering Cancer Center,
$4.6 million; Kaleida Health, $3.7 million; Mount Sinai Hospital,
$4.0 million; Maimonides Medical Center, $3.1 million; Catholic
Health System-Buffalo, $3 million; St. Peter’s Hospital, $2.5
million; Ellis Hospital, $2.2 million; St. Joseph’s Hospital
(Syracuse) $2 million; St. Luke’s-Roosevelt Medical Center, $2
million; New York Hospital Queens, $1.9 million; Rochester
General Hospital, $1.7 million; St. Francis Hospital (Roslyn),
$1.7 million; Montefiore Medical Center $1.4 million; Our Lady
of Lourdes Memorial Hospital, $1.3 million; Bon Secours Health
System, $1.2 million; Crouse Health System, $1.2 million;
and Unity Health of Rochester, $1.2 million. Advertising totals
reflected here are net of “fundraising expenses” reported under
“advertising and promotion” in Section IX of IRS Form 990.
62
Benjamin Davies, MD, “Prostate Cancer Advertising: Lies and
the Damn Lies (Part 1),” Forbes, November 10, 2014, regarding
the hospital’s CyberKnife system, a robotic radiosurgery system
used to treat tumors and other medical conditions. Doctor Davies
wrote: “CyberKnife (or Stereotactic body radiotherapy—SBRT)
has not even been tested in Phase 3 studies for prostate cancer.
There is no outcome data at all that has more than 5 years of
published data. In prostate cancer you need a minimum of 15-20
years to even begin to see any survival effect. The real advances
in prostate cancer care are in new medications that have
advanced overall survival in metastatic disease (enzalutamide/
abiraterone).” Accessed at http://www.forbes.com/sites/
benjamindavies/2014/11/10/prostate-cancer-advertising-liesand-the-damn-lies-part-1/
63
As reported in Health Beat, August 14, 2008. Dr. Levy also said,
“There is no evidence that ads work in creating business, but
we need to keep our doctors happy.” Accessed at http://www.
healthbeatblog.org /2008/08/hospital-ads-th.html
64
Richard Gunderman, “Why Are Hospital CEOs Paid So Well?,”
The Atlantic, October 15, 2013.
65
GNYHA members are primarily in New York but some members are
also in New Jersey and Connecticut.
66
Their 2012 compensation consisted of $3,609,467 in base
salary, $4,131,443 in bonus/incentive, $2,178,518 in other
reportable compensation and $1,005,396 in retirement/
deferred compensation. For the president and the executive vice
president “other” compensation included shares of common
stock in Happitique, Inc. In 2011, combined compensation of
these same individuals consisted of $3,543,730 in base salary,
$3,166,561 in bonus/incentive, $808,604 in other reportable,
and $1,300,687 in retirement/deferred compensation.
67
In addition to base compensation and bonus/incentive the
president’s compensation included $72,962 of other reportable
compensation and $81,406 of retirement and other deferred
compensation. In addition to base compensation and bonus/
incentive, the vice-president’s compensation included $1,881 of
other reportable compensation and $16,648 of retirement and
other deferred compensation.
68
$365,592 base compensation, $93,546 bonus/incentive,
$17,500 deferred compensation.
69
As reported in Jim Doyle, “Ads proliferate across St. Louis as
hospitals push services, name recognition,” St. Louis PostDispatch, November 20, 2012.
Bronx-Lebanon Hospital linked the CEO bonus to the hospital’s
“operating profit, control of growth in payroll and medical quality
performance.” Mount Sinai Hospital used JCAHO Hospital Core
Measures, patient satisfaction scores, and “other organizational
goals such as length of stay initiatives” but also “net earnings” as
one of the “metrics utilized in the bonus computation.” Montefiore
Medical Center stated that the bonus depended on financial
performance as well as “performance goals which include quality
of care, patient satisfaction, community benefit.” Schedule J, Form
990 2012 for all hospitals.
Some hospitals provided no written statement on how they
determined executive bonuses or incentive payments. Others were
vague. For example, North Shore University-LIJ Health System,
disclosed only that they were based on “many performance based
factors.”
54
60
Net patient service revenue is the income collected by a hospital
after billing for medical services it provided.
27
Appendix A
Table A1: VALUE BASED PURCHASING (VBP) & READMISSIONS REDUCTION PROGRAM (RRP)
PERFORMANCE OF NEW YORK NONPROFIT HOSPITALS IN BOTTOM QUARTILE WITH REVENUES
EXCEEDING $25 MILLION – FY 2015
Hospital
County
Net VBP Adjustment
RRP penalty
Beth Israel Medical Center
New York
-0.29%
-1.79%
Brookhaven Memorial Hospital Medical Center
Suffolk
-0.41%
-1.56%
Columbia Memorial Hospital
Columbia
-0.35%
-1.39%
Glen Cove Hospital
Nassau
-0.53%
-1.43%
Good Samaritan-Suffern
Rockland
-0.45%
-1.33%
Health Alliance Hospital Broadway Campus
Ulster
-0.44%
-1.44%
Jamaica Hospital Medical Center
Queens
-0.40%
-1.33%
Mary Imogene Bassett Hospital
Otsego
-0.47%
-0.91%
New York Methodist Hospital
Kings
-0.39%
-1.07%
Rome Memorial Hospital
Oneida
-0.47%
-0.99%
St. Luke’s Cornwall Hospital
Orange
-0.45%
-1.13%
St. Luke’s-Roosevelt Hospital
New York
-0.25%
-1.23%
Wyckoff Heights Medical Center
Kings
-0.29%
-1.50%
Table A2: VALUE BASED PURCHASING AND READMISSIONS REDUCTION PERFORMANCE OF NEW
YORK NONPROFIT HOSPITALS IN TOP QUARTILE WITH REVENUES EXCEEDING $25 MILLION – FY 2015
Hospital
County
Net VBP Adjustment
RRP penalty
Claxton-Hepburn
Clifton Springs Hospital and Clinic
St. Lawrence
0.85%
-0.09%
Ontario
0.63%
-0.15%
Community Memorial Hospital
Madison
1.47%
-0.05%
Geneva General Hospital
Ontario
0.26%
-0.02%
Highland Hospital
Monroe
0.42%
-0.25%
Jones Memorial Hospital
Allegany
0.93%
-0.19%
Northern Dutchess Hospital
Dutchess
0.39%
-0.03%
Oneida Healthcare Center
Madison
0.25%
-0.17%
Jefferson
0.62%
-0.17%
Sisters of Charity Hospital
Erie
0.48%
-0.10%
St. Francis Hospital, Roslyn
Nassau
0.37%
0.00%
St. Peter’s Hospital
Albany
0.40%
-0.03%
TLC Health Network
Cattaraugus
0.31%
-0.07%
Samaritan Medical Center
2 8 Communications Workers of America District One PAYING FOR WHAT DOESN’T COUNT • MAY 2015
Appendix B
29
3 0 Communications Workers of America District One PAYING FOR WHAT DOESN’T COUNT • MAY 2015
31
3 2 Communications Workers of America District One PAYING FOR WHAT DOESN’T COUNT • MAY 2015
33