Fourteen top executives at nonprofit Bay State hospitals raked in million-dollar-plus pay packages

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"Pay caps eyed as remedy to hospital bigs’ salaries"

By Casey Ross / Exclusive, April 9, 2008, www.bostonherald.com, Local Politics

Fourteen top executives at nonprofit Bay State hospitals raked in million-dollar-plus pay packages, a Herald review of the latest figures shows - a sharp increase from just a few years ago that’s drawing fire on Beacon Hill as citizens and businesses struggle with health-care premium hikes and benefit cuts.

“You can’t do God’s work on a banker’s salary. It just shouldn’t work that way,” said state Sen. Mark Montigny (D-New Bedford), whose bill to cap compensation at nonprofits is scheduled for a legislative hearing tomorrow. “Until we demand that these salaries be limited, we will not get continued support from the public for universal health care.”

Between 2004 and 2006, the last year for which data is available, CEOs at Boston hospitals received pay increases between 13 and 46 percent, records show.

Among the million-dollar pay packages:

$1.3 million for Boston Medical Center CEO Elaine Ullian, whose total pay increased 46 percent between 2004 and 2006.

$1.96 million for Partners Healthcare CEO James Mongan. Mongan’s pay increased 10.5 percent, to $2.1 million, in 2005 before declining slightly in 2006.

$1.48 million for Peter Holden, then-president of Caritas Holy Family Hospital in Methuen.

By comparison, only one hospital CEO made more than $1 million in 2004.

The latest pay packages include six-figure performance bonuses, retirement contributions and expense accounts that seem more in line with compensation policies at for-profit corporations than charitable institutions that receive multimillion-dollar tax breaks.

Montigny’s bill would limit compensation to $500,000 at nonprofit charities whose annual revenues exceed $1 billion.

Officials at the state’s nonprofit hospitals said they must offer competitive salaries to retain talented executives who could make millions more at private corporations.

Marshall Carter, chairman of the board of trustees at Boston Medical Center, said Ullian’s $1.3 million pay, which is calculated based on a number of performance measures, is justified given the hospital’s size and complexity. BMC has 582 beds, 5,000 employees and a $2 billion annual revenue stream.

“It’s equal to the responsibilities of any CEO in town,” he said.

But lawmakers and union leaders blasted the fat pay packages that come as eight years of double-digit premium hikes are squeezing the budgets of government, businesses and ordinary citizens. “The pay is exceeding what the general public would view as appropriate,” said Julie Pinkham of the Massachusetts Nurses Association.

The seven-figure pay packages at some nonprofit hospitals is helping to fuel a perception that they have become more focused on their bottom lines than helping the poor.

MGH President Peter Slavin has seen his compensation increase by 18 percent, to $1.05 million, since 2004.

Partners HealthCare System, which operates MGH and Brigham and Women’s Hospital, among others, pointed out that MGH is among the largest health care institutions in New England, with more than 20,000 employees and annual revenues of $2.2 billion.

“The market for senior health care executives is a national one, and we must provide competitive wages and benefits in order to attract the best individuals,” Partners spokeswoman Petra Langer said in a statement.
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Article URL: http://www.bostonherald.com/news/regional/politics/view.bg?articleid=1085950
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"Hospitals' suburban push stirs fears: State proposes limits for big medical centers"
By Stephen Smith, (Boston) Globe Staff, April 10, 2008

Concerned about big Boston medical centers muscling onto the turf of community hospitals, state health authorities yesterday proposed making such incursions more difficult.

The effort, which is certain to reverberate across the state's biggest industry, reflects growing anxiety about healthcare cost and availability, as 300,000 more residents gain coverage under the state's new health insurance law.

Health authorities are especially worried about the expansion into the suburbs because "it potentially duplicates services," said Paul Dreyer, director of healthcare safety and quality at the state Department of Public Health. "But it also potentially puts the community hospital in a situation where it cannot win competitively."

Saying they had not yet seen details of the proposal, hospital representatives declined to comment on the specifics yesterday.

Dreyer cited Children's Hospital Boston as emblematic of the push by academic medical centers into suburbs, which often have a bounty of well-insured patients. Last year, Children's opened 11 overnight beds at its satellite facility in Waltham.

The expansion did not require approval under the state's existing regulations, but that would change under the more rigorous rules proposed yesterday. Hospitals wanting to place beds in a new location would have to prove that the expansion did not duplicate existing services.

A Children's spokeswoman, Michelle Davis, defended the opening of the Waltham in-patient beds, saying "it's really important for us to be able to meet the demand that we have, and one of the things Waltham allowed us to do was to respond to that demand for capacity. Adding those beds really helped to depressurize" the main campus in Boston, she said.

The move by public health officials occurs at the same time state Senate President Therese Murray is championing a law that would go even further, requiring special state approval for surgical centers.

The restrictions represent the most aggressive gambit in decades by the state to restrict specialists from opening free-standing surgical centers and to regulate hospitals' ability to move beds.

"The senate president is concerned about the proliferation of these very expensive capital projects," said David Seltz, a senior policy adviser to Murray. "This is just a first step for us."

Nationwide, regulation of hospital construction, as well as acquisition of expensive medical gadgetry, has had an erratic history since the 1970s, an era of stringent regulation. In the 1980s, some states abandoned requirements that hospitals go through an elaborate approval process, although Massachusetts continued to regulate the largest projects.

The push to strengthen regulations again "points out the schizophrenic nature of our current process," said Dr. Alan Woodward, a member of the Public Health Council, which must approve the proposed changes.

Landlocked Boston teaching hospitals, concerned that suburbanites are loathe to make the trip into the city, have increasingly viewed nearby cities and towns as fertile territory.

In 2006, Tufts Medical Center and New England Baptist Hospital floated the idea of joining forces to build a suburban campus. Five months later, New England Baptist seemed poised instead to team with Beth Israel Deaconess Medical Center in the suburbs. Neither marriage worked out, but the courtships were enough to make community hospitals anxious.

"One of our most immediate and significant threats to community hospitals is the inappropriate expansion of these facilities that really can damage the community hospitals' viability very quickly," said Donald J. Thieme, executive director of the Massachusetts Council of Community Hospitals, a trade group.

But it's not only the prospect of full-scale medical centers that alarm the community hospitals. It's also satellite outpatient surgery centers opening in places like Foxborough. Last May, plans were unveiled for marquee orthopedic surgeons from Massachusetts General Hospital to begin fixing broken bones in a new sports medicine center near the home of the New England Patriots.

In a statement, a spokeswoman for Partners HealthCare, the corporate parent of Mass. General and Brigham and Women's Hospital, said: "We understand that healthcare is changing and that some adjustments to the . . . process may be necessary to ensure that healthcare resources are allocated as fairly and efficiently as possible."

Rich Copp, a spokesman for the Massachusetts Hospital Association, acknowledged the need to reconsider regulation. "The challenge is going to be to make sure we strike the right balance between appropriate oversight while avoiding counterproductive red tape," he said.

Public hearings about the proposed Department of Public Health regulations will be conducted during the next two months, and a spokesman for Murray said her legislation is scheduled for a vote by the full Senate a week from today.

The state's public health commissioner, John Auerbach, said it has never been more important to ensure that healthcare dollars are used wisely. Costs soar even as insurance coverage reaches an unprecedented level in the state.

"We want healthcare reform to work, so we also want to think about the institutions within the state that are needed to ensure that there is access to high-quality care," said Auerbach, who added that the objective of the regulations is not to stymie all expansion. "It would require there to be a thoughtful process to look at need and look at impact before the license was granted," he said.
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Stephen Smith can be reached at stsmith@globe.com.
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