If you are wondering why health care costs are high, look to CEO pay

I recently wrote a post about an uninsured friend’s trip to Miami Valley Hospital for three stitches from a clean cut.

The total for 3 stitches: $1423.38 or $474.46 per stitch.

This is criminal- as is what the CEO of a “nonprofit” hospital is paid. The Dayton Daily News did a little real reporting today and pointed out that the CEO’s are making millions, while the hospitals are granted tax free status.

I understand executive compensation, but considering that more than half of all Americans can’t afford health care, while these primadonna CEO’s are getting paid huge sums with zero personal risk has to stop. NO.

Some excerpts from each of the three articles:

While overall pay in the region rose 13 percent from 2002 to 2007, hospital CEO total compensation jumped an average of 59 percent, according to a Dayton Daily News analysis.

Tom Breitenbach, chief executive of MedAmerica Health Systems Corp. and Premier Health Partners, led the way. After exercising benefit cashout options of $3 million in 2007, Breitenbach made $4.1 million, or four times his 2002 earnings, according to IRS documents. During a six-year period from 2002 to 2007, his total compensation was more than $17 million, including $8.9 million from an executive investment plan, documents show.

Frank Perez, chief executive of Premier’s nearest competitor, Kettering Adventist Healthcare, was paid $1.3 million in cash compensation and $1.7 million in total compensation in 2007, or about double from 2002. From 2002 to 2007, his total compensation — including retirement benefits and expense accounts — was $7.9 million….

Hospital officials also say top pay is needed to attract and retain top candidates, including those who might go to work in the for-profit industry. But consumer advocates argue that nonprofit hospitals, which pay no taxes and receive most of their revenue from tax dollars, have a public duty to restrain executive salaries, especially when many patients and their families are struggling.

“We have consumers who are breaking under health care costs,” said Cathy Levine of the Universal Health Care Action Network of Ohio. “We can no longer support these skyrocketing CEO salaries.”

via Times are good for nonprofit hospital executives.

And while there are federal guidelines on the pay, they are so convoluted that they aren’t enforced or enforceable.

The report concluded that the reasonable compensation standards “have proved difficult for the IRS to administer (because of) imprecise legal standards (and) complex, varied and evolving fact patterns.”

The report added: “Amounts (of compensation) reported appear high but also appear supported under current law. For some, there may be a disconnect between what, as members of the public, they might consider reasonable, and what is permitted under the tax law.”

via Nonprofit hospitals face federal scrutiny about executives’ pay.

But the real shocker comes out in yet a third article- besides granting the hospital property tax exemptions, we contribute $5 million in tax dollars to these “nonprofit hospitals” as part of our Health and Human Services levy:

Consumer advocates say nonprofit hospitals have no business competing with for-profits because of their tax-exempt status, their ability to raise donations from the community and their revenues from tax-supported programs like Medicare and Medicaid, which account for more than half of the average hospital budget. In Montgomery County, hospitals receive a total of $5 million per year from the Human Services Levy for indigent care. (emphasis added)

“Whose money is this?” asked Cathy Levine of the Universal Health Care Action Network of Ohio, a Columbus-based grass-roots organization pushing for broader health care coverage. “The hospitals believe it’s theirs, and that they should be free to build multiple heart hospitals as revenue-generators and spend millions on CEO compensation packages rather than addressing the unmet needs of their communities. They’re crippling people with medical debt while bestowing obscene wealth on their nonprofit CEOs.”

If hospital boards of trustees won’t limit soaring CEO salaries, she said, it’s up to the state attorney general’s office or state or federal legislators to take action.

via Officials at nonprofit hospitals say experience, competition key to pay.

Since the hospitals also receive federal dollars in the form of medicare payments and grants for research and other services, taxpayers should be able to have some say on executive compensation. It’s time to impose new restrictions on salaries at all companies that receive tax dollars and breaks. If you want to be a robber baron, do it with your own money.

There has to be some risk taken to deserve such returns- and I’ve yet to see a CEO be held accountable. It’s time we got our money’s worth, and gouging for stitches has to stop.

Either that, or it’s time to pay taxes like everyone else.

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