“Healthy Wallets” was the lead story on the business page of the June 2 Post-Dispatch. These healthy wallets belong to the CEOs of health care conglomerates operating in the St. Louis region. Across the page below the headline are the pleasantly smiling faces of Steven Lipstein, CEO of BJC Healthcare, William Thompson of SSM Health Care, and Anthony Tersigni of Ascension Health Alliance. Also in the lineup is Lynn Britton of Mercy Health. He’s not smiling. He appears to have been photographed while making a speech.
Mr. Lipstein’s compensation package increased from $2.3 million to $3.3 million between 2010 and 2011, a 40% raise. Mr. Thompson went from $1.8 million in 2010 to $2.3 million in 2011, for 26%, while Mr. Tersigni went from $3.6 million to $4.0 million, for 12%. Maybe Mr. Britton wasn’t giving a speech. Maybe he was complaining about his puny salary. He only went from $1.9 million to $2.2 million. Not only was he the lowest paid of the four, but Mercy Health operates 32 hospitals, compared to only 13 for BJC and 18 for SSM. Based on that criteria, Mr. Tersigni might have a complaint of his own. His company, a for-profit, operates 80 hospitals and he barely makes more than Mr. Britton.
The Post Dispatch article also draws a comparison with the compensation package for Katherine Sebelius, secretary of the U.S. Department of Health and Human Services. Her salary in 2011 was $199,700, plus health and retirement benefits. The budget of her agency is $874 billion. That’s with a “b.” Now there’s a lady with a legitimate beef.
Thomas Getzen, executive director of the International Health Economics Association, said, “An argument can be made that an innovative health care CEO is as valuable as a college basketball coach.” Don’t get me started on how much sports figures are getting paid. Getzen continues, “For me, the big problem, whether it’s a for-profit or nonprofit, is when executives start chasing their own compensation rather than the good of the company. We’ve seen that in banking and that can happen in health care.” Not to worry, Mr. Getzen. William Thompson of SSM sets our minds at ease. “I’m not in this job because of the salary,” he says.
The chief argument made for these hefty salaries is that the competition for top executive talent is fierce. You have to pay top dollar to get top leadership, according to Cynthia Mercer, senior vice president for human resources at Mercy Health. I guess SSM missed the boat when they brought Mr. Thompson on board. Since he isn’t interested in money, they could have gotten him a lot cheaper. But wait a minute. Mr. Thompson wasn’t finished. He concluded, “Salaries and benefits for non-profit health executives need to be competitive if we are going to be able to attract the talent needed to run these very complex organizations.” Which way is it, Mr. Thompson?
Mercy Health gets special attention in the Post Dispatch article. This not-for-profit conglomerate, founded and sponsored by (irony of ironies) the Sisters of Mercy religious order, paid out $3.4 million in retirement benefits in 2011 to senior vice president Myra Aubuchon as she left the organization. Mercy executives travel in the System’s corporate jet. Mercy also pays for spouses of executives to accompany them on trips and pays for country club and social dues. Its board members and executives hold annual retreats in Dublin, Ireland (accompanied by spouses, I assume) to commemorate where the Sisters of Mercy began. Isn’t that quaint?
Am I imagining it, or is there something fundamentaly wrong with our health care system when not-for-profit agencies like SSM and Mercy, founded by nuns, are paying out multi-millions to executive types riding around in corporate jets with money received from our taxes through Medicare, Medicaid and other federal and state subsidies, and from private insurance companies charging $400 per month for a policy with a $5,000 deductible to struggling small business people like my wife?
We say guys like Thompson and Lipstein are “worth” millions. We seem to have put a monetary value on people’s worth. So let’s do a calculation. Let’s say a nurse, let’s call her Angela, working at Barnes-Jewish is making $40,000 per year. Does that mean that Mr. Lipstein, at $3.3 million, is worth 82.5 times as much as Angela? The patients she cares for would beg to differ.
Unlike other countries, Obamacare keeps us paying those high-priced executives. This is because, instead of paying directly to the doctor, or hospital, Obamacare requires that we go through an insurance company. The insurance company is allowed to make up to a 20% profit on what we pay them. Obama is the best salesman the insurance companies ever had. He is giving them billions! Why not just bypass the insurance companies and put everyone on Medicade similar to what other countries do? Are our politician-salespersons for the insurance industry getting “commissions?”
Also, you may not be able to use your own doctor, because different plans (insurance companies) have different networks and providers. Your doctor may not be on their list.