I was sent an
important piece of information by one of my senior colleagues and when I went
through it, it made sense. Even in India, in the so-called trust “not for
profit” hospitals, the main take away is by the top ranking two or three
non-medical executives including the marketing team distributing pay offs.
Can’t doctors run
hospitals? They had been running them all these years.
Why do we need marketing
departments in established hospitals to entice patients? If hospitals deliver the best care, patients will come of
their own. A word-of-mouth referral from your current patients is the most
effective marketing tool for hospitals and doctors. Why do branded
hospitals need to market themselves?
A
retrospective observational study published in JAMA Internal Medicine in January 2014 had characterized the
compensation of Chief Executive Officers (CEOs) at nonprofit US Hospitals and
examine its association with quality metrics. The study concluded that CEO
compensation at nonprofit US hospitals varies widely and CEOs of hospitals who
had greater use of advanced technology and higher patient satisfaction had more
compensation (pay). But no association was found between the CEO compensation
and the quality of care delivered, patient outcomes, or community benefit.
The rising cost of
healthcare in India is a concern.
As per a
recently published research paper based on cross-sectional analysis of National
Sample Survey Office (NSSO) data, 55 million Indians were pushed into poverty
in a single year because of having to fund their own healthcare, and out of
this, 38 million fell below the poverty line due to spending on medicines alone
(Press Information Bureau, July 31, 2018)
Even in the US,
families who are working hard to get ahead now pay nearly $20,000 per year in
insurance premiums, deductibles and out-of-pocket costs for healthcare.
But these so-called
“non-profit” hospitals and their CEOs are getting richer while the people are
getting healthcare poorer.
Affordable care can
become more affordable, if the cost of marketing and managing the hospitals can
be passed on to the patients.
A new report “Investigating the Top 82 U.S. Non-Profit
Hospitals, Quantifying Government Payments and Financial Assets”
specifically looked at large non-profits organized as charities under IRS
Section 501(c)3 with the mission of delivering affordable healthcare to their
communities. They found that these hospitals add billions of dollars annually
to their bottom line, lavishly compensate their CEOs, and spend millions of
dollars, which are generated by patient fees, lobbying government to defend the
status quo.
The executive
compensation showed that 13 organizations paid their top earner between $5
million and $21.6 million; 61 organizations paid their top executive between $1
million and $5 million and only 8 organizations paid their top earner less than
$1 million (which proves it’s possible).
Collectively, $297.5
million in cash compensation flowed to the top paid executive at each of the 82
hospitals. They found pay outs as high as $10 million, $18 million and
even $21.6 million per CEO or other top-paid employee.
Banner Health paid out
$34 million to just two executives. The president of Banner made $21.6 million
and an executive vice-president made $12.4 million.
Consider Former CEO at
Memorial Hermann in Houston, Texas made $18.6 million. In St. Louis, Missouri,
the chief at Ascension Health made $13.6 million; the CEO at the Kaiser
Foundation in Oakland, California made $10.7 million; and $10.6 million went to
the top paid executive of Northwestern Memorial HealthCare in Chicago,
Illinois.
When summing the last four years of pay (2013-2017), each of these highly compensated executives - who made more than $10 million in 2017 alone - earned an extraordinary amount of compensation: Ascension CEO ($59.1 million); Kaiser CEO ($29.8 million); Banner CEO ($29.6 million); Advocate Health CEO, based in Downers Grove, Illinois ($27.8 million); Memorial Hermann Special Advisor/CEO ($27.3 million); and Northwestern Memorial COO ($15.3 million).
Even after paying lavish salaries, these non-profit hospitals had enough left over to add nearly $40 billion to their bottom-line.
Dr KK Aggarwal
Padma Shri Awardee
President Elect Confederation of
Medical Associations in Asia and Oceania
(CMAAO)
Group Editor-in-Chief IJCP Publications
President Heart Care Foundation of
India
Past National President
IMA
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