Health care CEOs made $2.6 billion in 2018

https://www.axios.com/newsletters/axios-vitals-3dafd3d8-dd1c-47ed-a1f0-287e7f37fc6f.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosvitals&stream=top

https://docs.google.com/spreadsheets/d/1AY1nXwBnQVlata0RgdLz17OI4XaK6785hfAsiLFz84U/edit#gid=0

Illustration of George Washington with a stethoscope around his neck.

The CEOs of 177 health care companies collectively made $2.6 billion in 2018 — roughly $700 million more than what the National Institutes of Health spent researching Alzheimer’s disease last year, according to a new Axios analysis of financial filings.

Why it matters: The pay packages reveal the health care system’s real incentives: finding ways to boost revenue and stock value by raising prices, filling more hospital beds, and selling more drugs and devices, Axios’ Bob Herman reports.

By the numbers: The median pay of a health care CEO in 2018 was $7.7 million. Fourteen CEOs made more than $46 million each.

  • The figures were calculated by using actual realized gains of stock options and awards, which are in the annual proxy disclosures companies file with the Securities and Exchange Commission.

The highest-paid health care CEO last year was Regeneron Pharmaceuticals CEO Leonard Schleifer, who made $118 million. A spokesperson said Schleifer “has built Regeneron from a start-up into a leading innovative biopharmaceutical company” and that he “generally holds his option awards until nearly the end of the full 10-year option term.”

  • Pharmaceutical CEOs represented 11 of the 25 highest compensation amounts last year.
  • Executives of medical device and equipment companies that don’t attract as much attention — such as Intuitive Surgical, Masimo, Hill-Rom and Exact Sciences — also were sitting at the top.

Between the lines: A vast majority of CEO pay comes from exercised and vested shares of stock. Salaries are almost an afterthought.

  • But health care executives routinely earned millions of dollars in cash bonuses, based on factors like revenue goals and financial metrics that experts say can be manipulated.
  • Quality of care is either not a factor at all in CEOs’ bonuses at all, or a marginal one.

Details: McKesson CEO John Hammergren received a $4 million bonus for hitting financial targets last year, just as the company was facing a slew of lawsuits over its role in the opioid crisis. McKesson did not immediately respond to questions.

  • Community Health Systems CEO Wayne Smith recorded a $3.3 million bonus even though his hospital chain continued to hemorrhage money. His bonus was heavily weighted by an adjusted metric that made CHS look profitable, and none of his bonus was tied to patient outcomes. CHS did not respond.

Worth noting: The analysis does not include compensation from not-for-profit hospital systems, because their 2018 tax filings have not been released yet.

 

 

 

Amid labor talks, union unveils billboards highlighting Cedars-Sinai profits, CEO pay

https://www.beckershospitalreview.com/human-capital-and-risk/amid-labor-talks-union-unveils-billboards-highlighting-cedars-sinai-profits-ceo-pay.html

Image result for SEIU-UHW cedar sinai medical center billboards

Healthcare workers at Los Angeles-based Cedars-Sinai Medical Center revealed a series of billboards that highlights profits and CEO pay at the hospital.  

The workers, who are represented by Service Employees International Union-United Healthcare Workers West, announced the billboards April 2 amid contract negotiations. The billboards are scheduled to appear throughout April at seven locations that are all within 1.5 miles of the hospital.

A union news release says the billboards aim to draw attention to “excessive profits and CEO compensation,” as well as the amount of charity care the nonprofit hospital provides.

“The public deserves to know that this elite hospital with huge profits and obscene CEO compensation, isn’t acting in the public’s best interests,” Dave Regan, president of SEIU-UHW, said in the release. “On top of paying no income or property taxes, Cedars-Sinai skimps when it comes time to care for the poorest people in our community.”

The hospital  addressed the union’s claims.

“The Cedars-Sinai Board of Directors believes in providing every one of our employees with compensation that is based upon merit of their individual performance, a rigorous review of each position’s responsibilities, and comparisons with other organizations for positions with similar responsibilities. For the president and CEO, the review process is even more extensive,” the statement said.

“[CEO]Tom Priselac’s compensation appropriately reflects his more than two-decade tenure of successfully presiding over the western United States’ largest nonprofit hospital. Under his leadership, Cedars-Sinai has earned national recognition for delivering the highest quality care to patients and has been ranked among the top medical centers in the country.

“Over the last 10 years alone, Cedars-Sinai has invested nearly $6 billion to benefit the local community by, among other things, providing free or part-pay care for patients who cannot afford treatment; by losses caring for Medicare and Medi-Cal patients; and by providing a wide range of free health programs and clinics in neighborhoods as well as education, health and fitness services in dozens of local schools.”

SEIU-UHW represents more than 1,800 service and technical workers at the hospital. The last contract with Cedars-Sinai expired March 31.

 

 

 

Former Aetna CEO on being a “radical capitalist” and the current state of health care

https://finance.yahoo.com/video/former-aetna-ceo-being-radical-164919638.html?utm_source=Sailthru&utm_medium=email&utm_campaign=Issue:%202019-03-20%20Healthcare%20Dive%20%5Bissue:19979%5D&utm_term=Healthcare%20Dive

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Former Aetna CEO Mark Bertolini spent 8 years as company head until 2018 when the insurance giant was sold to CVS. He joins Yahoo Finance’s Adam Shapiro, Julie Hyman, and Julia La Roche to discuss his new memoir “Mission-Driving Leadership: My Journey As A Radical Capitalist.”

 

 

 

 

Steven Brill breaks down how much top hospital CEOs make per patient stay

http://www.healthcarefinancenews.com/news/steven-brill-breaks-down-how-much-top-hospital-ceos-make-patient-stay

Hospital CEOs netting even just a few dollars in earnings per patient day often haul in considerable salaries, lawyer and journalist Steven Brill claims in new research published in Axios on Tuesday.

To examine the relationship between patient days and executive salary, Brill merged American Hospital Directory data about hospital operations, including patient beds and total patient days,  with IRS information on what nonprofit hospitals pay their top brass.

The result is a list of the reported annual payouts to the CEOs of the 20 largest hospital systems, ranked by the number of hospitals in the system, divided by the annual number of patient days recorded at each hospital.

In other words, the research shows how much these CEOs got paid for each day a person spends in their hospital.

http://www.healthcarefinancenews.com/news/physician-leadership-compensation-outpaces-ceo-pay-survey-finds