On July 12, 2017

Mullin endorses salary disclosure for hospital administrators

By Erin Mansfield, VTDigger

The new chair of the Green Mountain Care Board says hospitals should disclose administrator salaries as part of their annual budget review. Kevin Mullin, who became chair in May, endorsed administrative salary disclosure after a member of the public brought the issue up at a meeting on June 22.
The board’s main duties are to regulate hospital budgets and health insurance premiums. Since being established in 2011, the board has not looked at salaries of hospital administrators as part of the regulatory process.
Ken Libertoff, a mental health advocate, said at the meeting that he has advocated in the past for the Green Mountain Care Board to publish hospital administrator salaries, but was unsuccessful.
“I have said for three or four years that one of the elements of cost in health care — which almost everybody says is not sustainable — is the fact that administrative costs are an element that is substantial, and never gets public disclosure,” Libertoff said.
He said the board, which is now regulating new health care reform companies called accountable care organizations (ACOs), has another opportunity to have both hospitals and ACOs disclose the salaries of their top 15 administrators.
“Why not have a different level of transparency and show people that as part of the reform effort … ‘We’re going to take a look at what administrative costs should be in the state of Vermont,’” Libertoff said. “It’s no great secret that I think that the cost is outrageous in administrative costs in hospitals but it doesn’t mean that I’m right or that the hospitals are wrong, but by having public sunshine on the issue, there can be a debate,” he added.
Mullin told Libertoff that administrator salaries should be disclosed to the public in the same way that the salaries of local government workers are disclosed to the public.
“I’m sure that the lawyers will hit me on the back of the head, but I agree with you,” Mullin said. “Everybody gets their municipal reports and they know the exact salaries of all the teachers. They know the exact salaries of everyone working for public works. I for one want to see that information, so I’m sure I’ll find out a little bit later today why I’m not going to.”
Because all of Vermont’s hospitals are nonprofits, they submit to the Internal Revenue Service the compensation of their top executives as part of their annual tax return, called a Form 990. However, the most recent tax returns are usually a couple of years old.
In 2014, the most recent year for which data is available, the average CEO in a Vermont hospital made about $548,000 per year — including salary, bonuses, and benefits, according to a VTDigger analysis.
In the same year, the 40 highest-paid administrators in the state made between $472,000 and $1.7 million. In 2013, the salaries of the 40 highest-paid administrators ranged between $391,000 and $1.9 million.
Boards of directors at Vermont hospitals say they set CEO pay using national benchmarks, and the CEO in turn sets the pay of the other administrators.

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