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Nonprofit hospitals skimp on charity while CEOs reap millions, report finds

arstechnica.com

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Re: Nonprofit hospitals skimp on charity while CEOs reap millions, report finds

#81

Post by magicalist »

csharpminor wrote: post #59

CEO salaries should be understood in relationship to the resources that they control. For example, this CEO chose to spend $85M on travel nurses to counter the union strike happening at a hospital in their network. Presumably the CEO thinks that this gamble is worth it in forcing the union’s hand. That may be a terrible decision, but it shows the extent of resources a CEO of a $6bn organization commands. This is one…

> That may be a terrible decision, but it shows the extent of resources a CEO of a $6bn organization commands. This is one choice out of tens to hundreds of 8-figure choices that this “super manager” will make in a year.

This argument sounds a lot like it doesn't matter what decisions they make as long as they're in charge of a lot of capital.

> If you’re on the board of an organization like that, settling for a second-best CEO to save a 7-figure sum just doesn’t make sense.

If this is the only thing checking bad decisions, we have to consider that when there's a little oligarchy of buddies controlling an immense concentration of capital deciding each other's compensation, there are different market forces at work.

Re: Nonprofit hospitals skimp on charity while CEOs reap millions, report finds

#82

Post by avalys »

csharpminor wrote: post #59

CEO salaries should be understood in relationship to the resources that they control. For example, this CEO chose to spend $85M on travel nurses to counter the union strike happening at a hospital in their network. Presumably the CEO thinks that this gamble is worth it in forcing the union’s hand. That may be a terrible decision, but it shows the extent of resources a CEO of a $6bn organization commands. This is one…

I like to consider CEO salaries by the amount they’re getting paid, per employee in the company.

There was a bunch of complaining recently about GM CEO Mary Barra, whose annual compensation is around $30M. GM has around 167,000 employees, so this corresponds to about $180 per employee.

The average employee compensation at GM is around $100,000 per year.

I wonder, did each employee get more than $180 of value from Mary Barra’s leadership?

Re: Nonprofit hospitals skimp on charity while CEOs reap millions, report finds

#83

Post by hliyan »

csharpminor wrote: post #59

CEO salaries should be understood in relationship to the resources that they control. For example, this CEO chose to spend $85M on travel nurses to counter the union strike happening at a hospital in their network. Presumably the CEO thinks that this gamble is worth it in forcing the union’s hand. That may be a terrible decision, but it shows the extent of resources a CEO of a $6bn organization commands. This is one…

If we measure a leader's potential value by their potential impact/damage radius, then it follows that their actual pay should be proportional to the actual impact/damage they cause. The problem here is that leaders seem to be compensated in proportion to their impact, but not penalised in proportion to their damage, even when their success is indistinguishable from chance.

Re: Nonprofit hospitals skimp on charity while CEOs reap millions, report finds

#84

Post by gniv »

nonameiguess wrote: post #66
csharpminor wrote: post #59

CEO salaries should be understood in relationship to the resources that they control. For example, this CEO chose to spend $85M on travel nurses to counter the union strike happening at a hospital in their network. Presumably the CEO thinks that this gamble is worth it in forcing the union’s hand. That may be a terrible decision, but it shows the extent of resources a CEO of a $6bn organization commands. This is one…

Frankly, I think this sort of thinking is wrong almost all of the time. I understand why hiring boards feel they have no choice, but the reality is, outside of maybe 15 people from the past century, there are no clear number ones and number twos. Talent ranking just isn't that accurate. Pro sports has exactly the same problem. If you happen to actually get a LeBron James or Shohei Ohtani, then yeah, they absolutely d…

I think in this context second-best CEO is euphemism for crook. Having those could be a multi-billion dollar liability.

Re: Nonprofit hospitals skimp on charity while CEOs reap millions, report finds

#85

Post by carlosjobim »

a_cardboard_box wrote: post #69
csharpminor wrote: post #59

CEO salaries should be understood in relationship to the resources that they control. For example, this CEO chose to spend $85M on travel nurses to counter the union strike happening at a hospital in their network. Presumably the CEO thinks that this gamble is worth it in forcing the union’s hand. That may be a terrible decision, but it shows the extent of resources a CEO of a $6bn organization commands. This is one…

We shouldn't have unelected individuals making choices that have such a high impact on society in the first place. You've detailed the mechanisms behind their high pay, but that is far from justifying it.

The CEO is elected by the board and the board is elected by the shareholders.

Re: Nonprofit hospitals skimp on charity while CEOs reap millions, report finds

#86

Post by smolder »

Aurornis wrote: post #60
Workaccount2 wrote: post #5

Hospitals are all non-profit so they can reap tax benefits. In order to avoid profit but still maintain growth, they shovel all their profits into network expansion. New hospitals, clinics, outpatient centers, wellness centers, all that in order to avoid lowering costs for patients. This is why it seems each locale is packed with care all from one central hospital. They have to keep growing to maintain "non-profit" s…

> In order to avoid profit but still maintain growth, they shovel all their profits into network expansion. New hospitals, clinics, outpatient centers, wellness centers, all that in order to avoid lowering costs for patients. Expanding operations reduces scarcity. More clinics reduces wait times and puts downward pressure on prices. Supply and demand. I don't even understand what you're arguing for. Do you want them…

> I don't even understand what you're arguing for.

I don't really think they were arguing for anything, but there's a clue what they'd argue for right there in the bit you quoted

"lowering costs for patients"

Re: Nonprofit hospitals skimp on charity while CEOs reap millions, report finds

#87

Post by coderintherye »

csharpminor wrote: post #59

CEO salaries should be understood in relationship to the resources that they control. For example, this CEO chose to spend $85M on travel nurses to counter the union strike happening at a hospital in their network. Presumably the CEO thinks that this gamble is worth it in forcing the union’s hand. That may be a terrible decision, but it shows the extent of resources a CEO of a $6bn organization commands. This is one…

>If you’re on the board of an organization like that, settling for a second-best CEO to save a 7-figure sum just doesn’t make sense.

You're falsely associating higher pay with performance, when oftentimes they can be inversely correlated.

https://www.wsj.com/public/resources/documents/CEOperformanc...

https://www.gsb.stanford.edu/insights/when-ceos-are-paid-bad...

https://www.epi.org/blog/ceo-pay-still-not-related-to-perfor...

Re: Nonprofit hospitals skimp on charity while CEOs reap millions, report finds

#88

Post by AlbertCory »

Attempting to analyze hospitals in particular, or healthcare in general, as if they were "normal" businesses is a fool's errand. "Who pays?" and "who benefits?" are hopelessly complicated. And corrupt.

As for the CEO salary: it's probably shaped by competition for those few slick operators who really understand how to milk the system.

Re: Nonprofit hospitals skimp on charity while CEOs reap millions, report finds

#89

Post by 6510 »

anon291 wrote: post #30
cowmix wrote: post #3

FWIW.. my mother's childhood friend is a nun who (successfully) ran a hospital in the Buffalo NY area for years up until the late 90s/early 2000s. She was replaced by a series of "civilian" CEOs after that. AFAIK, the quality of care OR the finances of the place didn't improve one iota.

This is exactly it. Many charity hospitals were started by religious orders sworn to poverty. Things change the moment the laity step in. Lay ceos want to make money. Nuns cannot.

IIRC there was a phase in between with a hierarchy based on salaries. Surgeons were in charge. They created a salary scale above filled with people who know nothing about healthcare. Not to forget about investors in stead of public funds and donations.

Re: Nonprofit hospitals skimp on charity while CEOs reap millions, report finds

#90

Post by vsareto »

ww520 wrote: post #9

Aren’t hospitals being nonprofit just in name only? They do it for tax purpose, not for charity.

There is a not-for-profit designation as well, which has different requirements, and hospitals can be either of those or for-profit (and probably more)
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