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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

#91

Post by csharpminor »

avalys wrote: post #82
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 Mar…

I like this as a more precise back-of-the napkin method than what I articulated. I’m not up-to-date with GM and Barra’s tenure.

What I can say is that I’ve personally seen bad leadership teams cost employees much more than $180/year. As a board, it’s hard to look at that prospect and and go cheap on someone with the potential to destroy or create that much wealth.

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

#92

Post by LordDragonfang »

prasadjoglekar wrote: post #58
s1artibartfast wrote: post #16

Earlier quoted context omitted.

>It’s a non-profit largely funded by tax payers. Is it actually government funded, or does it sell services which the government pays for? I dont know if it is Baader–Meinhof phenomenon, but it seems like I increasingly see funded used to describe revenue for services rendered. It seems like a bit of a bait and switch, because the word funded often carries come connotation of ownership, obligation, or charity.

Both. The govt gives them a break on taxes. They also pay the hospital thru Medicare and Medicaid.

I'm not sure the latter holds. That's like saying grocery stores are "government funded" because they take food stamps - or for that matter, that private retirement homes are "government funded" because the retirees get their income from Social Security.

And for that matter, the former definitely doesn't hold, because nearly every entity gets some tax break. Every homeowner is "government funded".

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

#93

Post by conradev »

Escapado wrote: post #80
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 don’t adjust salary for what proportions people manage or are responsible for in a lot of other fields, at least not to the same extend. And especially if we would go by responsibility. I earn about 3 times as much as the average school teacher in my home town and about 4 times as much as the people driving the buses there while I sit in front of my screen and fix irrelevant css bugs or spin up the next semi-usefu…

I think it is a misunderstanding that the job market is optimizing for fairness: it is not.

Executive pay is supply and demand. The mayor is being paid $450k because a person with the necessary skills was willing to take that salary (after fighting off opponents) to become mayor. Mayor comes with prestige, so more people want to be mayor, and $450k is not a terrible incentive to go after. If the government paid $80k a year, no one would become mayor. If they paid $1m a year, too many qualified people might be interested, or – the right people might become interested.

Imagine you’re a CEO who successfully ran and sold a business for $250m. You now have at least $25m. Why would you ever want to work an intense job again? Being CEO is exhausting.

Executives are paid a lot of money because they’ve already made a lot of money: if you want to incentivize them there has to actually be something at stake.

That said, these decisions are usually made by a board, which is small and has limited knowledge.

There is plenty of room for them to miscalibrate, too, but paying too much for an executive is bad business. Paying too little is, too.

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

#94

Post by s1artibartfast »

prasadjoglekar wrote: post #58
s1artibartfast wrote: post #16

Earlier quoted context omitted.

>It’s a non-profit largely funded by tax payers. Is it actually government funded, or does it sell services which the government pays for? I dont know if it is Baader–Meinhof phenomenon, but it seems like I increasingly see funded used to describe revenue for services rendered. It seems like a bit of a bait and switch, because the word funded often carries come connotation of ownership, obligation, or charity.

Both. The govt gives them a break on taxes. They also pay the hospital thru Medicare and Medicaid.

I wouldn't call either of those funding in the sense I described.

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

#95

Post by ughitsaaron »

This reminds me of an investigation by the Times from September 2022 into Providence health system’s training of employees, with the aid of McKinsey, to “[wring] money out of patients — even those who were supposed to receive free care because of their low income.” https://www.nytimes.com/2022/09/24/business/nonprofit-hospit...

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

#96

Post by csharpminor »

lesuorac wrote: post #67
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…

> Shaming organizations into lowering exec comp probably won’t work: there’s a strong economic incentive to pay competitively. Well I think you're right on the first half but I don't think you're correct on the second half. Paying a CEO 5M vs 17M is a rounding error to a double-digit billion dollar company. Its like getting something on Amazon instead of Alibaba, sure Amazon is 3x the price but you obviously find the…

I’m not sure I understand you, I believe we’re making the same point? I mean that there’s a strong incentive to offer competitive pay (as in pay more e.g. to poach from a competing company).

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

#97

Post by lozenge »

prasadjoglekar wrote: post #58
s1artibartfast wrote: post #16

Earlier quoted context omitted.

>It’s a non-profit largely funded by tax payers. Is it actually government funded, or does it sell services which the government pays for? I dont know if it is Baader–Meinhof phenomenon, but it seems like I increasingly see funded used to describe revenue for services rendered. It seems like a bit of a bait and switch, because the word funded often carries come connotation of ownership, obligation, or charity.

Both. The govt gives them a break on taxes. They also pay the hospital thru Medicare and Medicaid.

Isn't the Medicare payment less than the hospital gets giving the same treatment to somebody with private health insurance?

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

#98

Post by s1artibartfast »

felipemnoa wrote: post #23
s1artibartfast wrote: post #16

Earlier quoted context omitted.

>It’s a non-profit largely funded by tax payers. Is it actually government funded, or does it sell services which the government pays for? I dont know if it is Baader–Meinhof phenomenon, but it seems like I increasingly see funded used to describe revenue for services rendered. It seems like a bit of a bait and switch, because the word funded often carries come connotation of ownership, obligation, or charity.

>>Is it actually government funded, Maybe indirectly. As a charity they get lots of benefits that allows them to save money.

Not taxing money =/= giving money.

Some of the impacts are identical, but they have other fundamental differences.

I pay less than 100% tax, but I wouldn't say that the government is funding my lifestyle

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

#99

Post by bumby »

jonathan-adly wrote: post #68
harimau777 wrote: post #55

Earlier quoted context omitted.

Disclaimer at the start: I'm asking this because I want to understand more about the situation that you are presenting, not as an indirect way to "um actually" you. How would margins be defining in this case? When I hear that the margins at gas at a gas station are x%, I understand that they are basically talking about how much I pay per gallon minus how much the gas station paid per gallon. However, it feels like de…

Here are 2 relevant scenarios. A homeless alcoholic withdraws and gets seizures, spending a week in the ICU. He is not on Medicaid, but qualifies. After paying for all his care and applying for Medicaid on his behalf. The hospital might get 50 cents back for every dollar they spent. (They spent on doctors; nurses, medications; EMR bill, case management, etc.). This guy will essentially come back 5-6 times per year. W…

Are you saying medicare/medicaide are net-negative? Is so, what prevents hospitals from refusing to accept them?

I suspect they don't because it's not financially solvent to do so, given the number of patients who use those services. That on it's face seems to bring into question the claim that they are net-negative (whether that's due to legislation or other means).

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

#100

Post by gniv »

harimau777 wrote: post #55
jonathan-adly wrote: post #7

The article is a bit misleading in that it uses revenue. Typical margins in a health-system is slim. 3-6%. So, actual 1-2% charity care of revenue is quite significant. The thesis is correct that a health-system CEO shouldn’t make $17m/yr. It’s a non-profit largely funded by tax payers and maintains its market share by government regulations. Just the charity care component is a bit misleading.

Disclaimer at the start: I'm asking this because I want to understand more about the situation that you are presenting, not as an indirect way to "um actually" you. How would margins be defining in this case? When I hear that the margins at gas at a gas station are x%, I understand that they are basically talking about how much I pay per gallon minus how much the gas station paid per gallon. However, it feels like de…

I think you are right to be suspicious. For example, back when I lived in the US and went for a checkup at a big hospital in NY: first there were greeters at the entrance of the building, then a greeter on the right floor, then a small army of receptionists, then a nurse, then a PA, then the doctor. All these are expenses. Are they necessary? Here in France there is, maybe, a receptionist that sends me to the office where the doctor does everything, including billing. (Frankly, both ways seem a bit extreme.)
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