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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

#101

Post by ceejayoz »

conradev wrote: post #93
Escapado wrote: post #80

Earlier quoted context omitted.

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…

> If the government paid $80k a year, no one would become mayor.

I very much doubt this. New Hampshire legislators get $100/year, since 1889. Still plenty interested in the job.

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

#102

Post by parineum »

spiderice wrote: post #62
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…

This all may be true, but it doesn't change the fact that I have no interest in donating my money to an organization that is going to give a sizable chunk of it to some rich CEO rather than the people that I'm trying to donate to.

Sounds like some pretty solid market effects.

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

#103

Post by Jensson »

conradev wrote: post #93
Escapado wrote: post #80

Earlier quoted context omitted.

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…

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

The board is usually made up of other executives or former executives. This group sets each others salaries unlike all other professional categories.

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

#104

Post by csharpminor »

hliyan wrote: post #83
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.

I agree with you. I’m not sure what the enforcement mechanism would be though. Boards suing CEOs more frequently over negligence? CEOs buying a certain amount of equity in a company before they join?

CEOs are highly leveraged. One wrong bet could cost the company/employees/shareholders more than a CEO (even a multi-millionaire) could repay.

In reality this leaves the board with recouping maybe a few million from the CEO on a shortfall that may be orders of magnitude bigger. I think pragmatically most boards just move on, let the CEO take the reputations hit, and focus on trying to find someone better.

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

#105

Post by parineum »

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.

I think we should have withheld the theory of relativity because it eventually led to weapons of mass destruction. At least pending a vote of electing Einstein to be a scientist and a subsequent vote on publishing the theory.

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

#106

Post by vkou »

conradev wrote: post #93
Escapado wrote: post #80

Earlier quoted context omitted.

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…

If executive pay is supply and demand, and has risen stratospherically over the past 40 years, why has the supply of executives failed to meet demand for them? Are we not sending enough people to MBA school? Is there a funnel problem in our educational system? Do we need to open up more opportunities for skilled immigrants to work here in executive roles?

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

#107

Post by arcbyte »

bumby wrote: post #99
jonathan-adly wrote: post #68

Earlier quoted context omitted.

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).

Hospitals are required by EMTALA[1] to treat all emergencu patients to the point of stabilization. So it only makes sense to charge whatever insurance is available because there is no turning them away. Im not sure if there are regulations applicable to hospitals that prevent them from refusing to accept medicaid patients for elective procedures. Certaibly there are lots of surgery centers that do refuse medicaid. Also lots of doctors dont take medicaid/medicare. Its within their right to do so.

[1]: https://en.m.wikipedia.org/wiki/Emergency_Medical_Treatment_...

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

#108

Post by TrinaryWorksToo »

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…

Odd, when I complain that my salary should be higher because of the impact the work I do makes, they don't raise my salary.

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

#109

Post by gniv »

bumby wrote: post #99
jonathan-adly wrote: post #68

Earlier quoted context omitted.

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).

At least on paper they are net-negative. If you look at a Schedule H of IRS Form 990 they report huge shortfalls from Medicare/Medicaid. This I think helps them claim "community benefit expense".

Example Form 990 (search inside for Schedule H): https://my.clevelandclinic.org/-/scassets/files/org/about/fi...

See also page 8 of this pdf: https://www.aha.org/system/files/media/file/2023/10/Results-...

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

#110

Post by avalys »

csharpminor wrote: post #91
avalys wrote: post #82

Earlier quoted context omitted.

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.

That's a great way to look at it as well.
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