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Amy Umble is health reporter for The Free Lance-Star

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Another look at MWHC’s salaries

Mary Washington Hospital

The recent blog post and story about the salaries paid to Mary Washington Healthcare executives generated a lot of comment and mail. Several readers asked that the salaries be placed in context by comparing them to the salaries paid to the top executives of other hospital chains.

I had thought of doing that prior to publication but soon realized that it was not as easy as it sounds. Guidestar.org, a nonprofit web site, is a good source for 990 information, but the site did not have the 2009 filings.

Also, which hospitals are comparable to Mary Washington? Do you use Sentara, the Tidewater chain with eight hospitals, including Potomac in Woodbridge? Or perhaps Inova, the Northern Virginia chain with five hospitals?

It seemed to me that Centra Health and Valley Health, two nonprofit systems in central Virginia, made better comparisons. I contacted both companies and asked for their 990s for 2009. Valley supplied theirs, and Centra asked me to wait since they were filing an amended return. Last week they sent a copy of their return.

Centra Health is a three-hospital chain based in Lynchburg that includes Lynchburg General, Virginia Baptist and Southside Community. Total number of beds for the three hospitals is 627. Revenues in 2009 were $535 million.

Valley Health is a four-hospital chain based in Winchester. Winchester Medical Center is its flagship hospital. Other hospitals in the chain include Page Memorial, Shenandoah Memorial and Warren Memorial. The total number of beds in the chain is 537. Revenues in 2009 were $539 million.

Mary Washington is a two-hospital chain, Mary Washington and Stafford. Total number of beds is 512. Revenues in 2009 were $666 million.

As you can see from the charts below, Fred Rankin, president and CEO of Mary Washington, earns more in total compensation than the other two chief executives. His company has fewer hospitals and fewer beds than the others, but it generates more revenue. Rankin received a large bonus is 2009. The other chief executives did not.

As for the assistants, it’s hard to make comparisons because it’s not clear what each of them does. Even so, the salaries are close. The three chief financial officers, for example, earned $497,000, $457,000 and $437,000 in 2009.

Centra Health    
Name Title Compensation
George Dawson President, chief executive officer $747,281
Dr. Chalmers Nunn Senior v.p., chief medical officer $499,351
Lewis Addison Senior v.p., chief financial officer $496,712
Thomas Jividen Executive v.p. $492,569
E.W. Tibbs Senior v.p., operations $423,162
 

Valley Health

 
Name Title Compensation
Mark Merrill President, chief executive officer, Valley Health   $836,912*
Alfred Pilong Pres., Winchester Med. Center; senior v.p., Valley Health $479,585
J. Craig Lewis Senior v.p., chief fin. officer, Valley Health $457,192
M. Todd Way Senior v.p., Valley Health $440,057
Dr. Terry Sinclair Vice p., medical staff affairs, Wincester Med. Center  $375,468
 

Mary Washington

 
Name Title Compensation 
Fred Rankin President, chief executive officer $955,282
Walter Kiwall Executive v.p., chief operating officer $501,843
Dr. J. Thomas Ryan Executive v.p., chief medical officer $489,334
Sean Barden Executive v.p., chief financial officer $436,698
Kevin Van Renan Senior v.p., administrator $382,647

* Mark Merrill became president and CEO of Valley Health on June 8, 2009. His compensation on the 990 tax return is $485,409. If he had worked the entire year at the same rate, his compensation would be $836,912, the amount in the table.

(The original story about Mary Washington salaries is here. An earlier blog post is here.)

Permalink: http://news.fredericksburg.com/rapidassessment/2011/01/20/another-look-at-mary-washington-salaries/

  • Larry the G

    these are HUGE salaries in ALL of these communities. Who else in the PUBLIC sector … indeed claimed to be the non-profit public sector makes these size salaries?

  • Kontur

    Who cares what their salaries are? This is America! Good for them if they’re doing well. I’d make that much (happily) if I could, but I don’t- and I’m not whining about it.

  • jlane

    Finally an explanation as to why a tylenol costs nine dollars a pills the mystery is over!

  • Been There, Done That

    Anyone who gripes about these salaries has never walked in the shoes of these executives. They earn EVERY penny of what they make.

  • Larry the G

    you’re right. so prove it. Let’s hear the duties of these folks and how many hours they put in every day and week and what their normal day is like.

    I wonder how willing the hospitals are in releasing their duties?

  • Larry the G

    one way to measure the “worth” of a manager is to associate their salary with the number of people who are directly affected by them.

    So a School Superintendent (for instance) has ultimate responsibility for about 3000 employees (in Spotsy).

    and then the Administrators – like the Director of Instruction would directly affect the work of the 1700 classroom teachers

    The administrator in charge of transportation – the 298 bus drivers…

    etc…

    that’s one way to measure. there are probably other ways but it does give an idea of responsibilities associated with compensation.

  • Been There, Done That

    An executive does not have a “normal” day with repetitive duties like a rank and file employee may have. And the job is not confined to specific hours for a CEO~~it is round the clock, seven days a week. The tax status of the organization is irrelevant to executive pay~~that is a function of attracting and retaining the best talent available, and not-for-profit hospitals compete with for-profit hospitals for these individuals. The only group that can evaluate the performance and determine the adequacy of compensation for the hospital CEO is the board of directors. Everything else is speculation.

  • SO

    The issue I have as a MWHC employee is that an average raise is less than 3%. Outstanding is less than 7%. The way departments are grouped and ran, its virtually impossible to meet their goals %100 and the little folks of MWHC get their bonus check. The first bonus check I got here was around $1800 compared to $75 last year. Mr. Rankin and Staff should not be exempt from the rules, regulations and guidelines that govern the rest of MWHC Associates, their performance appraisal process and monetary rewards. And for Mr. Rankin and upper level management staff to allow and accept this outrageous bonus and raise is nothing short of a slap in the face to all the other 3000 hard working Associates who at best can only earn 6 or 7 % pay increase if they rate outstanding.

  • SO

    And I would like to know why the FreeLance star publishes this information? All it serves to do is incense the worker bees in MWHC. And whether you like it or not, MWHC provides a means of living for a great many people in the Fredericksburg area. I for one would not want procedures done or care given to me or my loved ones when the majority of the clinical staff are pissed off because they are told there isn’t any money, then the paper publishes yearly income, bonuses and raises of the great MWHC leaders. Makes no sense.

  • Bronco

    Jim’s been busy at his computer terminal again – why cant the FLS hire an ambulatory correspondent?

  • Been There, Done That

    “Mr. Rankin and Staff should not be exempt from the rules, regulations and guidelines that govern the rest of MWHC Associates”

    SO, if you are not happy with the pay scale and bonus structure for your position, and feel that you should be compensated in the same fashion as the top executives, then go get your Master’s Degree in Hospital Administration from a top university and then work your way up to the top, paying your dues, the way everyone else did. And incur the responsibilities, the stress and the headaches of those at the top. I daresay you would not feel that you should be compensated in the same way as a housekeeper or kitchen worker or mail clerk at the hospital if you are clinical staff~~but your logic, if it is logical, would dictate that you should be.

  • SO

    Hey Been There, Done that you are totally missing the point, I did not say I was unhappy with my pay scale or bonus structure, but I think I should be govern by the same regulations, guidelines and rules for bonuses and compensation as the upper level execs. My position has accountability, responsibility, stress and more than 40 hours per week. No I’m not an exec, but I’m the only one here that does what I do and I can assure you I do not get the same compensation. Try reading the post the next time instead of sprouting tiresome cliches about top univerisities and paying dues. I’ve known plenty of people who have good paper behind their names only to be total idiots.

  • Been There, Done That

    SO, you clearly do not understand the difference between Indians and Chiefs.

  • Billy der Kind

    Drop the mask Fred!

  • Rufus

    Once we get Obamacare, his bonus should be ten million dollars. We will soon have 45 million new patients, with pre-existing conditions, and the same number of hospitals. The doctors will have lines of patients blocks long. A lot of people will get free care, and the paying customers will make up the difference with triple premiums. It might take a few days to get emergency treatment.
    Congress swore there would be “no illegal aliens” getting Obamacare. What Congress really means is that the illegals will get amnesty first, and then qualify for free Obamacare.

  • http://news.fredericksburg.com/rapidassessment/2010/09/23/new-nursing-home-is-first-in-years/ pooh

    My next door neighbor is a hospital administrator. I have witnessed some of his duties like picking up doctors, nurses, and techs in his 4 wheel drive vehicle in the snow and taking them to work, getting up at 2 AM and going in because a fire alarm went off at the hospital, helping set up tables for a fundraiser, searching for used equipment and grant money, etc. He even knows how to run the hospital laundry.

    This man cares about his patients, employees, and the community he lives in.

  • Arch

    Good morning Fred and Walt. So let’s say the salaries are within reasonableness of being competitive. But in a pay for performance situation, these two have not earned this level of pay. They have created a culture of distrust in many directions, and most often make self serving decisions, regardless of what they promised and to whom. It will take many, many months after these characters leave to turn this ship….too bad for the employees and the community…….

  • Outsider

    Perhaps I missed something in the postings about whether Fred Rankin and his senior executives at MWHC merit their bonuses. It seems that all they have to do is ask the MWHC Board of Trustees to approve their apparently meritless bonuses and it’s a done deal.

    Performance is meritless when pig headed decisions are made that place the future viability of the organization in jeopardy. Performance is meritless when the net operating income of the organization tumbles precipitously due to overspending on unnecessary capital projects that fail to generate net operating income. Performance is meritless when the work force is sufficiently displeased with management to cause unsatisfactory, even endangering, patient care as an unintended consequence.

    Unless I am mistaken, MWHC employees who are not managers earn pay raises and other incentives based upon demonstrated performance under a system identifying standards of performance. They are not financially rewarded for poor or marginal performance.

    A different standard appears to be in place for Fred Rankin and his senior executives . . . membership in MWHC management does not require demonstrated high performance to be financially enriched. It’s somewhat akin to a caste system, similar to India, where the unwashed rarely live without the worry of hunger; while the favored overeat, do not share, commit needless waste and are unworried.

    Jim Hall’s research regarding Centra Health and Valley Health executive compensation leaves unanswered a few questions regarding whether the senior executive salaries are merited based upon net operating income, patient care and worker satisfaction. Some examples.

    Did any of the CEO’s fight a protracted battle against another healthcare provider by building a hospital but failed to keep the competition from building a competing hospital?

    Did any of the CEO’s make egregious errors in financial judgment to place their own organizations in dire financial jeopardy?

    Did any of the CEO’s eliminate jobs in order to support their own pay raises and bonuses or the construction of unnecessary things such as newer and larger highway signs to reflect another organizational name change?

    Are the workers pleased with the work environment created by their CEOs? Did any of the CEOs create work environments employees view as hostile and uncaring towards them?

    Are there employee unions at Centra Health and Valley Health? If not, do the employees feel a need for a union so cares and concerns will be heard by management?

    Are the Boards of Trustees puppets of the CEOs? Are they independent and engaged in the overall operation of the organization and hold the CEOs and senior executives strictly accountable for their decisions?

    Do the Boards of Trustees have performance standards for rewarding CEOs and senior executives? Or are they rubber stamps nodding their heads in agreement when they are asked for greater CEO and senior executive compensation?

    Are CEOs and senior executives rewarded for making unwise capital expenditures that result in precipitous decreases in net operating income?

    How many outpatients and inpatients do these organizations serve annually? How many different facilities serve these patients?

    Did any of these organizations purchase nursing magnet programs at the expense of declining patient satisfaction?

    Do any of the organizations have medical school approved resident doctor training programs?

    Do these organizations hire consultants to teach or advise their CEOs and senior executives?

    How often are the consultants called upon to solve problems created by the CEOs and senior executives?

    We may or may not have a situation of gross overcompensation at MWHC. It’s difficult to know because Fred Rankin and his senior executives refuse to engage the public in open discussion on the topic and allay the public’s concern. Given the unwillingness to participate, it is not unreasonable to suggest they are unable to defend their decisions in large part because they are grossly overcompensated.

  • Been There, Done That

    Outsider, I would like to respond to a few of your comments. Firstly, in regards to the “protracted battle” to keep another health care provider out of the service area~~this is standard practice in the industry and MWHC would be remiss not to protect their interests~~it is called competition, and you will see much more of that, from both sides, now that there is a second entity in town. It occurs every day, in every community, where there are multiple hospitals. Secondly, regarding the elimination of positions, it is Management’s JOB to reduce inefficiencies and streamline operations for maximum efficiency. And it is most definitely one of the criterion that HCA uses in evaluating/rewarding it’s CEO’s. As for worker satisfaction, do you have access to an empirical study related to employee satisfaction that supports your position, or are you relating anecdotal information? Also, you ask the question about the BOD requiring accountability of the CEO~~do you have knowledge of anything specifically to the contrary? As for the use of consultants in decision making~~this is routinely done in healthcare and higher education and all major industries. No one, not even the most stellar CEO, can possibly know everything about everything~~utilizing consultants is standard issue and sound management. Frankly, it is the market that defines executive compensation in the healthcare industry. The Board evaluates performance~~not you, or anyone else. To suggest that you should be a party to that process is unbelievable, and indicates your lack of knowledge. Given your lack of knowledge, it is not unreasonable to suggest that you are envious of the compensation that these individuals are receiving.

  • Outsider

    Been There, Done That, I would like to share some observations that may have been overlooked or perhaps ignored when defending the salaries of the CEO and senior executives at MWHC.

    First, one does not have to be struck by a moving bus in order to conclude that being struck by a moving bus can be unpleasant, painful and sometimes fatal.

    Second, inquiring minds sometimes make people uncomfortable, especially when information obtained begins to point towards mischief.

    Third, all that glitters is not gold. Leaps of faith or pleas alone do not confirm whether there is gold behind the glitter. Nor do protestations of deserving money or praise mean they are merited.

    Fourth, one does not have to be a professional apologist in order to recognize one.

    Finally, it’s been said that the truth would be more popular if it were not always stating ugly facts.

  • Ubermensche

    Among the comments from the assorted kooks and cranks above there was actually one good idea: Take a look at who is on the Medicorp Board. Who are these people and how did they get there? How long have they served? What is their expertise? How truly independent can they be expected to be? For example I understand that there is a minister, a former judges wife, and a soda bottler on the board – I am sure they are all very nice people but do they have the kind of expertise that would allow them to challenge something proposed by the CEO? Is the Medicorps Board really capable of supervising Mr. Rankin and his subordinates or are they likely to be influenced by a good dog and pony show? Sounds like a story the FLS might be interested in researching – did you hear that JIM HALL?

  • Been There, Done That

    Every Board I’ve been on or worked with has been a lay board comprised of a wide cross section of the community, and usually they are leaders in the community. None of the members have had specific expertise in the industry for which they were serving as a board member. That is how it works. I’ve served on profit and non profit boards, and worked as an executive in both scenarios. Community leaders can translate their experience to the Board, and these rich and varied perspectives improve the organization and help avoid a stagnating “group think” mentality. The variety of personalities and backgrounds on the Board actually makes it LESS likely that the Board in it’s entirety could be influenced by a good dog and pony show. The Board membership of MWHC should already be available as public information for anyone that is interested.

  • Jason

    Right on Uber. Lets find out more about the folks who make up the board that hires the man that controls one of the most important organizations in this community. If BeenThere, blah blah … is right then we can all be “reassured” by the qualifications of the folks on the board. As an amateur investor i can tell you that the folks who serve on corporate boards generally have considerable expertise in corporate finance and management. That is good because it makes it less likely that the CEO can intimidate or otherwise improperly influence his bosses. i think it would be a great idea if the FLS pursued this story. just who are the people running medicorp – are they qualified to run a multimillion dollars corporation? Whether profit or nonprofit the same principles of management apply = so lets see who is running the show over there.Inquiring minds want to know – except for Been There.

  • Outsider

    Jason and Ubermensche, you identified where accountability for substandard performance begins.

    The Mary Washington Healthcare Board of Trustees mission is to improve the health status of all people in our community. The Trustees are responsible for the performance of MWHC CEO Fred Rankin and his senior executives; as well as healthcare at Mary Washington and Stafford Hospitals, employee morale and MWHC’s reputation. Can the Trustees fulfill their mission while Fred Rankin remains at the helm?

    The Trustees live among us. Each would likely tell us they serve unselfishly to benefit all members of our community. Each one probably stands tall and smiles to hear praise in the air; but likely disappear from sight to avoid public accountability for allowing Mr. Rankin and the senior executive leadership to proceed unchecked for far too long. MWHC employees, patients and the community are apparently unhappy with;
    - heavy-handed and sometimes retaliatory senior executive leadership;
    - payment of large executive bonuses while laying off many of our hard working neighbors at the same time;
    - lack of accountability of the executive leadership; and
    - rapidly declining economic performance resulting from unneeded spending . . . such as attempting to ward off competition; needlessly rearranging and renovating offices and workspaces that are functional; or new signs to identify locations which have in existence for more than a decade.

    Who are the Trustees providing our community with a healthcare work force that is fearful; patient dissatisfaction; and worsening financial performance? Please meet:
    - Dr. John D. Burrow;
    - Dr. L. Paul Edwards;
    - Jan C. Erkert;
    - John F. Fick, Chairman;
    - Rev. Allen H. Fisher, Jr.;
    - Dr. William A. Hamilton;
    - James A. Lewis;
    - Raymond C. McAfoose;
    - Dr. Michael P. McDermott;
    - Dr. Patrick J. McManus;
    - Donald H. Newlin;
    - Fred M. Rankin, III;
    - Clarence A. Robinson;
    - Raymond L. Slaughter;
    - Jonathan D. Wallace; and
    - Alda L. White.

    It’s time for the Free Lance-Star to play a more assertive role while continuing to cover MWHC. The FL-S could be a good community member by bringing the pleased, displeased and otherwise interested members of our community together in open forum to search for ways to end the discord and dissent. We should publicly hold the Trustees, Mr. Rankin and the executive leadership accountable for their performance.

    The FL-S could sponsor one or more public forums and invite the Trustees, Fred Rankin and the MWHC senior executive leadership, interested community members and MWHC employees to participate. The Trustees and senior executive leadership could:
    - listen to the community’s concerns,
    - answer questions publicly; and
    - promise publicly not to retaliate against MWHC employees who exercise their right to speak freely about their concerns so long ignored by MWHC.

    Is the FL-S up to helping the community gauge the commitment of the Trustees, Mr. Rankin and the MWHC senior executive leadership to provide consistent and excellent patient care by respected and happy employees?

  • Arch

    Outsider makes a good point about a public meeting option. I would suggest; however, that the Board also consider meeting with providers to gain their feedback on the Mr. Rankin and the Executive Team. Providers likely will not attend a public forum………without the providers, the hospital cannot stay in business. Do the employees and health care professionals in the community think these meetings will happen…….not…….Fred doesn’t like bad news.

  • Bronco

    Nice work outsider, now lets find out as much as we can about these individuals. Do they have the smarts, do they have the wherewithal, do they have the financial independence to make unbiased decisions – i note some of the individuals are doctors, are they truly independent or do they have some type of “arrangement” with the hospital. Inquiring minds DO want to know! Jim are you listening?

  • Ubermenche

    Both Dr. Edwards and McDermott belong to medical groups that have exclusive contracts with medicorp, hmmm …

  • Hagia sophia

    Dr. Hamilton receives a medicorp salary as Medical Staff president.

  • Rochester

    There might be a story in this, if only we could find a health news reporter!

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