Ah, those wonderful health care non-profits

[William Thornton]

A non-profit health care hospital means, naturally, the lack of that bane of progressives - a profit motive. No greed driving the enterprise.

Right?

Mebbe.

Here are the figures for non-profit hospital CEO pay in the Altanta area:

$1.5 million
$799k
$3.4 million (for 2011, probably more for 2013)
$2 million
$1 million
$5.3 million
$1.1 million
$1.3 million

Those with a keen interest in CEO pay can have some real fun here.

I offer this for my forum friends who like to set non-profit healthcare providers along side of for-profit ones. There isn't much difference in this regard. It's big bidness.

As a greedy capitalist pig, my view is that if the $5.3m guy can show me how he is worth this much, I'm happy to pay him that much.

The $799k guy must surely go to work with an inferiority complex. Peanuts.

[Mrs Haruo]

As a customer/victim/patient/consumer/care-giver/general observer/ of several health care delivery systems around the country, I can tell you one thing, from personal experience, if I come in for a crash landing and the aid crew asks me which hospital to be taken to, I can tell you from personal experience, I will choose "Saint Whachamacallit's" over "City General" ANY TIME! If I am bleeding, broken and mashed, I would rather be in a Catholic institution where they ask you "Where does it hurt and How can I help you?" before "Who is your insurance carrier?" As a mother of two children, a former scout leader, and Little League volunteer, the most important thing is to get the child treated and comforted. The bill can be settled later. When Haruo broke his ankle in three places a few years ago, he had recently been laid off from his position of 13 years. He had NO medical coverage and we made do with advanced first aid for a few days while we hoped it was just a bad sprain.
I had foot surgery (both feet) in 1985, and while IBM paid the bill, I remember what the charges were, and they were enormous for surgery and 3 days stay in the hospital with a cast on each foot and wheel chair rental for 6 weeks etc.... So when he made a few phone calls and was referred to Swedish Hospital in Seattle (Where I was born by the way, to a humble but college educated chicken farmer and his wife in the hills East of Seattle). When I got word of what xray s showed I had visions of bills that would ruin us financially and we would have to say goodbye to the tumbledown mess of a little house we call home. Before he went into surgery, a social worker visited us and helped us with paperwork to explain our tenuous situation to the committee that has a nice fat endowment to help pay expenses of those who are without resources. By the time he came out from under the gas 9 hours later with 3 titanium plates and more screws than I could count rebuilding a horribly fractured ankle, I found out there would be no charge for his hospital stay. I had visions of us having to move from our house to some assisted living center for the indigent ---- instead, thanks to that Non Profit hospital, today he works a full time job on his feet at the grocery store, and we STILL live under our own roof, leaky as it is getting, at least it is still ours to fix. Thanks to the help I am getting from counselors at the Veteran's Administration, and a Tai Chi class taught by a Viet Nam vet, and a boatload of pills to slow down my seizures, when the sun came out today I was able to haul a few 2x4s and start fixing the fence that blew over in a storm. In a house that's 10 years older than we are, you have to expect a few wobbles and surprises.
Health care is a lot more than dollars and cents. It's healing the sick and mending the broken.

[Sandy]

I don't really see that there is any job, regardless of the profit that a company makes, or in a non-profit, that warrants a salary of a million dollars a year, not even in professional sports. No human being could perform at that level of expertise or do that much work. Investment income is one thing, salaries paid by companies is quite another.

The CEO of the main not for profit hospital system in our area earns $445K, and his system is ranked sixth in the country in quality care overall. But it's a university/medical school association, so the big bucks go to the president of the university.

[KeithE]

[Sandy]

When you think about it, we're just talking about the pay scale for the CEO's. Most health insurance companies have a pretty thick layer of executive administration. But salaries that are paid are expense items, not part of the profit, unless some of that figure is put into stock options. But I believe the citation is salary plus stock options. If an insurance company is to follow the ACA's 80% rule, that 80% of the premiums collected must go to pay for health care, then the profit margin for health insurance must be substantial, and extremely fair, if salaries can be that high.

[William Thornton]

These are hospital CEOs not insurance company. Executive compensation is a combination of base salary and incentives.

[KeithE]

[William Thornton]

I commend my lib brethren for their haughty concern over what one private individual, working for a private bidness, under completely voluntary agreement among all parties, is paid. This should get you credit for higher spirituality and greater compassion for the poor among those who traffic in such currency. I ask for no pardon for the obvious sarcasm.

Highly paid athletes (and other entertainers) are especially interesting, since their extremely rare and marketable abilities deserve whatever the public is WILLING to pay to view them. Why this is of concern for third parties is a bit of a puzzle. I am unaware that Sandy is required to pay to see LeBron James toss balls through hoops, nor Tiger Woods to whack a white ball around a nice landscape. Tax them if you are offended by the sums.

All the tutt-tutting over executive pay is just a sideshow and an outlet for the self-righteousness of critics. I suspect that with gummit heavily involved in health care, that it will not be long until they ratchet up pressure on CEO pay.

Stock options are an expense to other shareholders, since the pool of ownership is expanded and value of individual shares is diluted. I'm not sure why this has any relevance to non-shareholders, save for the usual wealth envy and class warfare reasons.

I put this non-profit stuff up for view and discussion primarily because of my brethren's incessant concern over greedy capitalists. Non-profits should probably be scrutinized to see if there is good reason to grant them favorable tax treatment.

[KeithE]

[William Thornton]

On the athletes, why shouldn't they be able to market their rare skills? Poor folks get to watch all these for free (TV) which is why there is so much money In the pool to pay the participants. Regardless, you haven't explained why high pay for elite athletes is a problem. It would be more of a problem if they disappeared and the popularity of the NFL, NBA, MLB, etc declined. Then, lots of good paying jobs would decline as well. You resent that someone in entertainment can make more than people in occupations that "contribute" to society?

You show yourself as bidness challenged on stock options. See if you can understand that equity ownership dilution means each tiny slice of the company is worth less as the pool of shares is increased. And when execs exercise their options and sell them, the selling (especially in small caps where option share totals might be a significant number) pushes prices downward.

But I do understand the feel-good motivation in all this.

[KeithE]

[William Thornton]

Stock options add to the total of outstanding shares; hence, dilution of the value of individual shares. Conversely, when companies buy back their own stock they increase value of individual shares. When there are more sellers than buyers, prices decrease. When the opposite is true, they increase. You must have a chart proving that when options are sold prices are pushed upward. I thought data drives stuff here.

[Dave Roberts]

I'm glad you are where you get all that free TV, William. Where I live, the end of high-power VHF broadcasting replaced with digital has been a gold mine for the cable and satellite companies. The closest over-the-air signals come from more than 60 miles away, and they often pixilate. So, even the poor who watch stars and athletes have to pay. Also, TV revenues, usually dictated by the ESPN networks and others, require the public both to pay and to receive their streams of commercials. Frankly, when you compare athletes pay with what we pay our teachers, police officers, and military, it says a great deal (negatively) about our society's values.

[William Thornton]