Salaries in the C-suite, and then some

Uwe Reinhardt, a prominent health economist at Princeton (and prior SHM plenary speaker) writes a bi-monthly column for the NY Times.  Provocative and whip smart–whether you agree with him or not–he scribed an interesting column last week on hospital governance.  Part of his column focused on nonprofit IRS filing statements.

You may be enticed into learning the financials of your institution, including the salaries of your highest paid officers and docs, as well as the usual suspects–percent spent on charitable care, margin, etc.   In the piece, Reinhardt describes the lack of data transparency in our system, especially with hospitals.  Until now.

If you go here and register (only an email and password required), you can access the IRS Form 990. The document contains all the information you might want to view and then some.  After you log in, go to the upper right corner and enter your institution’s name. You will move to a page with a clearly labeled section containing the 990 forms for 2010 and 11 on the left hand side. Click and open.

Below, I chose the Cleveland Clinic as an illustrative example.   I picked the Clinic because of its iconic status and national stature and not due to anything disagreeable.

On page one, dividing line 19 by line 12, you will obtain the margin (in this case, a healthy 5.9%):

On page 17, the list of salaries begins. The CEO Dr. Cosgrove, as you see below, earned $2.3M.   If you skim, you will note trustee compensation along with those of other key medical personnel (chairs and directors):

The larger the institution, the more difficulty you will have in drilling down numbers, but in a 200-300 bed community hospital, decoding the dollar flow will be easier.

Why does knowing your hospital’s financial data–even if you do not play CFO–assist you in your role as ward foot soldier and fixer?

Aside from sheer interest, dealing for resources in a strained environment makes for stressful meetings.   Trust but verify, and having some grasp on the financial state of affairs on the first floor makes you more of an equal partner.

Transparency also helps you understand your negotiating position.  Consequently, you will focus requests if restraints exist in your practice venue.  Margins and the strength of your hospital–like the gossip in the schoolyard–seem to vary depending on which water cooler you visit. Now you can skip the water break and drink the Perrier.  You can see the data for yourself.

Moreover of course, if you work at the Clinic, you can inquire as to the $5.8M of “unrelated business” in the Middle East and North Africa on page 34.   Just fun stuff to know.   If you like to ruminate and muse.

Brad Flansbaum

Bradley Flansbaum, DO, MPH, MHM works for Geisinger Health System in Danville, PA in both the divisions of hospital medicine and population health. He began working as a hospitalist in 1996, at the inception of the hospital medicine movement. He is a founding member of the Society of Hospital Medicine and served as a board member and officer. He speaks nationally in promoting hospital medicine and has presented at many statewide meetings and conferences. He is also actively involved in house staff education.

Currently, he serves on the SHM Public Policy Committee and has an interest in payment policy, healthcare market competition, health disparities, cost-effectiveness analysis, and pain and palliative care. He is SHM’s delegate for the AMA House of Delegates.

Dr. Flansbaum received his undergraduate degree from Union College in Schenectady, NY and attended medical school at the New York College of Osteopathic Medicine. He completed his residency and chief residency in Internal Medicine at Long Island Jewish Medical Center in New York. He received his M.P.H. in Health Policy and Management at Columbia University.

He is a political junky, and loves to cook, stay fit, read non-fiction, listen to many genres of music, and is a resident of Danville, PA.

3 Comments

  1. […] Posted at The Hospitalist Leader on 4/15/2013 Brad Flansbaum, writer for The Hospitalist […]

  2. Bill Rifkin on April 16, 2013 at 9:34 pm

    Great last few posts! Very informative and useful. Good we have someone like you to dig around.

  3. Health Wonk Review: Money Tree edition on April 25, 2013 at 10:47 am

    […] Brad Flansbaum is a fan (as are we) of transparency in health care. In his post, Brad explores how much financial info really is available to folks interested in knowing, for example, just how many dollars go where. Starting with a simple […]

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