In its Aug. 11, 2014, edition, Modern Healthcare inaccurately reported compensation data for Dr. Ronald Paulus, chief executive officer of Mission Health, by using partial year salary data for his base compensation in 2011. Dr. Paulus in fact received a less than 1 percent base salary increase and should not have been included in the chart. Modern Healthcare regrets the error.
Original post Sept. 3: An analysis by Modern Healthcare shows that Mission Health CEO Ron Paulus was the big winner when it comes to core salary increases for executives at not-for-profit heathcare systems. In 2012, the most recent year with full data available, Paulus saw his base compensation go from $226,497 to $749,748, a stunning 231 percent increase.
Modern Healthcare notes the ongoing public ire at the big money payouts, adding that executive pay in this arena is increasing at a far faster pace than average worker salaries.
In July, Paulus told the Asheville Citizen-Times that he’s telling Mission employees to brace for cutbacks. Last year, Paulus said he would cut his pay 26 percent for 2014, and other senior Mission leaders would see their pay cut from 13 to 20 percent. From the story:
Mission Health predicts a $500 million decrease in payments over the next decade as more people get medical care outside of hospitals and reimbursements from Medicare and Medicaid decline. Seventy-five percent of Mission’s patients are covered by Medicare and Medicaid.
Included in that amount is $228 million the company says it will lose under the Affordable Care Act, also know as Obamacare.
Short-term fixes like freezing raises and vacation allocation are not good solutions, he said. The system used them, and deep salary cuts for hospital executives, to save $26 million last year.
The company is looking at everything from services and procedures to staffing levels to billing and payment collections across all its locations, including its five rural hospitals.
From Modern Healthcare:
Total cash compensation grew an average of 24.2 percent from 2011 to 2012 for the 147 chief executives included in Modern Healthcare’s analysis of the most recent public information available for not-for-profit compensation. Of those 147 CEOs, 21, or 14.3 percent, saw their total cash compensation rise by more than 50 percent. Another 51, or 35.7 percent, received total cash compensation increases of 10 percent or higher. The data came from Form 990s filed by the not-for-profit systems to the IRS for 2011 and 2012.
Hospital systems, their boards and outside compensation consultants justify these raises as adjustments necessary to keep pace with what the market dictates and to compete for talent that might flee to more lucrative for-profit positions.
The story goes on to note that critics say the high salaries undermine the message that the not-for-profit’s core business is mission-driven. “It is somewhat unique in the nonprofit sector that you have a class of CEOs that are working for public charities that are becoming millionaires,” said Ken Berger, president and CEO of Charity Navigator.
That’s a common GOP meme and very rarely true. The Canadian universal healthcare system shows its overall superiority with better longevity, lower infant mortality and better outcomes due to emphasis on early detection, affordable care and lower cost drugs.
Some few wealthy people may choose to have certain surgeries performed in the United States because money spent here reduces wait time in certain instances. Those are the facts.
Paulus is just another member of the growing medical mafia.
The exploitation of human suffering for obscene profit is even more evil than the Nazis because the Nazis thought what they were doing was right.
Why is nothing being said about long-term employees being dumped, the lack of housekeeping staff causing the hospital to be filthy, the shortage of security staff requiring untrained subcontract guards to be put in place who don’t know what they are doing and don’t care as well as frustrated, overworked hospital staff, angry frustrated physicians and the rudest front desk main lobby staff ever!? I have personally witnessed all of the above and its a disaster waiting to happen. Don’t put your family members in as a patient unless you have someone to stay with them. Too dangerous. Nursing care is horrible, understaffed with many unqualified inexperienced nurses. Morale is horrible from the minute you walk in the door of the main lobby to the time you finish or are discharged. Wait times in the ER ARE HORRIBLE without timely care. Stay away from MMH if at all possible. Why are these issues not being addressed?
Just to be clear on the facts in the USA: there is probably no hsp CEO in the USA making less than 750k who is responsible for a system the size of mission health. If you look at the modern healthcare article, most make 2x that as a base plus bonuses. People may feel that such a level of compensation is inappropriate, and that is certainly anyone’s right. However, companies with 1 billion dollars plus of revenue per year have to pay smart people a lot of money to run the show. There are not that many people that can run such enterprises and keep them solvent and functioning, especially in healthcare. A lot of big hospitals have imploded and gone bankrupt or even closed. I do not live in North Carolina or have any affilaitions but if the CEO of MIssion Health is paid 750k per year and has improved the bottom line and quality metrics of the hospital, then that is a bargain compared to much of the rest of the country. Many non profits are really suffering now with the new healthcare laws and getting someone who keeps the ship sailing is pretty fortunate.
To reiterate: the piece flubbed Paulus’s salary, but the core question remains whether his three-quarter-million represents appropriate compensation when, as previous Ashvegas threads have made clear, the people actually providing healthcare at Mission have serious qualms about the hospital’s leadership.
Mission’s mission under Paulus has been driven by capex, not opex: property acquisition and development (let’s call it ‘BuiltMore Offices’, since we know where the land came from); takeovers and partnerships that reduce the number of independent specialists and raise costs for patients; expansion of the executive layer while squeezing the larger workforce. He is the archetypal modern hospital administrator who gets twitchy when there isn’t a giant crane visible from his office window.
Because Mission’s board is a big part of the region’s de facto government, the C-T is no better than a stenographer for its press releases.
Thats actually a small salary for someone who runs a healthcare system. Most other ceos make a lot more. I know some doctors that make more then him. And the increase reflects that he worked 4 months last year and this year made his full salary. But that would require people to check their facts before the publish a story. But after all this is a blog. Anybody who thinks thats mans job is easy is a fool and again if working at Mission sucks so bad go work for another system, see if its any better.
the increase reflects that he worked 4 months last year and this year made his full salary.
So in fact it wasn’t a raise, and he’s cutting his own throat by pulling in three-quarter million a year? I hear the president of the United States has a tough job and he only gets $400k.
Are you on the clock for Mission PR, or do you just believe that people in Asheville need to bow and scrape to their local hospital wannabe-monopoly?
Think all this is about Mission Health System’s bid to become a top quality health system to serve its community? Hardly.
Think this CEO will stick around when the hospital goes belly-up, resulting in poor quality due to no money to reinvest in new equipment, services, or staff? Hardly.
Don’t expect the Citizens Time to follow up on this…and if they do can you say ‘soft ball’
Well, they did, and it is great to see the Asheville Citizen Times pulling together a very productive and accurrate story in response to Modern Healthcare’s mess. As for the “softball” comment, I believe this is what is referred to as professional journalism. Our community is fortunate to have leadership like Dr. Paulus’ – the transition that healthcare faces today is significant, leading through that change is extremely difficult and not always clear. Mission and more importantly, the people of Western North Carolina, are in good hands with the team at the helm of our communities “go to” healthcare provider!
The ACT story, including the Modern Healthcare editor’s comments, can be found at:
our communities “go to” healthcare provider!
The main reason Mission is “go to” is because it’s bought out anything in Buncombe County that isn’t nailed down.
Hooray for private sector monopoly tactics! All hail the benevolent leadership of Dr Paulus who graciously only pulls in three quarters of a million and forgoes his weekly head massage once a month in solidarity with the hospital porters!
Or, alternatively, from last year:
Mission has pledged to continue with all nonessential building projects, real estate acquisitions, and the assimilation of area medical and surgical practices under its banner. You can’t throw a stone anywhere near Asheville without hitting a Mission Health sign. Their directive is to effectively monopolize health care in this region.
And you don’t get to use “Dr” as a professional title if your job doesn’t involve latex gloves at least some of the time.
In the pre Obamacare health care debate back in 2008-09, insurance companies and big pharma got their fair share of heat (rightfully so). For the most part, hospitals got a pass. Hospitals are every bit as culpable. The media should demand to see the salaries of every VP in the Mission system (and they are numerous). The citizens of WNC would be shocked and outraged.
WOW! I was thinking about all those poor Mission employees suffering pay cuts while I watched Ron enjoy an Aveda scalp massage in a high-end Biltmore Park salon. Something seems out of whack here…
yuck…icky visual…aveda scalp massage on Ron…
Ah yes, more profit off of sick people. Very nice. One of my Canadian friends asked me this: “What do you do if you get really ill and you are poor down there?” I responded: “You make some guy at the top of the medical chain rich, and then you die.” She was horrified.
And if you’re Canadian and you get really ill, you come to the US for treatment.
Are you kidding me?!?! A 231% increase in one year while the front line staff has pay increase freezes and had a PTO accrual freeze for three months. This makes me sick. I mean I really need to go throw up now!
Paulus is in the mergers and acquisitions business, not the healthcare business.
His role is to acquire every specialist and family practice in the area that’s not nailed down, consolidate services around the Mission mothership (billing at hospital outpatient rates where possible) and either keep Mission from being gobbled up by a big regional hospital group or ensure that when it happens, it’s a very healthy payday for him and the other executives.
And they just confirmed there will be clinical and non-clinical staff layoffs for FY15. Amazing when much of the staff already feels short-handed and often overworked and tank advantage of. With this information, the cuts and layoffs feel disgusting!
Mission bosses have figured out what corporate America’s bosses realized a long time ago. Layoff employees, close plants, and then watch the board “reward” themselves and top exec’s with a huge bonus/pay raise at the end of the fiscal year for cutting costs.
The rest of us would go to jail if we tried a scam like this…for robbery.
All this guy needs is a mask and a gun…then his outfit would be complete.
When one sees a 231% pay increase in one year it really is quite easy to say that you’ll take a 26% pay decrease a few years later…