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February 10, 2013

Editorial: Big paycheck, big responsibility

Press-Republican

It would be easy to look at the salaries of hospital CEOs, reported in today’s paper, and think they are too high. That would be a mistake.

Because of operating deficits, layoffs and cutbacks at area hospitals last year, the Press-Republican decided to look into how much their leaders were being paid. The final decisions on cuts are made by these men and women, who are ultimately responsible for the financial stability of the major North Country health-care facilities.

We had heard rumors of salaries of $1 million or more, in some cases, and felt it was time to look into what the CEOs are actually paid and what influences that decision. Veteran reporter Denise Raymo spent three weeks on the story, researching IRS reports and talking with health-care and hospital representatives from around the region and state.

The compensation paid to local CEOs range from around $210,000 for the current chief of Moses-Ludington Hospital in Ticonderoga to about $750,000 for the CEO of CVPH, the North Country’s largest hospital.

All but one CEO was cooperative as we pursued this article. Adirondack Medical Center CEO Chandler Ralph refused to tell us what she is paid, citing confidentiality. She is paid through a separate, private company, so her salary doesn’t have to be reported to the IRS. The government doesn’t force her to tell. But is that a good reason not to share the information?

Adirondack Medical Center is a major employer in the Tri-Lakes and the No. 1 place where residents spend their health-care dollars. Ralph just authorized layoffs and other cuts. We are surprised she doesn’t feel some responsibility to be candid with all these people whose lives are affected by her decisions. Refusing to give up the number — even knowing the pay for every other CEO would be included — is bound to leave people wondering if she has something to hide, even if that isn’t the case.

We are able to say, in the case of the other hospital leaders, that it does not appear their salaries are out of line with their responsibilities. That is, of course, in the eye of the beholder. The numbers look big to most of us in the region, whose salaries are far lower, but, remember, these people are running the equivalent of multi-million-dollar industries.

The average hospital CEO salary, nationwide, is $500,000, factoring in the biggest facilities and the smallest. Local officials say their salaries fall in the mid range for hospitals of their size. 

The level of responsibility in running a hospital is oppressive. You have to be on top of — ahead of, actually — a myriad of federal and state regulations, national health-care trends, reimbursement issues, employee relations, cash flow and much more. Even more imposing: Your facility has the lives of thousands of people in its hands.

Finding and retaining competent hospital leaders is a challenge anywhere — and more so in a rural region that can’t offer the pay and amenities of urban areas.

As for how the CEOs are regarded personally, it is up to each of them to earn the respect that goes with the paycheck.

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