Health care executive salaries are out of line with a charitable status
June 10, 2014 12:00 AM
The article you ran on executive compensation at the former West Penn Allegheny Health System (“Former President/CEO Tops Compensation List at West Penn Allegheny Health System in 2012,” May 15) exposes a glaring problem with health care in Pennsylvania. The old West Penn Allegheny Health System was not the only culprit; executive compensation at large hospitals and health systems, particularly hospitals that are designated as institutions of purely public charity, are out of control. These institutions receive millions of dollars from the commonwealth and local governments every year in the form of tax exemptions. Despite their generous tax treatment, the cost of receiving medical care at these facilities continues to rise.
Making matters worse is the fact that the former West Penn Allegheny Health System continued to pay its top executives seven-figure salaries even though the system was losing tens of millions annually. These executives continued to draw their salaries as they pushed through consolidation plans that eliminated the positions of more than 1,500 doctors, nurses and support staff. I can’t speak for everyone, but when I need to seek medical treatment, I would much prefer the hospital have an adequate nursing and support staff than a team of millionaire executives.
Now, I recognize that the executives referenced in the article are no longer with the renamed Allegheny Health Network. Unfortunately, these same executives were granted generous six- and seven-figure severance packages on their way out the door. One can only hope that AHN and its corporate partners at Highmark will remedy this situation and move AHN away from this type of executive-centered, for-profit culture. I have doubts, but only time will tell.
The article hints at something without coming out and saying it, something that many nonprofit hospitals and health systems have forgotten but need to remember: They are not private, for-profit companies. For years these entities have retained and enjoyed their nonprofit and charitable status but have operated in a manner that more closely resembles for-profit corporations. Perhaps the time has come for the commonwealth to take a serious look at revising our Institutions of Purely Public Charities Act and make sure these entities live up to both the letter and spirit of the law.
REP. TONY DeLUCA Penn Hills
The writer, a Democrat, represents the 32nd Legislative District.
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