Wednesday, March 6, 2013

The Commercial Appeal and Hospital Salaries

Posted By on Wed, Mar 6, 2013 at 2:32 PM

Let's cut right to the chase. The head of nonprofit Baptist hospital system, Stephen Reynolds, makes more than $3 million a year and the head of nonprofit Methodist hospital system, Gary Shorb, makes over $2 million, according to 2011 tax returns for the hospital systems. That is not news to regular readers of this column, but it might be news to readers of The Commercial Appeal.

Why do I bring this up now? Because a column on the op-ed page of The Commercial Appeal this morning, Wednesday, set off my inner Mr. Cranky.

The column by Albert R. Hunt, a Washington insider, television pundit, and columnist for Bloomberg View is titled "U.S. health care sicker than we thought." Hunt lavishly praises a recent story in Time magazine by Steven Brill about "the scam the U.S. health care system has become" called "Bitter Pill: Why Medical Bills are Killing Us." Brill's story is a memory-choking 20,000 words so I am not going to link to it but you can find it easily enough if you want to.

Hunt and Brill zeroed in on nonprofit hospitals, "the cornerstone of many communities, capriciously overcharge patients, sticking the powerless with exorbitant bills while paying lavish salaries to their executives."

Another Brill bite: "In hundreds of small and midsize cities across the country — from Stamford, Conn., to Marlton, N.J., to Oklahoma City — the American health care market has transformed tax-exempt “nonprofit” hospitals into the towns’ most profitable businesses and largest employers, often presided over by the regions’ most richly compensated executives. And in our largest cities, the system offers lavish paychecks even to midlevel hospital managers, like the 14 administrators at New York City’s Memorial Sloan-Kettering Cancer Center who are paid over $500,000 a year, including six who make over $1 million."

At the end of his column, Hunt wrote that "the system's big stakeholders have well-connected lobbyists, are important campaign contributors or forces in their communities. They react to articles such as Brill's, but really aren't much worried. They are rich, powerful, and protected."

Yes they are protected, and one way they are protected is by local media not responsibly reporting readily available information on profits and salaries. Last Sunday, CA editor Chris Peck used his column to write about health care and the newspaper's editorial board meeting with Shorb, CEO of Methodist. The subject of salaries and Brill's article apparently never came up. Or at least it didn't make it into Peck's column.

Perhaps it was because, as former CA editorial page editor Otis Sanford wrote in his column two years ago, "Salaries are always a touchy subject."

Salaries are a touchy subject because people like to know what other people make, but most of them don't like other people to know what they make. That's private, unless the salary is public information. The salaries paid by nonprofits, if they are over a certain amount, are reported on a publicly available tax Form 990, available online via to anyone with minimal curiosity and computer skills.

Some salaries are touchier than others. When former Flyer reporter Mary Cashiola left the newspaper to take a job as brand manager for the city of Memphis, The CA saw fit to publish her salary — a jaw-dropping $64,000. Twice. The CA and local television stations often report on the salaries of public officials, as they should. But the visuals are awful. And what about so-and-so? On Tuesday night, a WREG-TV reporter mentioned that Rick Masson, the newly appointed special master, will be paid $250 an hour. Co-anchor Richard Ransom correctly noted that lawyers in the schools cases are making more than that.

Whoa! Where ya goin' with that, Richard? Co-anchor Claudia Barr raised an eyebrow and segued into the next story. Maybe Ransom and Sanford, now holder of an endowed chair of journalism at the University of Memphis, will explore this subject on WREG's "Informed Sources."

What media rarely do, however, is report the salaries of highly paid chief executives of nonprofits such as hospitals, even though that is also easily accessible public information and very much in the news. Nonprofits, foundations, and quasi-public organizations that get public funding and/or tax-exempt status have taken over a big slice of the functions governments used to do — the Riverfront Development Corporation, Overton Park and Shelby Farms conservancies, the Kroc Center, and charter schools to name a few.

For 20 years, Memphis magazine and the Flyer have periodically reported on nonprofit salaries, usually in the context of a news story or survey. This is not wildly popular with the people in the surveys or, probably, some people in our sales department. But it makes no sense to write about, say, an athlete or celebrity making $10 million a year (they don't care what you say and are not going to call you up) or the mayor or some superintendent or division director making $64,000 or $200,000 and write nothing about the local people in the middle who are just as influential or more, and whose salaries are also public information.

It will come as no surprise to anyone that there are days and weeks when column writers struggle to find something to get exercised about. Occasionally speaking truth to power — local power that can bite back — is part of the job. The CA has some very able reporters who are well aware of the salaries paid to hospital executives and other heads of nonprofits. I know because I used to work there and have nagged a couple of my ex-colleagues about this.

The backdoor way to do this is to let someone else do the dirty work. But why have Al Hunt use space in your newspaper to quote Steven Brill in Time magazine on something your own reporters can localize? It's like doing an arms-length story about the National Enquirer breaking a sleazy story.

Except salaries are not sleazy. They're serious business, and may well be justified and then some. If it's worth Steven Brill's time and Al Hunt's time and space in your product, and there's a local angle that hits you in the face, it's worth your time too.

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