Fremont, Calif.-based Washington Hospital Healthcare System reimbursed its CEO for more than $20,000 in charitable contributions over the past three years, the San Jose Mercury News reported, including at least $11,000 to the Washington Hospital Healthcare Foundation.
Although Washington Hospital said CEO Nancy Farber was contractually due the reimbursements, spokesman Christopher Brown told the newspaper Farber would refund some of the reimbursements to avoid being "misunderstood and misconstrued." Farber's compensation is more than $1 million annually, according to the article.
Among the funds Farber is repaying are gifts to the hospital foundation's annual "Fund a Need" campaign. She was reimbursed for donating $5,000 toward a brain and spine imaging system in 2012, $1,000 toward an outpatient chemotherapy infusion center in 2011 and $1,000 toward a new catheterization lab in 2010, according to the Mercury News. Her $5,000 donation in 2013 to help fund mammograms for uninsured women will not be submitted for reimbursement, the hospital said.
Government ethics experts said reimbursing an executive's charitable contributions is unusual, the newspaper reported.
"Things like this cause the public to become cynical," Judy Nadler, senior fellow in government ethics at Santa Clara University's Markkula Center for Applied Ethics, told the Mercury News. Funneling money through Farber to the hospital's own foundation "is not a very forthright way to get donations for the organization," she said.
The revelations come as pressure mounts nationwide to curb executive compensation at not-for-profit hospital systems.
In California, the Service Employees International Union-United Healthcare Workers West (SEIU-UHW) filed petitions with the state Attorney General's office in the fall asking for a voter referendum limiting hospital executive pay to more than the U.S. president's salary, currently $450,000 per year, FierceHealthFinance previously reported.
Donations represent an important, but sometimes overlooked stream of revenue for hospitals. In Weymouth, Mass., for example, South Shore Hospital is hoping to increase charitable contributions by making its own contributions to city services pegged to the hospital's long-term growth. Other hospitals hope to turn satisfied former patients into charitable contributors.
To learn more:
- read the Mercury News article