Thanks to lowered reimbursements, some struggling hospitals will be forced to shut their doors. Yet weeks before city-owned Hoboken (N.J.) University Hospital filed for bankruptcy, it gave its CEO a six-figure payout upon resignation, reports The Star-Ledger.
Former CEO Spiros Hatiras will receive $600,000 in compensation and full medical benefits for one year, although the organization doesn't have enough funds to pay its $1.9 million in city-related bills or the $1.45 million it owes to employees' pension and health funds, according to the article.
"Personally, I think it's a disgrace that they are giving out a golden parachute while people like nurses are not getting paid," said one of the most vocal opponents of the sale, Beth Mason of Hoboken City Council.
Even though the cash-strapped hospital has amassed nearly $50 million in debt that it cannot pay, Hatiras will be paid $120,000 up front and $15,000 a month with a balloon payment of $390,000 no later than Jan. 1, 2012.
Delivering such a large severance package within weeks of filing for bankruptcy may lead to legal issues as some creditors may get much less than what they're owed, notes the The Star-Ledger.
Meanwhile, escalating healthcare costs haven't stopped CEOs at nonprofit hospitals in the Midwest from earning an average of $481,000 in total pay, according to a new white paper from Payers & Providers and MCOL.
What's more, after examining the tax returns of 731 nonprofit hospitals in 10 Midwestern states, the white paper showed that many Midwestern hospital CEOs are raking in multi-millions of dollars in base salary and additional compensation.
For example, the highest paid hospital exec in the Midwest in 2008 was Rand L. O'Donnell, of Children's Mercy Hospitals and Clinics in Kansas City, Mo., who received $5,987,194 that year. He earned $871,839 in base pay, plus additional compensation of $5,115,355, according to the P&P whitepaper.
For more information:
- read The Star-Ledger article
- read the Payers & Providers press release