Lower exec salary not the answer to state Medicaid cuts, experts say

Even though executive salaries are typically the target of public scrutiny in the midst of budget cuts, trimming from the top with CEO salary may not be the answer to Medicaid challenges, according to healthcare experts.

New Hampshire has proven to be the prime example of the effects of Medicaid cuts on hospital workforces. Currently facing more than $250 million in Medicaid reimbursement changes, according to Seacoast Online, hospitals across the state have announced about 800 layoffs, including those at Elliot Health System, Southern New Hampshire Medical Center, Wentworth-Douglass Hospital, and St. Joseph Hospital. In response to the state's cuts, 10 New Hampshire hospitals filed suit to blockade the reimbursement reductions, a move that the state Attorney General said is not valid.

With millions of dollars at risk, some point to the executive salaries to make up the difference. However, some healthcare experts contend that the issue will not be resolved with pay cuts.

"Even if you cut (executive salaries) in half, I don't think you're going to cover the gap," said. Dr. James Squires, president of the New Hampshire Endowment for Health, in the Seacoast Online article.

Officials at New Hampshire system Exeter Health Resources, parent company to Exeter Hospital, said it conducted "reductions in management compensation," although they did not comment on details, according to the article. The two top earners did show slight declines in salary.

Name

Title

2009 Salary

2010 Salary

Kevin Callahan

President/CEO

$747,948

$740,927

Kevin O'Leary

Senior VP and chief financial officer

$454,174

$433,850

However, tax documents indicate Exeter Hospital spent an overall $91.2 million on salaries, employee benefits, and other compensation, which was up from the nearly $86.8 million during the previous year, according to the article.

For more information:
- read the Seacoast Online article

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