Nonprofit hospital exec pay getting heat from struggling city

Should struggling cities get a cut of the money otherwise directed toward executive pay of nonprofit hospitals? That's the debate going on in Rhode Island, where Providence is on the brink of bankruptcy and a healthcare exec is raking in millions.

Critics have long scrutinized executive pay but especially in struggling areas. Lifespan, parent company to Rhode Island Hospital, paid its CEO, George Vecchione, $9.5 million in 2009, $3.2 million in 2008 and just under $3 million in 2007, WRPI.com reported.

Providence Mayor Angel Taveras said the city could file Chapter 9 if hospitals don't start contributing more to the budget, the article noted.

But hospitals have contributed in community benefits, Ed Quinlan, president of the Hospital Association of Rhode Island, told WPRI.com last week. Total uncompensated care provided by Rhode Island's 12 hospitals rose from $105 million to $160 million during the last four years.

Nationally, nonprofit hospitals spend an average of 11.3 percent of their total spending toward community benefits, including free care, community health improvement programs and subsidized services, according to an American Hospital Association report last week.

As for the million-dollar pay, the state hospital association said it's based on performance.

"You have to look at the role hospitals play in their community," Quinlan said. "Executive compensation is determined by hospital boards based on the financial performance of the hospital, based on the financial stability of the hospital - there's multiple factors."

For more information:
- read the WRPI.com article
- here's the AHA report (.pdf)

Related Articles:
State cap on executive pay moves forward
Pay for 21 Washington nonprofit hospital leaders exceeded $1M
AHA: Hospitals spend 11.3% on community benefits

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