April 11, 2008
Hospital Association Blasts Pay Proposal
By Matthew L. Brown
The state Senate is wrong to propose "populist, headline-grabbing patchwork solutions" to rising health care costs like the ones in a proposed law that would cap hospital executive pay at $500,000, argues Lynn Nicholas, president and CEO of the Massachusetts Hospital Association.
Nicholas blasted the bill in testimony before the Senate Thursday. The bill, S2559, was proposed by state Sen. Mark Montigny, D-New Bedford. The bill would cap salaries for executives at nonprofit hospitals with revenues of more than $1 million.
John O'Brien, president and CEO of nonprofit UMass Memorial Health Care, made $1.3 million in 2005. Other top executives at UMass Memorial also received more than $500,000. Executives at most other Central Massachusetts nonprofit hospitals generally received between $200,000 and $400,000.
This morning Nicholas said, "I can appreciate that the man in the street is concerned with the continually rising cost of health care." However, she said a cap on hospital executive pay would be counterproductive. "Doing a good job relates to lives lost and lives saved," she said. "It takes a seasoned executive to take on those issues, and the pay is not out of line."
According to the State House News Service, Montigny filed the salary cap bill following reports that William Van Faasen, chairman and former CEO of Blue Cross and Blue Shield of Massachusetts, made more than $19 million in 2006.
Nicholas said Massachusetts hospitals would be unable to attract qualified executives if salaries were capped at $500,000. She said health care costs are driven up by the treatment of widespread chronic disease and overly complex reimbursement schemes.
Nicholas blasted the bill in testimony before the Senate Thursday. The bill, S2559, was proposed by state Sen. Mark Montigny, D-New Bedford. The bill would cap salaries for executives at nonprofit hospitals with revenues of more than $1 million.
John O'Brien, president and CEO of nonprofit UMass Memorial Health Care, made $1.3 million in 2005. Other top executives at UMass Memorial also received more than $500,000. Executives at most other Central Massachusetts nonprofit hospitals generally received between $200,000 and $400,000.
This morning Nicholas said, "I can appreciate that the man in the street is concerned with the continually rising cost of health care." However, she said a cap on hospital executive pay would be counterproductive. "Doing a good job relates to lives lost and lives saved," she said. "It takes a seasoned executive to take on those issues, and the pay is not out of line."
According to the State House News Service, Montigny filed the salary cap bill following reports that William Van Faasen, chairman and former CEO of Blue Cross and Blue Shield of Massachusetts, made more than $19 million in 2006.
Nicholas said Massachusetts hospitals would be unable to attract qualified executives if salaries were capped at $500,000. She said health care costs are driven up by the treatment of widespread chronic disease and overly complex reimbursement schemes.
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