Hospital CEO salary is excessive
September 28, 2009 · 12:49 PM
The Whidbey General Hospital commissioners should reconsider giving newly chosen CEO Tom Tomasino such an excessive salary package in the midst of a national health care crisis. People hear an a daily basis how the cost of health care is skyrocketing. Many of them will inevitably see the hospital board’s decision to pay Tomasino $230,000 a year as part of the problem. It’s simply bad public relations for a public hospital district.
It’s unclear why the CEO’s pay at Whidbey General has mushroomed by an extra $100,000 in just five years. In 2004, former CEO Scott Rhine signed a contract setting his salary at $130,000 a year. That was after about five years on the job, which is about the average length of a hospital CEO’s tenure. The CEO of Island Hospital in Anacortes currently makes $211,000 after nine years in the job.
The board determined the new CEO’s pay based on the Northwest Region Hospital Executive Compensation Survey. According to the survey, hospitals with $100 million in gross revenue pay their CEOs $180,000 on average; institutions with $250 million in gross revenue pay their CEOs $290,000 on average. The commissioners decided to pay Tomasino in the middle since the hospital makes $120 million a year in gross revenues.
But there are other surveys, other statistics and other considerations the commissioners should look at. Executives at rural hospitals, like Whidbey General, make about half of what their counterparts in city hospitals pull in. According to a study completed by the IRS this year, the average salary of a CEO at critical access hospitals is $152,600 a year. Whidbey General became a critical access hospital four years ago to obtain $1.4 million in additional patient reimbursements from the government.
By all accounts, Tomasino is the right person for the job. He stepped into the job on an interim basis last year after Rhine was forced to retire early. The hospital commissioners hired a firm, at a cost of $103,000, to find a new CEO. Tomasino was not among the finalists, but the commissioners came around to the obvious choice after the finalists all dropped out. Now they need to come around to the issue of reasonable pay.