Puttin’ on the Ritz

I don’t always agree with Oralndo Delogu, but when I do – – – I shout it from the rooftop.

Delogu is an emeritus professor of law at the University of Maine School of Law and a well-known policy wonk. He is also a frequent contributor to the Forecaster group of weekly newspapers in southern Maine.

With the increasingly controversial Affordable Health Care law looming on the near horizon, Delogu’s most recent column moneyraises a point that has been buried beneath the mounds of political rhetoric and stunning complexity of the new law.

In a nutshell, how do we make health care more “affordable” without addressing the skyrocketing cost of healthcare — even in the non-profit sector?

The first half of Delogu’s column focuses upon the fading memories of the Occupy Wall Street movement and all of its garbled rage toward corporate profits. But the second half focuses like a laser on the growing income disparity found in one of Maine’s largest non-profit health care providers. Delogu shares data he uncovered by Mainebiz about Maine Medical Center.

The state’s largest hospital, which is also Maine’s fourth largest employer, recently announced that it would be cutting more than 200 jobs. The hospital blames the usual suspects: uncompensated care, lower insurance payouts, etc.

But Delogu sniffs something else in the air.

According to Mainebiz, Maine Medical Center is the second largest nonprofit corporate entity in the state, with more than $1 billion in assets.

But here’s where it gets interesting:  Of the 27 highest paid health-care professionals in the state, 25 were associated with a “non-profit” hospital and seven of them are or were employed by Maine Med.

Delogu writes: “Based on 2010 salary data, the average annual salary of these seven physicians or executives was just under $1 million . . . one might ask how many hundreds of employees (at these 13 Maine non-profit hospitals) have annual salaries between $636,000 and say, $300,000?

Although there is plenty of evidence to suggest some outrageous behavior in the private-sector world of corporate America, it’s refreshing to see some analysis that is willing to examine other pieces of the puzzle.

Bravo, professor! Bravo!

Advertisements

One thought on “Puttin’ on the Ritz

  1. Randy- Great post and a real concern. We should all be asking how a not for profit can acquire a BILLION dollars in assets and maintain it’s NFP status. Harvard and others recently increased the disbursement of their Billion dollar endowments when they risked losing their NFP status. The playing field needs to be leveled.
    The comment on jobs, however, sends the wrong message. Jobs may be cut because of the acquisitions. Maine Health acquired SMMC and Goodall in York County. Does each hospital need to maintain their own business functions such as HR, Accounting, etc? That would not make good business sense. The comment about job losses implies greed. It makes for a great headline “Evil Empire Slashes Jobs” but it missed the target.
    A great discussion would be about ways to reduce costs. Does every patient need a specialist? Hospitals built expensive MRI centers to increase profitability and providers are directing patients there. Does every ache warrant an MRI first? Doubt it but a thorough physical, PT and exercise generates less revenue than the MRI and a follow up with a specialist.

    Like

What do you think?

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s