Last month, executives at Denver Health received bonuses of up to $230,000, just days after asking their hospital workers to reduce their hours or take time off. At the University of Kentucky—which boasts some of the highest paid administrators in the country—the college president has refused to take a pay cut, despite furloughing 1,500 medical workers. And executives at McLaren Health Care in Michigan have agreed to cut their salaries by just 2 percent—an amount employees facing furloughs called “a slap in the face.”
“These people are making millions of dollars and they're going to give 2 percent back?” said Jeff Morawski, a registered nurse at McLaren Macomb. “I think it’s a joke. I think it’s a slap in the face... They’re not walking into the hospital every day as a frontline worker.”
Hospital CEO salaries have been ballooning for years. According to a study published in
Clinical Orthopaedics and Related Research, the average hospital CEO’s salary increased 93 percent in the decade between 2005 and 2015. In the same time frame, the average health-care worker’s salary increased just 8 percent. The average hospital CEO made $3.1 million dollars a year in 2015, according to the study. The average nurse, meanwhile, made $75,510.
At the University of Kentucky, which oversees the UK HealthCare system, President Eli Capilouto is the fourth highest-paid college president in the country. Capilouto made more than $1.5 million from base salary and other benefits in 2018, according to the
Chronicle of Higher Education. Executive Vice President of Health Affairs Mark Newman was just behind him, with more than $1.4 million in yearly earnings. (The president of the nearby University of Louisville, for comparison, makes
$875,000 a year.)
Amid the coronavirus crisis, the University of Kentucky is projecting a $70 million budget shortfall. And that doesn’t include lost revenue at UK hospitals and clinics, where outpatient visits are down 45 percent and inpatient visits are down 34 percent. Between the reduced patient volumes, additional spending on testing and protective gear, and estimated investment losses, UK HealthCare is projecting $160 million in losses due to COVID-19.
Hospitals around the country have seen a decline in revenue due to restrictions on elective procedures, which can generate up to 80 or 90 percent of some hospitals’ income. (Even in the epicenter of the pandemic, academic hospital systems in New York City have reported up to
$450 million in losses.) Because of this, executives at some hospitals have agreed to reduce their salaries—or even forgo them completely—while the crisis persists.
But administrators at the University of Kentucky have agreed to no such cuts. Instead, Capilouto
announced furloughs of 1,500 health-care workers and another 200 university staff last week. Some employees are being furloughed for as little as a week, while others will not be paid for more than two months. The university is also temporarily suspending new hires, freezing merit raises, and cutting retirement contributions in half for the rest of the year.
“They’re asking for sacrifices from people least able to make them,” said Megan Parker, a Ph.D. candidate at UK, in a press release circulated by a group of frustrated university students, workers and community members. “Basically, we are supposed to accept that sacrifices have to be made, but they are expecting these sacrifices from people unable to make significant contributions.”
Zeke Perkins, a graduate instructor at the university, told The Daily Beast that more than 100 people had signed onto a letter calling for an end to the furloughs.
“We’ve been calling on the administration to provide for those who make the least and take cuts themselves,” Perkins said. “They could cut their salaries significantly and save hundreds of jobs.”
Of Capilouto, he added, “You could easily cut [his] salary in half, cut it down to $100,000 and he’s still fine. He can still go put his food in a refrigerator, and the rest of us are basically scrounging for enough to get by.”
In a statement, university spokesperson Jay Blanton said budget officials conducted “a lot of analysis of different scenarios” before landing on the furloughs and benefit reductions for workers.
“If you cut pay, it’s essentially a double hit to people,” he said. “You are impacting pay and benefits. We took the step of reducing benefits first. We hope this series of steps we are taking gets us where we need to be, even as we know additional steps might be necessary in what remains a very fluid and tough environment.”
Organizers in Michigan are also fighting back against top executives at McLaren Health Care, who have furloughed workers in several of their 14 hospitals across the state. Anger about the furloughs only increased last week, when a local ABC affiliate
revealed that executives were reducing their own salaries by just 2 percent—the equivalent of one week’s lost work. (According to tax filings, CEO Philip A. Incarnati alone made $6.8 million in 2018.)
Christie Serniak, a nurse at McLaren Central, told The Daily Beast that “adequate reductions” in executives’ salaries could not only mitigate the furloughs, but help pay for protective gear for frontline workers. Union leaders are
calling on the health-care system to cap executives’ pay at $1 million for the year—a move they say would save $8 million to reinvest in frontline staff.
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