I read with interest the story on the retirement of Joseph Trunfio as CEO of the Atlantic Health System. Of particular note was the reference to his salary: reportedly $10.69 million for the year 2012.
Granted, running a large health care system with all its inpatient and outpatient centers is a big job. But so, I believe, is running the United States of America. And President Obama, whose salary is set by law, gets $400,000 (plus benefits like free housing in a mansion and use of Air Force 1).
The governor of the state of New Jersey also has a pretty big job with lots of components, and according to the state website, he only gets $157,000.
Nor is Dr. Trunfio alone among health care administrators in receiving generous compensation. According to NJ.Biz.com, which cited salaries in the reports not-for-profits must file with the IRS, New Jersey hospital CEOs make between $1 million and $3 million a year.
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Note the words “not-for-profit.” Almost all hospitals in New Jersey, including Atlantic Health, are non-profit.
Atlantic Health trustees have said that Dr. Trunfio’s high salary was the result of delayed compensation. But whatever the reason, someone has to pay it. And in health care, as in government, the payees are taxpayers, in this case taxpayers we call “patients.”
Patient pay a fee every time they use the emergency room, have surgery or a baby or any other service. They pay their own charges either directly or through an insurance plan and help pay for others through tax-supported Medicare and Medicaid.
These patient fees constitute the health system’s chief source of revenue. And salaries — for nurses, for lab techs and yes, for the CEO — are the major expense in health care. And of course, the higher the costs, the higher the fees must be to cover them.
In a time when every dollar spent on health care is under the microscope, there has been remarkably little said about what is a fair salary for the people who are responsible for running it.
What is the right compensation for the CEO — and for that matter all of the members of the administrative staff? What do they add, if anything, to the costs of care.?
Is there something in the many, many pages of the Affordable Health Care Act that talks about what constitutes affordable administrators’ salaries? Does anyone know?
Date: October 10, 2014
