New York slashes hospital spending, but can't touch multimillion-dollar CEO paychecks

As New York's health care system slashes spending by charging more to be unwell and providing fewer services to disabled people, one area of costs is off-limits: multimillion-dollar compensation for hospital executives. The best-paid hospital CEOs are paid nearly 10 million dollar a year (and compensation packages for CEOs are on the rise). When an advocacy group mooted the possibility of caps on executive pay, they were outmaneuvered by lobbyists who ensured that the salaries for top administrators would not be considered in efforts to balance the budgets.

A Health Department spokesperson says that the state can't set compensation levels (or even advise on them) for private businesses, even when those businesses are financed at public expense, which means that no matter how much of a hospital's budget comes from Medicaid and Medicare, CEOs' salaries can't be touched by regulators. The NYT cites the example of Greenwich Village's St. Vincent's Hospital Manhattan, which received large public contributions but went bankrupt anyway, due to mismanagement from administrators — the top ten of whom took home $6 million in pay in the hospital's last year.

At Bronx-Lebanon, a hospital that exists only by the grace and taxed fortunes of the people of New York State, the chief executive was paid $4.8 million in 2007 and $3.6 million in 2008, records show. At NewYork-Presbyterian, a hospital system that receives nearly half a billion dollars annually in public money, the chief executive was paid $9.8 million in 2007 and $2.8 million in 2008…

A proposal to allow public financing for only the first $1 million in wages for an executive died before it even reached the task force. "It was classic how it was killed," said Judy Wessler, director of the Commission on the Public's Health System, an advocacy group that had suggested the limits.

"We submitted the proposal in writing, met with the state staff members about it, then testified for our two minutes at a hearing," Ms. Wessler said. "Then in the written summary of all the 4,000 proposals, they twisted the wording of ours so that it would be impossible to implement. Then they said it was not viable, so it wasn't even put up for a vote."