Treasurer Folwell criticizes nonprofit hospitals after report shows over $1.75 billion paid to top executives over 11 years
WILMINGTON, N.C. (WECT) - State Treasurer Dale Folwell held a press conference on Wednesday critiquing the ‘extravagant’ executive pay for nonprofit hospitals in North Carolina; over $1.75 billion was paid to top executives from 2010 to 2021.
Folwell is citing a new report from the NC State Health Plan for Teachers and State Employees, Rice University’s Baker School for Public Policy and Johns Hopkins University of Bloomberg School of Public Health.
The report says former New Hanover Regional Medical Center CEO John Gizdic collected $1.74 million from Novant Health after it bought the hospital. Gizdic collected an $897,000 salary in 2017, but more recent data isn’t available. The lack of available financial data for these hospitals is a point stressed by the report and Folwell.
“It is unclear whether Gizdic benefited from bonuses or incentive payments tied to the merger because the hospital refused to release this information to the press. Like Atrium and UNC Health, New Hanover can exploit a legal loophole that allows publicly-owned hospitals to hide its tax filings from the public,” the report states.
The North Carolina Healthcare Association released a statement on Folwell’s press conference statements.
“It is interesting timing that the Treasurer is pushing a narrative about health system executive leaders’ compensation on the same day that hospital leaders are gathering to start our annual Winter Meeting. While they are discussing how to make high-quality healthcare more equitable, affordable, transparent, and accessible for North Carolinians, the Treasurer opines without offering any actual solutions,” Steve Lawler, president and CEO of the North Carolina Healthcare Association said in the statement.
A Novant Health spokesperson shared the full statement and said that Novant Health is in support of the NCHA’s position.
In the same period, CEOs got $209 million, while nurse and physician wages have far risen slower than executive pay. The nine largest nonprofit hospital systems in the state paid $38.7 million to 11 current or former CEOs in 2019, which is enough to pay for about 572 registered nurses, according to the report.
“Most hospital executives didn’t even cut their own pay. Instead, these systems grabbed millions of taxpayer-funded COVID relief dollars that were meant for struggling hospitals — and then gave their executives a pay raise,” Folwell said.
Nonprofit hospitals received over $1.8 billion in tax breaks in 2020 according to peer-reviewed reports that the treasurer commissioned, but Folwell’s office says that most of the hospitals didn’t justify these breaks with an equal level of charity care.
“Lack of transparency on definitions and spending creates a wide variation across nonprofit hospitals in the amount of tax benefit and charity care/community benefits. A new standard is needed,” said Dr. Ge Bai, a professor at the John Hopkins Bloomberg School of Public Health.
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