Hospitals serve a vital role in any community, providing life-saving care to the injured and ill while contributing significant dollars and hours to community service. For example, an article in yesterday’s Charleston Daily Mail proclaims that the Charleston Area Medical Center (CAMC) “reports $115 million in area benefit” in 2012. These benefits included training classes for hospitals and clinicians around the state, charity care, and other community health improvement services.
On top of that, hospitals also tend to be huge economic drivers, often being the largest employers in a region, providing good paying jobs that stimulate the local economy. Most hospitals in West Virginia are also non-profit, meaning they are not required to pay most federal, state, or local taxes. As non-profits, they do not answer to a Board of Shareholders or need to worry about their stock prices or quarterly dividend payments, however, that doesn’t mean they have no concern about their bottom line.
The 10 largest non-profit hospitals in West Virginia generated a combined $3.4 billion in gross revenue in 2011.
Source: IRS 990 filings, accessed at www.guidestar.org, 2011 most recent year for which reports were available. Princeton Community Hospital information provided by PCH Financial Department.
Of that $3.4 billion in total revenue, $227 million was net profit after all expenses, which includes salaries, charity care, bad debt, operating costs, and everything else.
Source: IRS 990 filings, accessed at www.guidestar.org, 2011 most recent year for which reports were available. Princeton Community Hospital information provided by PCH Financial Department.
Running a large hospital is certainly a daunting challenge, which means that hospital CEOs and other administrators are often well compensated. For better or worse, most of these CEOs have backgrounds in business management with no clinical experience as physicians or nurses. The total compensation in 2011 for the CEOs of the largest non-profits in West Virginia is found in the chart below.
Source: IRS 990 filings, accessed at www.guidestar.org, 2011 most recent year for which reports were available.
*Wheeling Hospital CEO Ronald Violi is paid as a contract employee through his consulting firm R&V Associates. Wheeling Hospital states his salary as CEO was $1,155,000 in 2011, however his firm received total compensation of $3,529,030 directly from the hospital, for “services as CEO and other consulting services.”
