Hospital CEOs Got Richer as Nurses Faced Pay Cuts, Layoffs and Risked Their Lives
We’ve heard the refrain countless times throughout the COVID-19 pandemic that healthcare workers are heroes. And while they certainly are, it appears that they haven’t exactly been getting hero-worthy pay.
An explosive new analysis by the New York Times has revealed frustrating findings about how federal aid to hospitals continued to keep exec’s pockets lined--while nursing staff and other workers were forced to accept pay freezes or be furloughed.
Billions in Bailouts
According to the NYT report, 60 of the country’s largest hospital chains--which include organizations such as the Mayo Clinic and HCA Healthcare--received more than $15 billion in emergency funding through the federal CARES act, enacted as an economic stimulus package during the pandemic.
Many of the healthcare groups, such as Providence Health System, accepted the money, even while sitting on their own hoards of cash that they regularly invest in Wall Street stock to garner even more profit. Providence, for instance, earned $1 billion in investment profits in 2019 alone. Those cash reserves are there supposedly to help the healthcare organizations in the event of emergencies--say, like a worldwide pandemic?--but they were still able to receive federal money in staggering amounts.
And although, of course, we want to ensure our hospitals and healthcare facilities have the resources they need to care for patients, the apparent problem is that while some hospitals claimed they didn’t have money to keep all of their staff, supply adequate PPE, or pay crisis rates, they had no problem keeping their execs’ paychecks coming.
As the NYT noted, the five highest-paid officials at each large hospital chain received about $874 million in pay last year alone. And while one could argue that high pay for execs is the norm, there is certainly nothing “normal” about some of the conditions that nurses have been expected to accept--such as facing a life-threatening pandemic without feeling adequately protected.
Only one week after receiving $1 billion in bailout money and continuing to pay their executives millions--read that again, it’s plural, as in multiple million-dollar salaries--HCA also threatened to lay off thousands of their staff nurses if they did not agree to pay freezes and wage concessions.
The Burden on Low-Paid Hospital Workers
It probably goes without saying why hospital workers--including nurses, doctors, janitorial and housekeeping staff are frustrated by the revelation of this news. Because as essential workers were forced to do more work with less pay or resources, hospital executives who were safely away from the physical threat of the virus did not feel the same economic impact.
So, who exactly is entitled to that bailout money? The frontline workers, or preserving the “cash reserve” of the hospitals to weather another potential storm? And further complicating the situation is that the amount of money a hospital received was based on its average revenue, not the actual need--so hospitals with enough funds to invest, for instance, actually received more money than low-revenue rural hospitals with staff living paycheck-to-paycheck or patients who are largely uninsured.
Assuming the bailout money was to be used to help healthcare workers, some are voicing their dissent that instead of funding nurses and other healthcare providers who were furloughed, laid off, had their contracts cancelled or were not given hazard pay, the money was used elsewhere. Side note, the funds did prohibit paying exec salaries out of it, but didn’t restrict “bonuses” from the money.
“We need to demand that everyone who was laid off gets their jobs back,” read one tweet. “Were these ‘top executives’ on the front lines...risking their lives and their families in order to help people with #covid19? No. #hospitalbailout #givebackthemoney @nytimes @CNN @MSNBC ask these questions”
How Hospital Execs are Responding
In response to the financial revelations, the NYT reported that some executives have taken “modest” pay cuts, although the specifics of those numbers are not clear.
Additionally, even executives who have made public statements about donating back some of their salary aren’t providing the full picture. When you do the math on the whole pay package including stocks and other assets for one executive, for instance, who is donating half of his salary for six months--it only comes out to 1.5% of his actual compensation.
Other healthcare organizations are proactively announcing pay cuts of top staff with the intent of assisting with workers who were furloughed. For instance, ThedaCare physician and advanced practice clinicians announced they would be taking a 10% pay cut, while their CEO, Imran A. Andrabi, MD, ThedaCare president and CEO will take a 50% cut, and its other healthcare executive leaders will be taking a 40% cut.
The cuts, they hope, will ensure that no layoffs will be needed to cover their projected $70 million revenue loss.