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How KUOW Got This Story: Hospital Executive Pay Under State Scrutiny

John Ryan
02/09/2011

Internal Revenue Service filings and other public records indicate that 15 hospital executives and 9 hospital physicians in Washington state earned at least $1 million in 2009. Another 57 hospital employees reported earning at least $500,000 that year. KUOW found the pay packages at the state's major nonprofit hospitals by examining their IRS 990 informational tax returns. We also filed public records requests to get comparable figures from government–run hospitals.

We examined all non–military hospitals in Washington with at least $250 million in revenue. But we're unable to tell you what all of their top executives made.

Three for–profit hospitals — Auburn Regional Medical Center, Deaconess Medical Center and Yakima Regional Medical Center — would not disclose their executive compensation. Their parent companies, however, are required to report executive earnings to the US Securities and Exchange Commission (in a long, dense document called a 14A Definitive Proxy Statement).

Auburn's parent company, Pennsylvania–based Universal Health Services, paid CEO Alan Miller $12 million in 2009. Deaconess Medical Center in Spokane is owned by a Tennessee firm called Community Health Services Systems (CHS). Despite its grassroots–sounding name, CHS describes itself as the largest publicly traded hospital company in America. CHS paid its CEO, Wayne Smith, $17.8 million in 2009. Yakima Regional's parent company, Florida–based Health Management Associates, paid CEO Gary Newsome $4.3 million that year.

Some data gaps remain in KUOW's list of Washington's million–dollar hospital executives. These omissions stem from incomes that fell below the IRS reporting threshold, individuals who were not employed at the hospital that year and hospitals that have not yet disclosed that data. Some hospitals still have not filed their IRS 990 forms for 2009. The University of Washington had not fulfilled KUOW's records requests by our broadcast deadline. We will update the list as information comes in.

The figures include hospital salaries, bonuses, benefits, expense accounts, deferred compensation and payouts of retirement plans as reported to the IRS or as disclosed in public records requests. Some hospitals report executive retirement benefits in both the year they were accrued and the year they were paid out.

All nonprofit groups are required to file 990 forms with the IRS. They are also required to provide them to anyone who asks to see them. KUOW obtained some hospitals' forms at www2.guidestar.org. That website provides free access to thousands of charity groups' financial documents. More recent records are often available from the hospitals themselves.

© Copyright 2011, KUOW

[Ed.: The original version of this story misstated Community Health Systems' name. (3/2/2011)]



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