published Tuesday, January 25th, 2011

Erlanger awards bonus payouts

by Emily Bregel

Erlanger Health System executives took home bigger bonuses in December compared with the awards paid out the year before, despite recording lower profits.

In December, 123 management-level Erlanger employees split $1.9 million in bonus payments, $200,000 more than the total awarded in bonuses in fiscal year 2009.

President and CEO Jim Brexler received a $192,395 bonus in December on top of his base salary of $550,000.

The payments were based on the hospital's performance in fiscal year 2010, which ended in June of last year. The hospital's operating profit of $8.58 million, and other performance measurements that year, met pre-established criteria approved by the hospital's board of trustees.

In fiscal year 2009, the hospital had an operating profit of $10.8 million, and bonus payments totaled $1.7 million.

But faced with more stringent requirements to earn bonuses, managers now may have more trouble achieving the incentive payments this year.

New bonus standards stipulate the hospital must bring in a minimum operating profit of $12 million for bonuses to even be considered.

"It may very well be that there may be a long dry spell" before bonuses are awarded again, said new board member Dr. Phyllis Miller, a Chattanooga obstetrician-gynecologist and former chief of staff at Erlanger, in a recent interview.

Fiscal year to date, Erlanger has earned a $1.3 million profit, compared with a budgeted $6 million profit, according to financial statements released at the hospital's Budget and Finance Committee Monday.


The top 10 bonuses awarded this winter at Erlanger, based on fiscal year 2010 performance, are:

Jim Brexler: $192,395

Charlesetta Woodard-Thompson: $56,748

Dr. Cyrus Huffman: $54,046

Dale Hetzler: $47,740

Britt Tabor: $40,643

Alana Sullivan: $38,552

Lynn Whisman: $36,929

Roger Forgey: $34,238

Gregg Gentry: $33,484

Joe Winick: $31,967

Source: Erlanger Health System

That doesn't include $1.3 million in trauma funding and $2.3 million state disproportional share funding -- money given to hospitals that treat a disproportionate number of TennCare patients -- that the hospital expects to receive later this fiscal year, said Chief Financial Officer Britt Tabor.

In December alone, Erlanger brought in a $1.6 million profit, according to financial statements.

One month before announcing the bonus awards, Erlanger implemented 2 percent across-the-board pay raises for its 4,200 employees, totaling $4 million. The raise excluded 17 executive-level managers, from the vice president level up, officials said.

Hospital trustees maintain that the hospital's performance in fiscal year 2010 warrants recognition.

"It takes a real expertise to deal in health care. ... Just to make any positive operating margin is great," said Kim White, an Erlanger trustee and chairwoman of Erlanger's Management and Board Evaluation Committee, which sets the criteria that determines whether bonus pay will be awarded and how much.

"It's tough for people who don't have jobs to look at bonuses, but we look at this as a piece of their total compensation package. There's been years they haven't made any bonuses," she said.

Erlanger's executive pay and bonus package ranks in the 65th percentile compared to other comparably sized hospitals, White said.

New criteria laid out last year by the hospital's Management and Board Evaluation Committee will make it more difficult for managers to earn bonus pay after the end of the current fiscal year in June by setting more aggressive goals.

"The board made the decision to raise the bar," said Gregg Gentry, senior vice president for human resources at Erlanger. "The criteria continues to be more challenging."

The new criteria put more weight on the hospital's performance in quality measures such as surgical infections rates, while the hospital's operating margin will be used to determine 30 percent of bonus payments, Gentry said. Operating margin used to be weighted at 35 percent of the payments.

about Emily Bregel...

Health care reporter Emily Bregel has worked at the Chattanooga Times Free Press since July 2006. She previously covered banking and wrote for the Life section. Emily, a native of Baltimore, Md., earned a bachelor’s degree in American Studies from Columbia University. She received a first-place award for feature writing from the East Tennessee Society of Professional Journalists’ Golden Press Card Contest for a 2009 article about a boy with a congenital heart defect. She ...

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dendod said...

Print this article and tape it to your refrigerator for reference the next time Erlanger comes to the public "crying" about needing money.

January 25, 2011 at 9:15 a.m.
xnykr35 said...

Glad they are turning a profit. however, I would bet I is a lot easier when you receive funding for indigent care that the other 2 systems do not get then fail to provide that care in the referral arena. Hmm....smells like fraud and stealing to me. I know it's hard to orchestrate that care but if you do not want to do it simply do not cash the checks!

January 25, 2011 at 2:41 p.m.
harrystatel said...

Non-profits pay well, don't they? So the next time you see smiling Jimmy Brexler, give him the wave and think about your tax money in his wallet.

January 25, 2011 at 2:49 p.m.
jpo3136 said...

What an excellent opportunity to donate $10K to $50K to the city and county funds for providing medical care to the homeless.

Those high salaries are the result of an out of control spending system which starts people's careers by placing them hundreds of thousands of dollars in debt. It only gets worse after that. As citizens and patients, we lose.

We need to put a stop to this out of control health care spending by providing medical school pro-bono for UT Med students who go to our schools for 75% or more of their education, and who stay in our state, actively practicing medicine for 10 years.

When our health care education system starts off people's careers by putting doctors under water to the tune of a house purchase for every year of their medical schooling, then we are creating a system that will demand high financing for the group.

We have seen how those bulk, high finance needs have created corrupt and fictional financing deals which have so hurt our own people and local economy.

To insulate ourselves from those poor practices, we need to stop excessive spending before it starts by not billing any doctors or nurses for their medical education.

To keep that practice honest, we need to institute and maintain a reasonable payback system that negates the influence that finance and insurance have over the payment system.

We need to take charge and set the rates by producing hundreds of debt-free doctors and nurses every year.

January 25, 2011 at 8:55 p.m.
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