Pay for 9 Treasure Valley nonprofit hospital employees hits or tops $1 million

St. Luke’s and Saint Alphonsus health systems both reported paying their CEOs $1.1 million in fiscal year 2014 — two of the nine employees whose total compensation for that year hit the $1 million mark.

Surgeons took the lead for compensation by Idaho’s two big nonprofit hospital systems, beating cancer doctors and urologists. And four Saint Alphonsus hospital CEOs received raises of 24 percent to 42 percent, as the system underwent a restructuring and its top executives took on more responsibility.

Neurosurgeon Christian Zimmerman, of Saint Alphonsus Regional Medical Center, has long been the highest-paid physician at a local nonprofit hospital. He kept that spot in 2014.

Ranking below Zimmerman for highest total pay are St. Luke’s surgeons. All five of the surgeons listed for St. Luke’s Regional Medical Center in the latest tax returns made more than $1 million.

St. Luke’s CEO David Pate topped the executive list, as he did last year. Sally Jeffcoat, who was CEO of Saint Alphonsus Health System for all of the fiscal year, earned less than Pate but was in the process of being promoted to a regional leadership job within CHE Trinity, the organization that operates Saint Alphonsus. That boosted her pay about 35 percent, mostly in the form of a $450,000 bonus.

With her promotion, Rodney Reider was promoted to CEO of Saint Alphonsus. That promotion and the additional responsibility came with a 42 percent raise — the highest overall pay increase of anyone listed in the latest federal tax returns filed by the Boise-based health systems, which were for fiscal years ending in 2014.

As large nonprofits exempt from federal income taxes, the health systems are required to make their IRS Form 990 tax returns available for public inspection and to include compensation of their officers and top five highest-paid employees earning $100,000 or more.

ZIMMERMAN’S PAY FALLS

Several physicians beat out their hospitals’ executives to take the spots of highest-paid employees.

Neurosurgeon Zimmerman had a 3.8 percent decrease in pay, an indication of how health care is changing, said Blaine Petersen, chief financial officer of Saint Alphonsus Health System.

Zimmerman performs many surgeries, Petersen said. But private and government health insurers are making good on their promise to pay for quality instead of just paying by number of procedures.

The ultimate goal is to pay primary care doctors more and pay specialists less, he said.

“I think that’s the biggest change going forward” in hospital pay, he said. “I think the industry is trying to reward primary care better. Admittedly, we’re still not there as an industry. ... Primary care physicians would probably still say they aren’t paid enough, and they probably aren’t.”

Surgeons are required to be paid “at market levels,” said St. Luke’s Health System Chief Financial Officer Jeff Taylor. “The compensation amounts you see here would be consistent with the market, and at amounts that would have been consistent with when those physicians were in independent practice.”

Independent doctors are not required by federal law — as nonprofit hospitals are — to disclose their salaries on publicly available forms.

PRIMARY CARE DOCS DON’T MAKE LIST

The returns rarely include internists, OB/GYNs, family doctors and other primary care providers because they don’t rank among the highest-paid employees.

Petersen said Saint Alphonsus might pay each doctor differently, depending on what his or her contract says. But the hospital system is now trying write a pay-for-quality component into its contracts with doctors.

“Up to 20 percent of pay can be for quality,” especially for primary care doctors, Petersen said.

EXECUTIVES MUST REACH TARGETS

Executives also can lose pay if they do not hit certain targets — even in areas they do not directly touch. One-fourth of Petersen’s “at-risk” compensation is based on the quality of medical care at Saint Alphonsus.

St. Luke’s CFO Jeff Taylor said his system also pays its executives and doctors based on performances. Instead of rewarding good work with bonuses, St. Luke’s generally builds that into a person’s base salary.

Almost all of the top-paid executives at St. Luke’s in fiscal year 2014 received a base-salary increase from the previous year.

One exception is at the Mountain States Tumor Institute, St. Luke’s cancer care center. Five of MSTI’s top-paid physicians received between 8 percent and 16 percent of their compensation as bonuses.

Those doctors had “enough activity that invokes a provision of the contract to require additional payment,” according to an email from St. Luke’s.

MORE CHANGES IN SAINT AL’S LEADERS

The Saint Alphonsus system also finished a reorganization of its western Treasure Valley operations. Saint Alphonsus combined its Ontario and Nampa operations, with Nampa’s leaders now overseeing the hospitals and clinics in the Ontario area. Karl Keeler, now CEO for both Nampa and Ontario, received a raise and a bonus that nearly doubled his pay. His total compensation to run both hospitals was marginally higher than what Saint Alphonsus had been paying the former Ontario CEO.

This story was originally published February 29, 2016 at 5:46 PM with the headline "Pay for 9 Treasure Valley nonprofit hospital employees hits or tops $1 million."