Missouri Hospital CEOs See Pay Hikes

For all the talk about cutting costs in the health care industry these days, one cost continues to climb: the compensation for chief executives at Missouri’s largest nonprofit hospitals.

Missouri Business Alert looked at the latest financial reports to the Internal Revenue Service, Form 990s, filed for fiscal 2011 by Missouri’s 20 largest nonprofit  hospitals, measured by number of beds. Some of the hospitals are owned by larger hospital systems, and the results are skewed by two retiring hospital CEOs who were well ahead of the pack in compensation.

Graphic by Evan Townsend and Jaime Williams
Graphic by Evan Townsend and Jaime Williams

Heartland Regional Medical Center in St. Joseph gave outgoing CEO Lowell Kruse a post-retirement base salary of $9,000 plus $14.5 million in retirement benefits. The payment represented a one-time lump sum payout of Kruse’s defined benefit retirement plan, according to the Carol Roever, chair of the Heartland board of trustees, and John Wilson, Heartland’s chief financial officer.

Kruse retired at the end of February 2010 after a 25-year career at Heartland. The hospital’s Form 990 for fiscal 2010 listed Kruse’s salary as about $850,000 and also listed an additional $4.2 million in deferred compensation; hospital officials said the latter was part of the $14.5 million in retirement money paid the following year.

Lowell Kruse, former CEO of Heartland Regional Medical Center | Photo courtesy of Healthcare Compass
Lowell Kruse | Photo courtesy of Healthcare Compass

Dr. Mark Laney succeeded Kruse as Heartland’s CEO. Laney, in contrast, earned $860,000 in fiscal 2011 and $978,000 in fiscal 2012.

Heartland reported about $538 million in revenue in 2011. It has 393 beds, according to the Missouri Department of Health and Senior Services, which puts it near the bottom of the list of the state’s 20 largest hospitals.

Coming in second in total pay for fiscal 2011 was G. Richard Hastings, who received $8.3 million from  St. Luke’s Health System of Kansas City. Hastings received about $710,000 in salary and bonuses, plus another $7.4 million in “other compensation.” Hastings retired in July 2011 after a 35-year career at St. Luke’s.

The deferred earned compensation and retirement severance “is not reflective of the health system CEO’s annual salary,” according to Laurel A. Gifford, director of media relations for St. Luke’s. Hastings received $2.1 million in total compensation in 2010, including $170,000 in retirement and deferred compensation.

St. Luke’s Health System has 11 hospitals in northwest Missouri and northeast Kansas. It reported revenue of $1.1 billion for 2011, according to hospital officials.

Anthony Tersigni, CEO of Ascension Health | Photo courtesy of Ascension Health
Anthony Tersigni | Photo courtesy of Ascension Health

Anthony Tersigni, the CEO of Ascension Health Alliance, is next on the list. He received $3.4 million in fiscal 2010, $3.6 million in 2011 and $4 million in total compensation in fiscal 2012. (Not all hospitals have released 2012 figures.)

Ascension, based in Edmundson, owns the nation’s largest Catholic nonprofit hospital network. It operates 80 hospitals in 20 states. Ascension reported revenue of $16.6 billion in 2012.

Steven Lipstein, the CEO of the BJC Healthcare in St. Louis, received $3.3 million in total compensation in fiscal 2011.

Lipstein’s total pay included deferred compensation from previous years. It represents his management of a large health system with 13 hospitals and 27,000 employees, according to June Fowler, BJC’s vice president in charge of communications. BJC had $3.6 billion in revenue in 2011.

Lipstien’s total compensation was up 40 percent from $2.3 million in 2010.

University of Missouri Health Care, a much smaller health care system, paid James Ross $518,000 in 2010 and $533,000 in fiscal 2011 and 2012, when he was still the CEO. The teaching hospital has 307 beds and reported $616 million in revenue in 2011.

Here is a look at what CEO’s of some of the state’s other 20 largest nonprofit hospitals made in fiscal 2010 and 2011:

  • William P. Thompson, SSM Healthcare (St. Louis) – $1.8 million; $2.3 million
  • Steve C. Bjelich, St. Francis (Cape Girardeau) –  $810,000; $870,000
  • Gary D. Duncan, Freeman Health System (Joplin) – $728,000/$958,000
  • Sandra AJ Lawrence, Children’s Mercy Hospital (Kansas City) – $599,000; $608,000
  • Scott R. Reynolds, Mercy Hospital (Springfield) $295,000; $350,000

 

Correction: Nov. 22, 2013

This story was updated to reflect Missouri Business Alert’s use of Form 990s in its reporting. A previous version of the story incorrectly stated Form 1099s were used.


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