Today the Winston-Salem Journal published the last article in a three-part series on the two major nonprofit health care systems in the Winston-Salem area, Novant and Wake Forest Baptist Medical Center, and this particular installment focused on executive compensation. Here's an excerpt from the article:
Dr. Roy Poses, a clinical associate professor of medicine at Brown University and former physician at three academic medical centers, writes a blog called "Health Care Renewal" in which he frequently tackles the issue of executive compensation…
"The same rationales are cited to justify their treatment — executives are said to have very difficult jobs, and competitive pay is necessary to hire the brilliant people required.
"Left unsaid, however, is how difficult these managerial positions are in comparison to the demanding work and sometimes life-or-death responsibilities of health professionals, how brilliant executives are in comparison to such well-trained professionals, and why the executives deserve competitive pay when other employees may be laid off." (Emphasis mine).
Later in the morning Novant made the following announcement:
Carl Armato, president and chief executive of Novant, said in a memo to employees that the system is eliminating 82 management positions and 207 staff positions, effective immediately. The majority of the eliminated positions are in Novant's Winston-Salem and Charlotte markets…
Armato said there are four main reasons behind the decision.
"We all know there's a national mandate to lower what our nation spends on health care and to make care more affordable," Armato said…
"The poor economy has clearly changed people's behaviors and they are using fewer health-care services, including elective surgeries and outpatient testing, such as diagnostic imaging."
Armato said Medicaid and Medicare reimbursement for services "is dramatically declining. Put simply, we are being paid less for our services and this trend will unfortunately not improve.
"The amount of charity care we provide has increased 200 percent over the past five years.
Pretty nice juxtaposition huh?
Question: If you had to guess, what would you say the odds are that Mr. Amato showed some leadership by taking a voluntary reduction in pay, or even a pay freeze, before deciding to seriously screw with 289 people's lives by laying them off?