Nonprofit CEO compensation: Much ado about not much

The Sunday Boston Globe (Leading nonprofit jobs hold big perks) was as predictable as it was misguided. Here’s the juicy lead:

They are not only well-paid, but many receive an array of generous perks — housing allowances, home loans, club dues, and free travel for spouses. One was awarded a quarter-million dollars in retention bonuses. Another is reimbursed for his children’s college tuition.

Exhibit A is the president of the Museum of Science. He’s the one who’s reimbursed for his kids’ tuition. But wait, it turns out he worked for 10 years as a dean at Tufts, where free tuition is a standard part of the package, and the MoS simply matched this perk to lure him away. His whole compensation of $509,000 includes two tuitions plus a gross-up to cover the taxes. That benefit will end once his daughters are done with school.

I’m not afraid to say it: Mid-to-high six-figure compensation is not too high for leaders of large nonprofits such as the Museum of Science, Museum of Fine Arts and the Boston Symphony Orchestra. And it makes sense to tailor perks to the needs of the organizations and of the executives.

Many moderately successful, mid-level people in professional services in Boston make as much as these leaders. And many professional services partners, for-profit managers, and entrepreneurs make a lot more. Unlike the non-profit leaders, most folks in the private sector generally do not have their compensation disclosed.

It’s fine to scrutinize compensation packages, but if these are the most egregious examples the Globe could find then I suggest the story did not merit top billing it received.

By healthcare business consultant David E. Williams, president of Health Business Group.


Health equity and total cost of care: Any connection?

I recently interviewed Minnesota Community Measurement’s Jim Chase about two new reports: Total Cost of Care and Health Inequities based on race, ethnicity, language and country of origin. As Jim mentioned when I asked, these are two separate projects with no explicit linkage.

But after some further pondering, he and I both think that the intersection of the two topics raises interesting questions. In particular:

  • Are the poor outcomes of certain groups associated with high costs or are poor results driven by some populations accessing fewer services?

This would be a very interesting question to explore, and since Minnesota has already collected the data it should be straightforward to analyze.

Is anyone out there interested in funding a study like this? Please contact me if so.

By healthcare business consultant David E. Williams, president of Health Business Group.

The urban asthma myth


Everyone knows that asthma rates are highest among low-income urban populations, right? Turns out that conventional wisdom may just be wrong. Michael Segal MD PhD pointed me to the following LA Times article (Researchers debunk the idea that asthma is more common in inner cities)

For more than 50 years, the conventional wisdom about asthma has been that it thrives in poor, densely populated urban areas. Researchers have even gone so far as to declare an “inner-city asthma epidemic.” But they’ve never actually checked whether asthma is more common in city centers than in suburbs or rural areas.

Until now.

A study published this week in the Journal of Allergy and Clinical Immunology compared asthma rates among children in census tracts across the country and found that kids in inner-city neighborhoods were no more likely to have asthma than kids who live elsewhere.

In fact, the researchers found that medium-sized cities in the Northeast and Midwest along with suburban neighborhoods in the Northeast had higher asthma prevalence than inner-city neighborhoods in any part of the country. A child’s neighborhood type didn’t matter so much as his or her racial, ethnic and socioeconomic factors.

Puerto Rican children had the highest prevalence of asthma (19.8%) among all the racial and ethnic groups in the study, followed by African American children (17.1%). The lowest prevalence was seen among Asian American children (8.1%), non-Puerto Rican Latino children (8.8%) and white children (9.6%).

Dr. Segal adds:

It is possible that certain ethnic groups are more susceptible genetically, but as detailed at I’d bet that the differences are attributable to indoor air pollution due to scented products.  Gas stoves may be important too, but I don’t know if that correlates with race, ethnicity and socioeconomic status.  There is so much concern about “blaming the victim” that doctors are not telling people what they should be doing differently at home.

Photo credit: Wattpad

By healthcare business consultant David E. Williams, president of Health Business Group.

Doctor murdered; Gun legally obtained

A cardiologist was murdered yesterday at the Brigham and Women’s Hospital in Boston by  the son of a former patient.

According to the Boston Globe:

Millbury police Lieutenant Donald Desorcy said Pasceri was properly licensed to possess a firearm. “They are a very good family,” Desorcy said. “Never any problems, as far as we are concerned.”

So he was licensed “properly” according to our laws. The gun also worked “properly” as intended by its manufacturer and owner. If the shooter had been a member of “a well regulated Militia” defending the State, that would be one thing. But of course it’s not the case.

Total cost of care and health equity in Minnesota: Conversation with MNCM’s Jim Chase

Jim Chase, president of Minnesota Community Measurement

Jim Chase, president of Minnesota Community Measurement

Minnesota Community Measurement (MNCM) is a national leader in bringing together healthcare stakeholders to address important, but difficult quality and cost issues. In this podcast interview, MNCM’s president Jim Chase and I discuss two new reports, one on the total cost of care and the other on health inequities.

Here are the topics we covered, along with timestamps:

  1. What is MNCM? (0:10)
  2. You have released a total cost of care report for MN physician groups. What is total cost of care? (0:38)
  3. Why does total cost of care matter? (1:16)
  4. What adjustments do you make for the health status of patients in different practices? Do you exclude patients who are outliers? (1:46)
  5. How applicable is the TCC metric to an individual patient deciding where to seek care? (2:56)
  6. To what extent is TCC a proxy for negotiated rates as opposed to total resource use? (4:08)
  7. What stakeholders were involved in bringing this report to fruition? (5:23)
  8. Why do you think MN is the first state to issue a report like this? (7:23)
  9. How do you pair total cost of care with quality? (8:38)
  10. You’ve also recently released a Health Equity report. What kinds of inequities are included? How are they measured? (9:42)
  11. What are some key differences you observe? Do they match up with the hypotheses you went in with? (11:08)
  12. This is a touchy subject, so how did you get everyone to cooperate? What was MNCN’s role? (12:54)
  13. Beyond identifying that there are inequities, how do you address them? (14:14)
  14. Are there any explicit linkages between the TCC and Health Equities reports? (15:10)
  15. It’s been a busy couple months for MNCM. What’s next? (15:52)

By healthcare business consultant David E. Williams, president of Health Business Group.

New England Baptist on the move: I’m quoted

New England Baptist hospital, renowned for its focus on orthopedics, is considering a move from its Mission Hill perch. The existing facility is old and probably more trouble than it’s worth to renovate. It’s rational to consider building a new facility rather than renovating the old one.

The Boston Globe (N.E. Baptist Hospital plans a move) covers the story, focusing on the implications for the Mission Hill neighborhood and the character of the Baptist.

I’m quoted:

“When you have an old facility and you’re trying to work in a modern era when people care about efficiency and collaboration, it can be very difficult to remodel your old quarters,” said David E. Williams, president of the Boston consulting firm Health Business Group. “It makes sense for them to at least contemplate moving.”

Meanwhile, don’t hold your breath. This could take a decade or more.

By healthcare business consultant David E. Williams, president of Health Business Group.


The folly of high deductible health plans

Now that's what I call value-based pricing!

Now that’s what I call value-based pricing!

They used to call high deductible health plans “consumer-directed” plans. That was before people realized there is nothing particularly consumer driven about them. A recent poll –not the first of its kind– shows that people with high deductible plans tend to forego care. In fact they skip both unneeded and needed care. Most people don’t like the plans so much when they get sick.

Naturally the current negativity about high deductible plans is mixed up with discussion of the Affordable Care Act, aka ObamaCare. The lowest tier Bronze plans have cheap premiums but high deductibles. This very typical article on the subject (Skipped Care A Side Effect Of High-Deductible Health Plans) from the Seattle Times comes complete with the requisite Republican representative trashing ObamaCare. What this article and almost all similar ones miss is that low income people should purchase Silver tier plans. Not only will they receive valuable premium subsidies, they’ll also be eligible for cost-sharing subsidies that reduce out-of-pocket costs, thus neutralizing the usual criticism of ObamaCare. (By the way, details like this are why the law has a lot of pages in it.)

In the private sector things are different and worse. Employers that offer high-deductible plans are effectively penalizing their low wage employees and rewarding those with high incomes. That’s because those with limited incomes are more sensitive to the high out of pocket costs. They’ll self-ration and hold overall medical expenses down. Meanwhile, high wage employees won’t be nearly so affected. High income people I know who have high deductible plans just don’t think hard about avoiding the out-of-pocket payments. Their premiums will be lower than they should be because utilization is held down among the lower wage folks on the same plan.

Meanwhile, the high deductible plans are totally ineffective at cost containment once the relatively low out-of-pocket maximums are reached. For example, anyone having even minor surgery will blow right through the maximums and have no incentive to keep a lid on costs after that.

A better approach would be to offer policies that reward patients for using efficient providers and provide a premium rebate to those who do.

photo credit: theamericanroadside via photopin cc

By healthcare business consultant David E. Williams, president of Health Business Group.