Hartford Business Journal

www.HartfordBusiness.com • March 18, 2019 • Hartford Business Journal 7 while hospitals saw a net negative impact — losing out on hundreds of millions of dollars annually. The 2017 deal was supposed to provide hospitals relief, but Lamont said the state can't afford to cede the revenue. Without his proposed change, the state estimates it would face a net revenue impact of $406.1 million next year as lawmakers try to tackle a $1.5 billion dollar deficit. "We're in very good discussions with the hospitals, it's a reset of that relationship as well, and we'll see what happens going forward, but this year, [the hospital tax] is staying in the budget," Lamont said after keynoting a recent MetroHartford Alliance event. The hospital association declined to discuss the Malloy-to-Lamont transition. Performance review Blum, Bristol Hospital's compensa- tion committee chairman, said the annual process by which directors decide what to pay Barwis is regulated by strict IRS rules and has plenty of checks and balances built in. "Our process is run by an outside committee, everyone has to be inde- pendent, with no conflicts or financial connection to the hospital," Blum said. The rules are the same for other not- for-profit hospitals. That means Barwis can't sit in on the committee's deliberations (though he gets some input when it comes to the pay for his top deputies), and has no con- trol over hiring or firing consultants the committee retains each year to scour the U.S. hospital market and determine CEO pay ranges at comparable institutions. That process helps define the salary goalposts. The next step is determin- ing the extent to which Barwis met the board's previously set financial targets and quality goals in the re- cent year. The goals can be tough, and hitting them all is uncommon, but if that happens, Barwis can receive a bonus of up to 35 percent of his salary. That means his compensation tends to fluctuate. According to a 2017 IRS filing, Barwis earned $751,424 in salary and fringe benefits, while the health sys- tem booked $174 million in revenue. Glenn Heiser, Bristol Hospital's chairman, said the board's aim is to keep the best possible management in place running the health system. "There's competition out there," Heiser said. "There's not many people who can run an organization at the CEO, COO or CFO level." John Lodovico Jr., vice chairman of Bristol Hospital's board, said Barwis deserves the money he earns. "With Kurt's caliber, I'm surprised he hasn't been recruited out," he said. With insurance contracts changing and overall financial and regulatory complexity increasing, qualified execu- tives can be harder to find, according to Aaron Mitra of Phillips, DiPisa & Associates, which works with Bristol Hospital's board on recruiting. "Not just anybody can come in and run one of these organizations, and I think it was a different skill set that we needed 10 years ago," Mitra said. Bristol Hospital's compensation consultant, Alexander Yaffee, CEO of Yaffe & Co., said hospitals aren't like other not-for-profits, such as colleges. "The complexity is nowhere near the same when you're dealing with life and death and you're dealing with the lifeblood of a community," Yaffee said. For Barwis, the budget target (specif- ically, the health system's bottom line) is the biggest factor in his compensa- tion. If he misses the financial target, even if he shoots the moon on every other goal, it's entirely up to the board whether or not to grant him any bonus. Sometimes, Blum said, a missed year isn't Barwis' fault. In fact, the hospital tax has arguably cost Barwis money. Bristol Hospital lost a net $2.4 million to the hospital tax in 2016, according to state data, which would have been more than enough to cover the health system's $1.5 million operating loss that year. Barwis missed his 2016 financial tar- get, and took a pay cut of nearly $250,000 the following year. He missed again in 2017. His 2018 compensation has not yet been made public, but he said he hit the 2018 budget goal, with the system book- ing a nearly $2 million surplus. PDS has been meeting the needs of the construction industry since 1965. Our dedicated team of design and construction professionals welcomes the challenge of serving its past and future customers on their most demanding projects. 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View the 2018 Digital Edition at www.DoingBusinessinCT.com Doing Business in Connecticut showcases Connecticut's many economic development opportunities, and the attributes that make Connecticut the place to work, live and play. The resource for all companies looking to expand in or relocate to Connecticut. ALL NEW EDITION! PARTICIPATION OPPORTUNITIES: • Sponsorships • 2-Page Company Profi le • Advertising Hospital CEO turnover Nearly one in five U.S. hospital CEOs left his or her job in 2017, a rate that's held steady for four years running. 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Annual turnover 14% 18% 16% 16% 17% 20% 18% 18% 18% 18% Source: American College of Healthcare Executives

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