Worcester Business Journal

10 Worcester Business Journal | January 6, 2020 | wbjournal.com Eric Dickson UMass Memorial Health Care, Worcester $2,257,995 Tarek Elsawy Reliant Medical Group, Worcester $1,064,467 Richard Burke Fallon Health, Worcester $1,082,043 Winfield Brown Heywood Hospital, Gardner $966,472 Edward Kelly Milford Regional Medical Center $795,049 Edward Moore Harrington Hospital, Southbridge $802,639 Antonia McGuire* Kennedy Community Health Center, Worcester $276,619 Frances Anthes** Family Health Center of Worcester $219,173 Name Organization Total compensation *Has retired; succeeded by Steve Kerrigan **Has retired; succeeded by Lou Brady Note: Pay is for 2017, except Elsawy, which is for 2016 because Reliant Medical Group ceased being a nonprofit in 2017 budget year due to purchase by Optum. Source: U.S. Internal Revenue Service filings, via ProPublica Central Mass. healthcare executive pay Compensation for the top official, each as president and CEO, at each of eight major health nonprofits in Central Massachusetts in the most recent year available: Lead by UMass Memorial, Central Mass. healthcare organizations have cut pay to executives, as industry employment has grown Cutting at the top BY GRANT WELKER Worcester Business Journal News Editor F aced with declining patient discharge numbers and seeing a chance to pare costs that didn't directly affect patients, UMass Memorial Health Care leaders in Worcester made a tough financial choice to cut much of its executive ranks. Executive pay totaled more than $31 million the year Eric Dickson, the UMass Memorial president and CEO, took over in 2013. By 2017, that total executive pay fell below $15 million. e executive headcount wasn't cut quite in half, but UMass Memorial eliminated positions that became redundant with consolidation, such as when HealthAlliance and Clinton Hospital merged. Other reductions were made in IT and finance. "We wanted a slimmer organization at the top," said Sergio Melgar, chief financial officer for UMass Memorial. "It was very hard to promote anyone to a [vice president] in the organization during this timeframe. If we lost a VP, they were generally not replaced." UMass Memorial Health Care – Central Massachusetts's largest employer – also reduced the number of employees by almost 8%, or nearly 1,200 workers, over a five-year period ending in 2017, the latest year with data available. UMass is not alone in needing to make tough choices to keep as many patient services as it can. With rising employee costs, regulatory requirements and insurance reimbursement, among other expenses, hospitals have not been immune from financial pressures despite being in such an in-demand industry. "ey view investments in their workforce, their communities, and the way in which they deliver care as among the most important investments they make," said Catherine Bromberg, spokeswoman for the Massachusetts Health & Hospital Association. "However, hospitals are also forced to devote resources in areas that have no benefit to patients or the communities in which they reside," Bromberg said. "For instance, administrative requirements from insurance companies and certain government regulations are both costly and labor- intensive. is red tape is too oen a barrier for hospitals being able to invest in places that really matter." A mixed period in employment Over the last five years, other major healthcare employers in Central Massachusetts have adopted a similar cut-at-the-top model as UMass Memorial, although others typically are adding total staff while trimming those executive expenses, according to a Worcester Business Journal examination of filings with the U.S. Internal Revenue Service. At the Fallon Health, executive compensation dropped 18% while the Worcester insurers total workforce grew 9%. Heywood Hospital in Gardner trimmed its total executive compensation 2% while adding 9% Tarek Elsawy, Reliant Medical Group Richard Burke, Fallon Health In his first five years leading UMass Memorial Health Care, Eric Dickson cut compensation to executives by more than 50%. PHOTO/EDD COTE

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