More “82% Raise” News

Recently, I wrote about bow Beaumont Health CEO John Fox’s compensation increased 82%, to more than $5.6 million, in 2017. Workers there are going crazy and starting to protest. Well, now there is more news. Two execs have just left and:

Crain’s reported at least 175 employees have been given pink slips over the past several months. But Beaumont officials said the system also is hiring more people this year than in 2018. Hirings are up by 3 percent, or 126 workers, this year compared with hirings during the same six-month period last year.

Over the past 18 months, Ascension Health and Detroit Medical Center have also seen large-scale layoffs, with Ascension cutting more than 500 workers from its eight hospitals in Michigan and DMC reducing staff by more than 450 in at least two rounds of layoffs.

Over the last 18 months? And this CEO got an 82% raise?

What am I missing here?

Douglas Farrago MD

Douglas Farrago MD is a full-time practicing family doc in Forest, Va. He started Forest Direct Primary Care where he takes no insurance and bills patients a monthly fee. He is board certified in the specialty of Family Practice. He is the inventor of a product called the Knee Saver which is currently in the Baseball Hall of Fame. The Knee Saver and its knock-offs are worn by many major league baseball catchers. He is also the inventor of the CryoHelmet used by athletes for head injuries as well as migraine sufferers. Dr. Farrago is the author of four books, two of which are the top two most popular DPC books. From 2001 – 2011, Dr. Farrago was the editor and creator of the Placebo Journal which ran for 10 full years. Described as the Mad Magazine for doctors, he and the Placebo Journal were featured in the Washington Post, US News and World Report, the AP, and the NY Times. Dr. Farrago is also the editor of the blog Authentic Medicine which was born out of concern about where the direction of healthcare is heading and the belief that the wrong people are in charge. This blog has been going daily for more than 15 years Article about Dr. Farrago in Doximity Email Dr. Farrago – [email protected] 

  8 comments for “More “82% Raise” News

  1. Jesse Lee Belville,PA-C
    August 14, 2019 at 11:14 pm

    The Federal Government is the largest purchaser of Healthcare in the USA. The admin people are brought in to comply with Federal medicare/medicaid requirements. State medicaid requirements. ACA and other regulatory Piled higher and Deeper,all for better Patient Care. Current EHR was tied to reimbursement for many hospitals and all EHR’s were designed for accountants, insurers and Fed/ State convenience. Not patient care.
    Must end Federal and State involvement in 18% of our national economy. Then all this ill improve and prices will come down. But don’t hold your breath. How many of your professional organizations will push for that. Won’t till the whole system falls and we have to rebuild it.Then for a while it will do well,then the do gooders, and othrr such critters will get involved and screw it all up again. Refreshing Ain’t it.

  2. JRDO
    August 14, 2019 at 1:40 pm

    Absolutely agree the CEO pay is egregious and that the administrative financial burden (AFB) in the US healthcare system is unconscionable. The money that goes to AFB could buy lots of healthcare for patients.

    IMO, those who don’t want government involved in healthcare are arguing by default for more of this private company (healthcare systems/hospitals, health insurance companies, pharmaceutical company) profiting behavior. Only the government has the authority to rein it in.

    Large corporations in general suck. Here is another example of a Detroit area company screwing the non-executives:
    https://www.clickondetroit.com/news/lawsuit-claims-ford-targeted-older-employees-during-recent-job-cuts
    The difference from a societal point of view is that if you can’t afford a 60K pick-up truck you won’t die, but if you can’t afford your insulin you will. That’s why healthcare should be considered a vital function of government- similar to law enforcement.

    Government healthcare sure isn’t perfect (a lot of the mischief is due to money from large corporations corrupting law makers) but letting profit oriented corporations have control is a continuing and worsening nightmare for us.

    Here’s an interesting blip (I recommend listening to the audio) on how differing politicians view how money should influence our elected officials. Mr. McConnell apparently believes money in politics is freedom of speech- not corruption.
    https://www.npr.org/2019/08/01/747368694/mitch-mcconnell-has-long-argued-for-more-money-in-politics

    We can expect that healthcare dollars will continue to fund CEO compensations such as Mr. Fox’s 82% raise whilst patient care is underfunded if the Red Team continues to be in political power.

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    • Pat
      August 15, 2019 at 12:45 am

      Why should the federal government ever have been involved in health care? You want more of a big insurance company that has laws, guns, and agents to make sure doctors do the “right” thing. The current societal view is that one can buy a $60 K pickup, because the kids are on Medicaid, and granny’s multiple ICU stays are covered by Medicare, all squeezed out of the taxpayer, or added to the $22 T debt. Those lawmakers on both sides, Blue and Red, are paid as much in votes from those on the dole, as well as by big corporations. That’s as corrupt as anything the Big Insurance scumbags come up with.

    • rick
      August 15, 2019 at 8:25 am

      Kinda surprised to find an advocacy for government health care in this blog.
      I vote NO.

  3. doc2018
    August 14, 2019 at 12:04 pm

    I’m one of the physician “let go” by “downsizing” in one of those organization, howbeit in a different state. Our CEO was the one with the largest compensation package in the country for the last 4 years. He is now retiring with all his dough. I expect the organization to start falling apart soon, as the cracks are clearly visible. The surrounding communities of patients are certainly no longer fans! They’ve driven off the actual providers of healthcare, but have a HUGE bevy of administrators all with large salaries!

  4. Steve O'
    August 14, 2019 at 8:50 am

    The economics of American Healthcare are incomprehensible because it is only one little doll in the stack of Russian nesting dolls (Matryoshka dolls.)
    These big corporations in turn are about 80-90% fiscal fairydust; they are issuing junk bonds to operate. The big sovereign banks, like Japan and Germany, will not even pay you interest on investments. In fact, they will not pay you back the entire principal, given “NIRP” (Negative interest rate policy.) It is a borrower’s paradise, and a lender’s nightmare, except if nobody has money to lend, and everyone wants to borrow, the banks print ersatz currency and hide the facts so that the Weimar Hyperinflation is delayed a little bit. Go ahead – you owe a billion dollars on a loan – quick, here are a few million-dollar bills from 2025 to pay it off.
    There is nothing but fairydust to American corporate Healthcare; but nobody’s calling it out, because there’s nothing but fairydust in the New York Fairydust Exchange.
    People can be persuaded anything is normal. NP’s, PA’s, physicians – all will be making a million dollars a year equally. But office rent for a little water-damaged room will be $50,000 a month. And your EMR subscriptioni?
    There is bigger nonsense higher up the food chain. Wait and see.

  5. Rick
    August 14, 2019 at 7:32 am

    This is sickening and depressing, Doug. And yet we are helpless. The Boards that dish out these bizarre rewards are composed of ex-CEOs, current CEOs and others who benefit from this system. It is a club, Doug, one in which they take good care of each other.

    I especially enjoy it when a CEO trashes a company, and on the way out the door gets “rewarded” for his/her good work.

    The entire system makes me ill.

    • PW
      August 14, 2019 at 8:56 am

      “I especially enjoy it when a CEO trashes a company, and on the way out the door gets “rewarded” for his/her good work.”

      This happened at my wife’s hospital. A blow up between admin and the ER group ended with the ER group leaving and a new one coming in under nefarious circumstances, also causing the hospital to lose the ER residency. The CEO was “forced” out with a $4 Million parachute. Now we hear the hospital is going to partner with????? Beaumont.

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