Feb 9, 2017

Yale New Haven responds to Brill — and he replies

Steven Brill's deep dive on hospital CEO salaries this week led with the example of Norman Roth, the CEO of Greenwich Hospital in southern Connecticut, who earned $56.40 for each night a patient stayed in his hospital. After the article posted, Yale New Haven Health System — which includes Greenwich Hospital — challenged Brill's reporting and his conclusions about Roth's compensation.

So we're posting Yale New Haven's complaint in full, as well as Brill's point-by-point response to their objections. We stand by Brill's reporting, but for those who are interested, read on to see what the objections were and how Brill addresses them.

From Vin Petrini, senior vice president of public affairs, Yale New Haven Health:

What a shame, Mr. Brill.

Publishing intentional distortions to make the case about hospital CEO compensation is probably not the best way to launch a new media outlet. Axios purports to change the way we read the news. They commit to deliver "vital, trustworthy news" – clearly they did not check Mr. Brill's "facts."

Executive compensation is a favorite issue of writers such as Mr. Brill and its coverage is clearly fair game. However, the callous disregard of information that was provided in a timely manner is not a hallmark of fair coverage.

Let's state the facts for the record. Mr. Roth, President of Greenwich Hospital did not receive a salary of $2.9 million in FY 2015. Period.

Mr. Brill's article is full of misstatements. In fact, it starts with an inaccurate bed count, which he uses to calculate his figures. Greenwich Hospital has 206 beds. If that simple number is wrong, how can one believe the accuracy of more complex figures.

The facts, as laid out to Mr. Brill are that in 2015, Mr. Roth became fully vested in his retirement account because of his age and more than 36 years with Yale New Haven Health. The money accrued in that account will remain there until he retires. However, according to federal financial regulations, taxes must be paid in full for a retirement account following its full vesting.

As explained to Mr. Brill, in order to determine the accurate compensation paid to Mr. Roth, the deferred compensation would need to be deducted and the resulting amount is $775,000 which includes benefits and bonus.

So let's be clear, since the article was not. Mr. Roth did not receive a lump sum payment of $2.9 million. He did however, pay taxes on the deferred income which reflected his savings over a 36-year career at Yale New Haven Health. His real salary for that year was $775,000 – a fact that was provided but sadly ignored by Mr. Brill as he wrote the story.

Now anyone can argue the relative value of executive compensation. But, the starting point for that conversation should always be based upon the facts. In this regard, the first missile from Axios was a total dud.

Brill's response:

I guess the alternative facts trend is spreading.

As Vin Petrini (who did not return my calls and emails and instead had me speak with his subordinate), knows:

  1. According to the form 990, Mr. Roth actually earned a total of $3.7 million in the 2015 fiscal year, not the $2.9 million I listed. I deducted $800,000 because that money seemed to be attributed to his work for the parent company, Yale New Haven. So, if anything, I understated his income.
  2. The text of the article makes clear Yale New Haven's position that that his income that year was "inflated" by a "big chunk" of especially high deferred compensation. But we also make clear that we were comparing earnings for all hospital CEO's in a uniform way — the way the IRS requires it to be reported. And deferred compensation is always a significant part of any executive's earnings.
  3. As the article also makes clear, in an extra effort to account for that "big chunk" I asked Yale New Haven to provide me with Mr. Roth's fiscal year 2016 income, where that "big chunk" presumably would not be reflected. That more current number is not yet publicly available but it will be soon. Yale New Haven's response through spokesperson Dana Marnane was that "We don't have to give it to you yet." Our invitation stands: Provide us with the more current number for Mr. Roth's compensation, and we'll report his compensation per patient day based on that. I'm betting it's still multiples more than any hospital CEO I know about.
  4. As for the number of hospital beds, the numbers listed were those that Greenwich Hospital reported to the government for that year, as compiled by the American Hospital Directory. Perhaps the hospital misreported the number or it the number has increased (although Ms. Marnane did not dispute it when I presented it to her). However, that doesn't change the number of patient days the hospital reported — which Mr. Petrini does not dispute, and which is how compensation per patient day is calculated.
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