Report slams North Carolina’s nonprofit hospitals — including Atrium and Novant — over CEO pay

The report aimed to highlight the wage inequality and waste in nonprofit hospitals throughout the state. CEOs, according to the report, saw pay increases that “dwarfed the growth of their workers’ wages.”

Why it matters: Hospital CEOs here have raked in millions over the last decade — and most have doubled their salaries in at least five years — as an increasing number of Americans have struggled to afford health care and are delaying medical treatments, as our Axios Raleigh colleagues reported.

• “Nonprofit hospital executives have enriched themselves while fueling a crisis of health care affordability,” the report notes.

By the numbers: The nine largest hospital systems paid their CEOs a combined total of $38.7 million in 2019, the equivalent of pay for nearly 600 nurses, who made an average of around $67,000 that year, according to the report.

Between the lines: State treasurer Dale Folwell’s report slammed Atrium Health in particular, saying Atrium “has prioritized the paychecks of its top executives over its charitable mission.”

• Atrium paid Gene Woods $9.8 million in 2021. This made him the highest paid hospital CEO in North Carolina in 2021.
• Woods grew his compensation by 473% over six years, which were filled with high-profile mergers.
• Woods made $4,728 an hour, per the report. It would take him just 13 hours to exceed the yearly wages of the average North Carolina household,” the report said.

Zoom out: In 2022, Atrium Health merged with Illinois-based Advocate Aurora Health to create the fifth-largest health system in the U.S.

The other side: In a statement, an Atrium spokesperson noted that the organization is proud of how its leadership team, including its CEO, led the region through the pandemic without any layoffs or rural facility closures.

“More than ever, health care administration requires strong, business-savvy leaders who can manage the complexities and challenges the industry is facing – and retaining top talent requires a competitive compensation package. As a nonprofit health system, we don’t have the luxury of providing stock options and other typical corporate perks,” the statement read.

Novant, Charlotte’s other dominant health care system, cut its CEO’s compensation by 1.7% in 2020. But during the pandemic, Novant still paid CEO Carl Armato $4.5 million, or $1,721 an hour.

• From 2010-2021, Novant Health spent a total of $458.7 million on its top executives, including $58.2 million on CEO compensation.
• It paid 19 executives more than $1 million each in 2021.

The other side: The North Carolina Healthcare Association put out a statement that criticizes Folwell and the timing of his report, calling the findings “egregious.” The statement praised North Carolina hospitals and the quality of care they deliver. A Novant spokesperson said the local hospital is “in support of their [NCHA’s] position.”

• “At a time when other elected leaders in Raleigh from both parties are working to advance healthcare to more than 600,000 North Carolinians through Medicaid expansion and want to help financially stabilize struggling rural hospitals, the Treasurer remains silent about those urgent needs,” the statement read in part.