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Hospital gets high marks for indigent care
But CEO disputes report saying center overcharges patients, pays him too much
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Base compensation for hospital chief executives in 2008


Northside Hospital Inc., $1,758,685

Pheobe Putney Memorial (Albany), $905,570

Medical Center of Central Georgia, $891,984

Emory University Hospital Midtown, $878,742

Floyd Medical Center, $838,799

Northeast Georgia Medical Center, $821,619

Piedmont Healthcare, $780,848

WellStar Kennestone Hospital, $699,282

Athens Regional Health, $652,882

Gwinnett Hospital System, $647,801

SOURCE: IRS Tax Form 990s

A nonprofit advocacy group has praised Northeast Georgia Medical Center for providing more care to low-income and uninsured patients than the state requires, but also said the hospital charges too much and overpays its chief executive.

In a report issued Wednesday afternoon, Georgia Watch had mostly positive reviews for the hospital.

Georgia Watch recently completed an analysis of the medical center as a part of its Hospital Accountability Project. The group has been analyzing hospital financial practices since 2007. The medical center is one of five that have been evaluated so far.

“The report recognizes the medical center for several things (including) commenting on our high, quality level of care,” said Jim Gardner, the medical center’s CEO. “We have a demonstrated track record of being smart about how we spend our money. The report even notes that we are a model hospital and congratulates us for reducing barriers to medical care.”

But he added, “Despite the fact that their own report acknowledges our quality, they come to two conclusions (about mark-ups and CEO salary) that we think are wrong.”

The report praises the medical center for providing three times the amount of indigent and charity care required by the Department of Community Health. It also said the medical center has a history of providing financial and other support to local health care causes.

Since 1999, the report says, the hospital has given $2.6 million to Good News Clinics. In 2008, the hospital has contributed $4.7 million in services to the Health Access Initiative, a referral service that helps connect patients with doctors and assists with obtaining some medications and services.

“(The medical center) has many practices and programs that directly benefit their patients and their community, but the hospital charges are high and even when discounted can easily prove to be a barrier to affordable care for many,” said Holly Lang, program manager for the Hospital Accountability Project.

The report said the hospital marks up its service at 333 percent, charging $1 for every 30 cents of services delivered. While the report says the mark-up is well above the state average, it is in line with peer hospitals that serve a disproportionate share of indigent cases.

Medical center administrators point to a number of factors that influence the amount of money that a patient pays for services.

“If you look at the $21.6 million in indigent and charity care in relation to the fact that Medicare grossly underpays (for services) — that absolutely impacts charges. Medicare only reimburses us for 15 percent of the actual cost,” Gardner said.

“Those patients with insurance and those who have the ability to pay, pay a higher cost than they would if everyone in essence paid their bill.”

According to hospital staff, last year, 55 percent of all patients’ bills were paid by Medicare or Medicaid. Unpaid medical bills — to the tune of more than $40 million in 2008 — also impacts hospital fees, Gardner said.

The other issue raised by the report has to do with Gardner’s salary. According to the group, his pay for 2008 — more than $820,000 in 2008 — was about 35 times greater than the average salary of the average Hall County resident.

But Doug Carter, chairman of the medical center’s board of directors and member of the board’s compensation committee, said comparing Gardner’s salary to the average resident isn’t a fair.

“With 4,700 employees, (the medical center) is an extremely complicated business model,” he said. “We, as a community, don’t expect the average person to have the knowledge and expertise to run an organization like this with its size and complexities, and to run it as well as it has been run for the last six years under Gardner’s leadership.”

Before deciding on a salary for Gardner and other members of senior management, Carter said the compensation committee brought in an independent group out of Atlanta — the Hay Group — to review compensation packages of other top officials at similar organizations nationwide.

“The thing that people should understand when they look at (CEO) salary is that a significant portion of it is at-risk because it is performance based,” Carter said. “(The CEO) has to meet specific goals each year, or risk losing a portion of their pay.”

The committee’s goal is to set the base salary in the middle of the nationwide benchmarks, with around 30 percent of the CEO’s salary being performance based, Carter said.

In 2007, Georgia Watch began authoring an ongoing series of reports that examine the finances and community offerings of hospitals in the state, according to the group’s Web site.

“Overall, we try to pick hospitals that serve as a safety net for their areas — not just their city, but for the region. That’s what brought us to (the medical center), because it does serve as the center of care for that region,” Lang said.

But a spokesman for the Georgia Hospital Association said Georgia Watch has been waging a crusade against not-for-profit hospitals since 2005, largely, he believes, because of tort-reform legislation hospitals pushed through the General Assembly that year.

“Not-for-profit hospitals have been a bull’s-eye for Georgia Watch,” said Kevin Bloye, vice president for public relations. “They obviously have an agenda, and all of their reports carry the same theme: (The hospital’s) charges are too high and their CEOs make too much money. We obviously disagree.”

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