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AP News

NH center gauges exec pay at nonprofit hospitals

CONCORD, N.H. (AP) — Top executives at New Hampshire's 23 nonprofit hospitals saw their pay increase by an average of 18 percent from 2006 to 2009, putting them in the middle of the pack when compared to their peers in other New England states, according to a report released Monday.

The report by the New Hampshire Center for Public Policy Studies was requested by the attorney general's office, which had raised concerns about high CEO pay in 2010 when it rejected a proposed affiliation between the holding company for Catholic Medical Center in Manchester and the parent organization for Mary Hitchcock Memorial Hospital in Lebanon.

At the time, Attorney General Michael Delaney said his concerns about the Manchester executive's salary didn't factor into his objection to the affiliation but would be the basis for a wider investigation into CEO salaries.

The result was Monday's report, which found that total compensation ranged from $150,000 at Upper Connecticut Valley Hospital in Colebrook to more than $1 million at Catholic Medical Center in 2009, the most recent year for which data was available. On average, those totals were 18 percent higher than they were three years earlier, and the rate at which those salaries rose far eclipsed the wage increases seen by other workers.

For example, the increase in average wages for all private sector workers in the state over that same period was less than 5 percent, though health care workers in general and hospital workers in particular saw increases more in line with the executives' increases.

There also was great variation among hospitals — some CEOs saw their compensation decrease, while others reaped increases of more than 50 percent. And while New Hampshire's executives overall saw their wages increase, their pay didn't go up as fast as it did in other states. Region-wide, CEO compensation at New England hospitals increased nearly 30 percent between 2006 and 2009. The average compensation for CEOs was $755,000 for New England, $489,000 for New Hampshire and $435,000 for northern New England.

The report also sought to determine whether New Hampshire's nonprofit hospitals are following the process established by the Internal Revenue Service for determining executive salaries. It found that most of the hospitals meet the IRS standard but several fell short by failing to document deliberations from meetings in which compensation is discussed or by not using relevant data in setting compensation.

The report also found no correlation between hospital pay and either hospital cost or quality of care. Delaney said that was a concern, given that the hospitals are required to provide charitable care and other community benefits as a condition of their nonprofit status.

Steve Ahnen, president of the New Hampshire Hospital Association, said the report shows that the state's hospitals are in line with the rest of northern New England in setting salaries. He said the report will serve as a benchmark for hospital boards as they decide on future compensation.

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