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Executives Receive Bonus, Staff Asked to Sacrifice

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J.Adderton has 27 years experience as a BSN, MSN .

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What do you think about incentive payments to hospital administrators?

Hospital executives at a Denver hospital were given incentive bonuses a week after front-line staff were asked to voluntarily reduce their pay or work hours.  Read on to learn more about employees reactions and CEO apology.

Executives Receive Bonus, Staff Asked to Sacrifice
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On April 27th, the CEO of Denver Health Medical Center (DHMC) issued an apology to employees for the timing of executive and management incentive bonuses.  The 2019 bonuses, paid out on April 10th, came a week after front-line staff were asked to voluntarily take leave without pay or reduce their hours.  The hospital is facing the same financial challenges as many other facilities in the wake COVID-19.

Employees Asked to Sacrifice

On April 3rd, CEO Robin Wittenstein sent an email to employees how the pandemic will cause the hospital financial stress. Wittenstein’s email detailed measures that would be taken to ease the facility’s financial strain.  These included:

  • A hiring freeze
  • Ask employees to voluntarily take leave without pay
  • Use personal time off, or
  • Reduce hours in work week

Wittenstein warned more extreme options, such as mandated use of paid time off and mandatory leave without pay, may be needed.  However,  the goal was to avoid these measures if possible.

Big Bonus Payouts

The dollar amount of bonuses is determined by the organization’s board of directors.  Many of the bonuses paid out on April 10th were between 17% to 19% of executives’ salaries and were between $50,000 and $100,000.  Wittenstein received a $230,275 bonus, totaling 23.8% of her $967,155 annual salary.  According to CBS4, about 150 hospital executives and managers received bonuses for their work during the payout.

Hospital administrators have defended the bonuses saying the money puts DHMC executives and administrators at about the 50th percentile of what other administrators across the nation are paid.

Employee Reactions

Hospital workers expressed anger and frustration over the payments.  An online petition, posted on Change.org, called for executives to return the bonus money. The petition was signed by 3,449 individuals and included many DHMC employees.

Chris Hinds, a Denver City Councilman, also asked the bonuses be returned and  used to benefit front-line workers.  During a facebook live session, Hinds stated

Quote

“I’m really frustrated that we have public health administrators...that are taking tens of hundreds of thousands of dollars of bonuses….while working families are sacrificing themselves.”

Late Apology

On Monday, April 27th, Wittenstein sent an email apology to hospital staff. The apology came 4 days after a local news channel first reported the executive bonuses.  Wittenstein apologized for the timing  and acknowledged the payments have “caused you hurt and anger”.  According to CBS4, she also apologized for the lack of transparency writing

Quote

"Being informed of incentive payments now to the executive staff, no matter what the explanation … has clearly been painful and dividing, especially because you did not hear about this from me directly first. For this, I am deeply sorry,"

Wittenstein also informed staff she too was sacrificing by using her paid time off in place of her regular salary. She also waived accrual of her paid time off for the next 3 months.

In an April 14th email, Wittenstein asked her executive team to also give back. As a result, the executive staff reduced hours and pay by 12%, contributed over $550,000 in salary back to the hospital and donated $386,000 to the Denver Health Foundation for an employee relief fund.  According to Wittenstein, a 100% of the executive team agreed to give back in some way. 

Board Response

The Board Chair for the Denver Health and Hospital Authority also sent an email apology, writing

Quote

“All of us on the board regret that the timing of the 2019 incentive payments have created anger and resentment, and we understand how troubling news of these payments can be at such a time as this”.

**DHMC has 7,000 employees and treats about 930,000 patients a year.

QUESTION: What do you think about incentive payments to hospital administrators?

References

Denver Councilman Calls Hospital Bonuses Disgraceful

Denver Health CEO Apologizes For Timing of Executive Bonuses

Denver Health Executives Get Bonus 1 Week After Workers Asked To Take Cuts

J. Adderton MSN has over 20 years experience in clinical leadership, staff development, project management and nursing education.

7 Followers; 123 Articles; 34,674 Profile Views; 396 Posts

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JadedCPN has 13 years experience as a BSN, RN and specializes in Pediatrics, Pediatric Float, PICU, NICU.

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Yea, I would definitely be bitter about this. Read the room.

Without giving away too many identifying details, my hospital made sure to tell the news about every PR move they made including "hero" chalk art at employee entrances, executive salary reduction by 5%, and a small employee bonus, but forgot to notify them when they reduced all staff hours across the board by 25-50% after all of that pretty PR stuff.

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Sour Lemon has 9 years experience.

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I've been recently furloughed and am not unsympathetic, but if there's no work, then there's no work. The hospital still has to be "managed" and these bonuses were likely negotiated long before covid-19 stepped into the spotlight.

The headline seemed to suggest that there was a reduction in hourly pay rate. That would be a little hard to stomach while bonuses were being handed out.

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Daisy4RN has 20 years experience and specializes in Travel, Home Health, Med-Surg.

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Gee, why am I not shocked at this!

5 hours ago, J.Adderton said:

Wittenstein received a $230,275 bonus

5 hours ago, J.Adderton said:

Wittenstein also informed staff she too was sacrificing by using her paid time off in place of her regular salary. She also waived accrual of her paid time off for the next 3 months.

 

Well at least after they were called on it they sacrificed

 

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FacultyRN has 13 years experience as a MSN, RN.

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Because salary and bonuses are both expected components of an administrator's compensation, and this is pay they were owed from 2019, I don't have a problem with this.  They earned the promised bonuses by meeting assigned objectives.

Now, during the 2020 COVID crisis, they are reportedly taking the same steps to save the hospital money as their nurses.

Are some administrators overpaid? Yes. Are some administrators reasonably paid? Yes. Are some administrators underpaid? Yes.  

Are nurses sometimes overpaid? Probably not. Are we decently paid? Yes. Are we sometimes underpaid? Yes.

Different careers have different pay ranges. We each have the ability to pursue the career of our choosing, with full knowledge of the expected salary range, job availability, etc.  

There's definitely room to improve nursing pay.  I just don't think we should push for other people, who pursued different career paths, to be punished because nurses don't make as much as we'd like.  Just because we both work in hospitals doesn't mean we should be paid equally. I would not like to be paid the same as a parking lot attendant or gift shop worker; I did not select a career path in that pay range. (There's nothing wrong with those jobs, and that's not meant as an insult. Just a fact)

I think it's important to remember that administrators' families are also facing the financial uncertainties of COVID. Their spouses may have lost jobs. Their investments may have tanked. I think it was generous of them to pay almost $400k towards a relief fund to help employees.

Edited by FacultyRN

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JadedCPN has 13 years experience as a BSN, RN and specializes in Pediatrics, Pediatric Float, PICU, NICU.

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My view wasn’t meant to mean that they shouldn’t get it or that they didn’t deserve it, but rather the timing of the payout was just in poor taste. 

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Uroboros has 16 years experience as a APRN and specializes in Advanced Practice Critical Care and Family Nursing.

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I don't see an issue here either. It's simply contractual and money owed from 2019. Now, they have the option to give it or a portion back in an act of benevolence, like many of the corporate bailouts have demonstrated. But it's their choice alone. Really what's worse is the myopic scrutiny select businesses face when they prosper in times of international economic crisis. I mean if something is illegal or immoral that's one thing. But to simply benefit from good front end business decisions? For example, no one is yelling about the record 75 billion (yes that's billion) in sales Amazon made so far during the COVID crisis. 

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Daisy4RN has 20 years experience and specializes in Travel, Home Health, Med-Surg.

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I think the bonuses are a bad idea on a good day (pre covid) for a number of reasons. The admin salary and bonuses are taking away from other staff and patients. This is not like any other company/industry, this is healthcare, this is (supposed to) be taking care of peoples health. Of course they should be payed for their work but at what point does it become detrimental to said care. I think we are there! The pay/bonuses have risen significantly over the years when healthcare became a "business", and not r/t inflation etc. I honestly dont know how you cut your staff pay, take a huge bonus and go home and sleep at night. I find this absolutely disturbing and despicable. It doesn't matter what year it was from or what the "incentive" was I would not have been able to take that bonus with a clear conscious knowing both staff and patients were suffering, and asking your staff to take a hit financially (ie sacrifice) to boot. How about they lead by example!

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FacultyRN has 13 years experience as a MSN, RN.

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13 minutes ago, Daisy4RN said:

This is not like any other company/industry, this is healthcare, this is (supposed to) be taking care of peoples health.

The pay/bonuses have risen significantly over the years when healthcare became a "business"

I understand your sentiment, but healthcare IS a business.  There are many healthcare roles that have nothing to do with "taking care of people's health" - HR, IT, accounting, marketing, finance, lawyers, coding and billing, environmental services, security, receptionists, operations, logistics, supply jobs, maintenance, and so on.

If healthcare organizations aren't profitable, they will close.  If they are under failing leadership, they won't be profitable.

At the end of the day, it has to be treated like any other business, or there'd be nowhere for patients to seek care.

As nurses, our first priority is caring for patients, but we are only a small piece of the big healthcare picture.

I think there's an assumption that if money wasn't going to administrators, it'd go to nurses... I just don't think so. Maybe it happens some places, but I've never personally heard of a hospital that said "We have extra money in our budget this year. Let's use it to give the nurses pay raises."

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Well, I noticed I stopped accruing sick leave after I reached twice the amount I am allowed to use per year.  Since, in my state, the employer does not see fit to pay PTO like the rest do, but to only follow the meager amount of "sick time off" provided by state law, I guess if they stop showing an amount accruing, we won't notice how much we really lose at the end of the year. How thoughtful of them.

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Daisy4RN has 20 years experience and specializes in Travel, Home Health, Med-Surg.

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9 minutes ago, FacultyRN said:

I understand your sentiment, but healthcare IS a business.  There are many healthcare roles that have nothing to do with "taking care of people's health" - HR, IT, accounting, marketing, finance, lawyers, coding and billing, environmental services, security, receptionists, operations, logistics, supply jobs, maintenance, and so on.

If healthcare organizations aren't profitable, they will close.  If they are under failing leadership, they won't be profitable.

At the end of the day, it has to be treated like any other business, or there'd be nowhere for patients to seek care.

As nurses, our first priority is caring for patients, but we are only a small piece of the big healthcare picture.

I think there's an assumption that if money wasn't going to administrators, it'd go to nurses... I just don't think so. Maybe it happens some places, but I've never personally heard of a hospital that said "We have extra money in our budget this year. Let's use it to give the nurses pay raises."

Of course it is a business in the sense of needing to keep operational, the problem is the IMO very large executive bonuses at the expense of staff and patients. I realize they are not giving extra money to staff or lowering the cost of care, that is exactly the problem. I once sat through a meeting on the restructuring of the organization and how nurses were supposed to meet "client" satisfaction etc all the while sitting on the floor because they did not even have enough respect for staff to have enough chairs and then kept going on about the disney (and other) company models completely clueless to the fact that those companies take care of their employees so said employees can take care of the customers. It is ridiculous that corporate execs make so much money and nurses are so strapped for time that they can't even take a break or use the restroom.

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Daisy4RN has 20 years experience and specializes in Travel, Home Health, Med-Surg.

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17 minutes ago, caliotter3 said:

Well, I noticed I stopped accruing sick leave after I reached twice the amount I am allowed to use per year.  Since, in my state, the employer does not see fit to pay PTO like the rest do, but to only follow the meager amount of "sick time off" provided by state law, I guess if they stop showing an amount accruing, we won't notice how much we really lose at the end of the year. How thoughtful of them.

Last hospital I worked at touted on HR pg about all the PTO and holiday days etc. Sure, they were there but manager never let anyone use them and then they expire. I asked once why my requests keep getting denied, response was it is not in the budget bc then they have to pay twice. So basically all those days accrued were useless.  How thoughtful of them also!

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