New NC Treasurer report shows Mission executive spending topped $100M since 2010
Andrew Jones
ASHEVILLE - A new report out of North Carolina Treasurer Dale Folwell’s office uses public data to peel back the fiscal veil on nonprofit hospital CEO and executive spending, finding compensation for leadership, including that of Mission Health, ballooned over a decade to more than $100 million.
Though the 144-page report emphasizes figures on nine nonprofit hospital systems’ executive pay — including Novant, Atrium, Duke and Vidant — it specifically hones in on Mission when it was a nonprofit, before the 2019 HCA Healthcare purchase.
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It also specifically names former Mission CEO Ron Paulus.
“After orchestrating the sale of Mission Health to HCA Healthcare, Mission Health CEO Ronald Paulus collected a $4 million paycheck that was 726% larger in 2019 than in 2011,” the report states, citing publicly available data from the Internal Revenue Service, and 990 tax filings. “He then left Mission Health to join the for-profit HCA Healthcare under a contract as a strategic consultant, the terms of which remain secret.”
It goes on to note that other “top executives” also saw compensation spikes in the past decade.
“Spending on highly compensated executives shot up by 446% from $3.6 million in 2010 to $19.6 million in 2019. By 2019, top executives’ payout equaled 90% of the charity care that Mission Hospital provided to impoverished patients in Asheville in 2019.”
Paulus did not immediately respond to a Feb. 20 call and email requesting comment.
Outside of data and conclusions about the ballooning of executive pay since 2010, the report notes how Mission’s business interactions affected patients.
It notes an average 10% hike in prices after the HCA purchase and the fact HCA said during the pandemic it would cut senior leaders’ pay by 30%, as reported by the the Citizen Times.
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“Instead, HCA's national CEO Samuel Hazen’s total compensation grew 13.4% to $30.4 million in 2020 over 2019,” the report notes. “Other senior HCA executives also enjoyed significant pay increases during the pandemic. At the same time, clinical workers and employees faced reduced hours and reduced pay.”
Folwell called Mission a “500-pound gorilla in Western North Carolina,” and, though noting his information was anecdotal, recalled the frustrations WNC residents have expressed over declining care and inflated prices in recent years.
“Anybody who lives west of Hickory, North Carolina, can tell you what they're experiencing regarding the quality of care after HCA took over Mission Health,” Folwell said. “People in Eastern North Carolina and New Hanover, Brunswick, Pender and other counties can tell you what they're experiencing after Novant took over … The fact is this consolidation and concentration of healthcare into the hands of fewer and fewer of these multibillion dollar corporations who mainly disguised themselves as nonprofits is resulting in lower quality, lower access and higher cost.”
Folwell continues to use the word “cartel” in reference to the hospital systems in North Carolina that raise prices and curb competition.
Mission and HCA currently are under scrutiny not only by the Treasurer’s office but by plaintiffs in several lawsuits, most of which made headway in county, state and federal courts in 2022 alone.
Five individual plaintiffs brought an antitrust lawsuit against HCA and Mission in 2021. Shortly after, the city of Brevard brought a suit with similar allegations, namely that Mission through monopoly power was restricting health care trade in the area while ballooning costs and insurance prices. The city of Asheville and Buncombe and Madison counties soon joined that class-action lawsuit.
Other, small cases have seen doctors and families sue the hospital, bringing specific allegations but also blaming deteriorating care and employment quality on the 2019, $1.5 billion sale.
Folwell’s report is one of several in the space of a year trying to hold hospital systems to account.
“This is the biggest transfer of wealth in our generation, and it’s being financed disproportionately on the backs of sick, low- and fixed-income people,” Folwell said of his office’s latest work. “These nonprofit hospital executives have lost their mission. They are supposed to make people better, not make themselves richer.”
Asked if Mission and HCA believed the Treasurer office's assessment of prices after the HCA merger were accurate, spokesperson Nancy Lindell noted the COVID-19 pandemic's impact.
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"Healthcare systems are experiencing an increased level of scrutiny following the many challenges of the pandemic, which includes the nationwide staffing challenge," Lindell said. "Treasurer Folwell making those claims about HCA Healthcare has no basis in fact."
She said that, when hundreds healthcare systems were laying off or furloughing colleagues, HCA "introduced a novel pandemic pay program that helped provide paychecks to colleagues unable to work as government mandates halted many elective procedures."
She added that leaders across HCA Healthcare took a 30% reduction in salary until the height of the pandemic passed.
In addition, HCA Healthcare CEO Sam Hazen donated 100% of his salary in April and May 2020 to the HCA Healthcare Hope Fund, which supports colleagues in times of natural disasters, illness, injury, or other hardships, Lindell said.
Andrew Jones is an investigative reporter for the Asheville Citizen Times, part of the USA TODAY Network. Reach him at @arjonesreports on Facebook and Twitter, 828-226-6203 or arjones@citizentimes.com. Please help support this type of journalism with a subscription to the Citizen Times.