University of Pittsburgh Medical Center CEO Jeffrey Romoff took a 24.4 percent pay cut in 2009, making $3.6 million, according to data released Friday by the region’s dominant health care provider.
Romoff was one of 19 individuals who in 2008 were paid at least $1 million in base salary, bonuses, other reportable and deferred compensation and nontaxable benefits, according to the Form 990 that UPMC filed with the Internal Revenue Service.
The data were for UPMC’s fiscal year ended June 30, 2009. However, IRS changes mandated reporting compensation data on a calendar year basis, in this case 2008.
Forty-nine employees were paid $500,000 or more in 2008, and 2,838 employees who work for the 37 entities known collectively as UPMC Group received $100,000 or more in reportable income, according to the filing. UPMC released Romoff’s calendar year 2009 compensation on its website, allowing a comparison with figures from the IRS form.
The sharp compensation decrease for its CEO shows that the economic downturn meant belt-tightening all around, UPMC said.
“Reductions in compensation for UPMC senior leadership were announced in March 2009 as part of widespread actions taken to ensure the organization’s continued pursuit of its health care and research mission during the economic downturn,” said UPMC spokeswoman Wendy Zellner.
Romoff’s pay cut didn’t surprise industry consultants.
“Whenever there were prior economic downturns, health care always was looked at as being insulated, people still got sick and had to be treated,” said Bob Erra, CEO of health care consulting company Integrated Healthcare Strategies, Minneapolis.
Last year, in addition to more people being uninsured or underinsured because of job losses, hospital systems had to contend with Wall Street’s stock plunge.
“Not being able to rely on their investments, for the first time, many of these health care organizations found themselves cash poor and needing a belt-tightening, everywhere from the CEO suite to the cafeteria,” Erra said.
Integrated Healthcare Senior Consultant Walter Anastazievsky said up to 30 percent of health care organizations froze salaries, and a large percentage of institutions cut salaries between 5 percent and 20 percent or more.
Among other UPMC high wage earners in 2008 were Executive Vice President Elizabeth Concordia, with compensation of more than $2.1 million; brain surgeon Dr. Amin Kassam, nearly $2.1 million; James Luketich, director of the Heart Lung Esophageal Surgery Institute, more than $1.4 million; and Robert J. Cindrich, chief legal officer, nearly $1.9 million.
A large number of highly paid health care individuals is commonplace, industry consultants said.
“Surprisingly, those are the kinds of compensation numbers I would expect,” said Jan Jennings, president of Pittsburgh-based health care consulting company American Healthcare Solutions.
“What you don’t see in those compensation numbers is the level of productivity the physicians bring to an organization,” Erra said.
Erra said depending how productive a physician is, and his or her specialty, it’s possible that person produces $3 million in revenue annually for the employer.
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