The chief executive officer of the largest hospital system in the state made more than $2 million in salary and benefits in 2015.
Dr. John Brumsted, the CEO of the University of Vermont Health Network and its flagship hospital, took in nearly $2.19 million in compensation that year.
Brumsted’s total compensation includes $979,064 in base pay and $492,000 in bonuses. The remainder includes contributions to a retirement account and health insurance, among other things.
VTDigger reviewed salary information for hospital CEOs and other administrators dating back to 2006. Brumsted’s pay in 2015 is the highest amount that any hospital administrator has made during that time.
Additionally, Brumsted was the highest-paid hospital executive in Vermont between 2012, when he became CEO, and 2015, the most recent year that numbers are available on the annual Form 990, which nonprofits such as hospitals submit to the Internal Revenue Service.
Eleven other executives at the UVM Health Network and the UVM Medical Center made more than $500,000 in salary and benefits in 2015. Many of them shared in the same bonuses that Brumsted received that year for meeting financial, quality and operational goals.
Their compensation packages do not include several private flights that the UVM Medical Center chartered for Brumsted and three others on the executive team, according to Michael Carrese, a spokesperson for the hospital.
“The purpose of the travel was to meet with hospitals in upstate New York as our network continues to evaluate future expansion and affiliation,” the hospital wrote in its Form 990.
Trends across Vermont hospitals
In 2015, the average pay and benefits for a CEO at a Vermont hospital, as well as Dartmouth-Hitchcock Medical Center in Lebanon, New Hampshire, was $612,698. The median was $435,554.
The average pay and benefits for a Vermont hospital CEO represents an 11.9 percent increase over the year before, and the median pay and benefits represents a 4.7 percent increase over the year before.
The average and median are both up because almost all CEOs saw an increase in their compensation — ranging from Brumsted, the highest paid CEO; Thomas Dee of Southwestern Vermont Medical Center, the third-highest paid CEO; and Roger Albee, the lowest-paid CEO, who runs Grace Cottage Hospital in Townshend.
There were 45 administrators making more than $500,000. Many of them were high-level administrators for the UVM Medical Center or Dartmouth-Hitchcock Medical Center. One was Todd Moore, the CEO of OneCare Vermont, a major health care reform company.
Two hospitals — Porter Medical Center in Middlebury and Copley Hospital in Morrisville — reported compensation for two different CEOs over the course of the year because of retirements.
The Green Mountain Care Board, which regulates hospital budgets and health insurance prices, does not track the pay for hospital administrators but is considering doing so.
The board has kept statistics going back more than a decade on the median pay and benefits for employees at hospitals other than Dartmouth-Hitchcock who are not doctors.
From 2014 to 2015, median pay for an employee at a hospital increased 3.3 percent to $80,704, from a starting figure of $78,162. The median pay for a CEO at a hospital, other than Dartmouth-Hitchcock, increased 8.9 percent to $426,747, from $392,017.
At the UVM Medical Center, trends from 2006 to 2015 show that CEO pay and benefits increased faster than pay and benefits for hospital employees who are not doctors.
Pay for the CEO roughly doubled, from $1.1 million to $2.2 million, while pay for employees went up 27 percent, from $66,166 to $84,327.
UVM Health Network compensation policies
Scottie Ginn is the chair of the compensation committee for UVM Medical Center, which works with a national consultant to set Brumsted’s pay. Brumsted then sets pay for the rest of the executive team.
The committee looks at the salary and bonus compensation of CEOs at comparable hospitals like the Mayo Clinic and Dartmouth-Hitchcock Medical Center, Ginn said. The committee then sets Brumsted’s base salary at the 50th percentile and bonuses at the 65th percentile.
In addition, the UVM Medical Center made contributions equivalent to 15 percent of Brumsted’s salary into a supplemental retirement account in 2015, according to the Form 990. In previous years, the hospital contributed 10 percent of his salary to a retirement account, according to a Form 990.
“It is a lot of money,” Ginn said. “I’m not going to argue it’s not, but it’s what we need to keep and attract the right leaders at our organization to help us do the right thing so we get the right health care for Vermonters and New Yorkers.”
Ginn said the UVM Medical Center is “an incredibly complex organization” that is “very well led” by Brumsted and his team. She said the most important thing they do is provide quality health care to people in Vermont and upstate New York.
Ginn said the hospital did not increase Brumsted’s base pay from 2014 to 2015 because, after looking at what other similar CEOs were making, the compensation committee saw that Brumsted was already being paid in the 50th percentile.
Brumsted and his team received three bonuses. One was for achieving an internal goal for an operating margin — the difference between revenue and expenses, better known in the business world as profits.
That year, the UVM Medical Center recorded record profits of $75.6 million. That represented three-quarters of profits earned among Vermont’s regulated hospitals, while the UVM Medical Center took in just half of the total revenue that patients spent in Vermont hospitals that year.
The executive team received a second bonus for getting state approval for a $187 million inpatient building. The project allows the hospital to replace existing semi-private rooms with private rooms where family members can stay on pullout couches and keep their sick relatives comfortable. The building’s opening is scheduled for 2019.
The executive team received the third bonus for improving the quality of care at the hospital. Ginn said the team was able to improve quality based on internal metrics.
“We do believe that if we have good quality, good efficiency follows,” Ginn said. “These people have an incredibly complex job, and they have, they’re doing a good job of improving health care in this area.”
She pointed to the hospital’s supply chain savings. Since the UVM Medical Center and Central Vermont Medical Center joined forces in 2011 to create the UVM Health Network, the hospitals have turned their bargaining power into nearly $50 million in supply chain savings.