University of California rewards 38 hospital execs for performance
University of California regents, meeting Thursday in San Francisco, approved $3.1 million in performance-based payments for 38 executives at the system's five UC hospitals throughout the state.
The incentive payments range from $30,120 for a UC San Diego executive to $218,728 for the CEO of the UCLA Medical Center.
Seven UC Davis Medical Center executives will receive awards, with CEO Ann Madden Rice getting a $167,986 payment on top of her base salary of $584,300.
"They're not bonuses, they are incentive pay to get certain behavior," UC President Mark Yudof said during the meeting.
The payments reward hospital employees for meeting goals such as reducing infection, increasing patient satisfaction, getting more reimbursements from insurance plans and saving money on expenses and supplies. Incentive pay is common in hospitals, leaders from non-UC health systems testified at the meeting.
Rank-and-file workers in the UC hospitals – such as nurses, clerks and janitors – also receive incentive pay. But their payments are much lower, because the amounts are tied to base salary.
More than 22,000 of those workers at UC medical centers already have received $30 million in incentive payments for their performance in 2008-09.
The payments approved Thursday are for the executives' performance during the same time period. Regents delayed their payments until now to study whether the incentive program was effective and typical in other hospitals, said UC spokesman Peter King.
Money for the payments does not come from the state's general fund. It comes out of revenues generated by the hospitals in billing patients and insurers. Still, the payments for executives drew criticism from union workers, who have been asked to take furloughs as a result of the state's fiscal crisis.
"Workers are being asked to put less food on their families' tables while UC executives continue to enrich themselves," Lakesha Harrison, president of Local 3299 of the American Federation of State, County and Municipal Employees, said in a written statement. "Students are asked to pay more but get fewer services. This is outrageous and unacceptable."
Regents said the incentive payments are appropriate but put the university administration in an awkward political position.
"Our decision today is complex," regent Eddie Island said. "The complexity is in part driven by our knowledge that we have, in this budgetary regime, allowed layoffs. We've had to take aggressive positions in our union negotiations. We've had problems paying faculty and retaining faculty. All of that is making our decision on these incentives difficult."
Island said it's appropriate for regents to oversee compensation of UC employees whose salaries are paid by taxpayers. But he asked that decisions about compensation for medical center employees be directed to another body because their salaries don't come from public funds – they are generated by hospital business.
"We ought not to be faced with the decision of furloughing faculty … while we approve the payout of $33 million to (medical center) employees, some of whom earn salaries above $600,000," Island said.
"They're legitimate. But they're difficult for us to approve in the context of our economic problems."
In a separate matter, regents hired a new executive vice president of business operations for the UC president's office. Nathan E. Brostrom had served on an interim basis in that position since September while maintaining his job as a UC Berkeley vice chancellor. In assuming the vice president's position full time he will earn an annual salary of $375,000.