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October 11, 2020

Executive Compensation at Providence Health and Services (WA)

by Anne Paddock

Providence Health and Services – Washington (PH&S) is part of the Providence St Joseph Health (PSJH), a non-profit, tax-exempt integrated healthcare provider associated with the Catholic Church. With 51 hospitals and nearly 1,100 clinics staffed by 120,000 employees across seven western states (Washington, Oregon, Montana, New Mexico, California, Texas, and Alaska), the Providence St Joseph Health system came to be when PH&S merged with Providence St. Joseph Health (PSJH), in 2016. (note: PSJH – the overall executive management arm – is the sole member of PH&S).

PH&S is headquartered in Renton, Washington, has about 33,500 employees (2017), and reported total revenue of $7 billion (up from $6 billion the year before) with the primary sources being acute care ($2.7 billion), capitation (fixed amount of money for time per patient) revenue ($2.3 billion), primary, homeware, pharmacy and other program revenue ($1.5. billion).

Expenses in 2017 totaled  $8.4 billion (not counting $318 million in depreciation) categorized as follows:

  • $4.0 billion:  Compensation
  • $2.4 billion:  Cost Care Claims Expense
  • $0.7 billion:  Fees for Services (primarily other, no detail provided)
  • $06 billion:  Medical Supplies
  • $0.4 billion:  Other Expenses (Interest, Prof Liab Trust, Travel, Conferences, Advertising)
  • $0.3 billion:  Office-related Expenses

Note the following two largest expenses:  the $2.4 billion in cost care claims expense.  This number represents 29% of total revenue which means it costs PS&H $29 out of every $100 in revenue for cost care claims.  The second number that jumps out is compensation for the 33,500 employees who received an average compensation of $119,000.  However, only 6,095 employees received more than $100,000 in compensation.  The most highly compensated employees of PH&S were reported to be:

  • $3,301,550:  Jason Dreyer, Neurosurgeon
  • $2,508,836:  Anthony Armada, CE/Swedish
  • $2,373,427:  Lisa Vance, SVP, Clinical Program Services
  • $2,135,455:  Janice Newell, SVP, Chief Information Officer
  • $2,118,335:  Elaine Couture, CE/PHC/Eastern WA Region
  • $2,117,281:  David Yam, Neurosurgeon
  • $1,823,907:  Dan Harris, VP, Treasurer
  • $1,779,938:  Bruce Lamoureux, Ex-Officio Corporate Member
  • $1,577,069:  Jeffrey Fee, CE/Western Mt Region (thru 1/17)
  • $1,447,856:  Preston Simmons, CE/Northwest WA Region
  • $1,408,699:  Joel Gilbertson, SVP, Community Partnerships
  • $1,394,706:  Medrice Coluccio, CE/Southwest Wash Region
  • $1,377,109:  Tom McDonagh, VP/Chief Investment Officer
  • $1,323,850:  Sharon Toncray, SVP/Chief Labor EE Counsel
  • $1,239,848:  John Whipple, Assistant Secretary
  • $1,205,152:  Greg Till, VP, Chief Talent Officer
  • $1,187,752:  Mary Cranstoun, VP/Total Rewards
  • $1,163,651:  Debbie Burton, SVP/Chief Nursing Officer
  • $1,157,644:  David Brown, VP, Strategy and Business Development
  • $1,106,660:  Mike Waters, Former VP/CAO/Physician Services
  • $  732,729:  Michael Trzupek, Group VP System Finance
  • $  717,559:  Jack Mudd, Former SVP, Mission Leadership
  • $  268,198:  Donald Anderson, Jr, Assistant Secretary for Enrollment
  • $  256,506:  Craig Wright, Former SVP, Physician Services
  • $  185,400:  Kerry L Carmody, Former COO/CA Region
  • $  183,811:  Paul Stoddart, Former VP/Marketing

19 of the 26 (73%) most highly compensated employees are male while 7 of the 26 (27%) are female.

In addition, the following employees were listed (but compensated through a related organization):

  • $11,583,060:  Ron Hochman, Former President, CEO
  • $ 4,624,609:  Mike Butler, President
  • $ 2,910,666:  Debra Canales, EVP, CAO
  • $ 2,763,296:  Cindy Strauss, Secretary
  • $ 2,708,746:  Rhonda Medows, EVP, Population Health
  • $ 2,516,017:  Amy Compton-Phillips, EVP, Chief Clinical Officer
  • $2,184,590:  Todd Hofheins, Former EVP/CFO/Treasurer
  • $ 2,039,775:  Ann Encasa-Haigh, EVP/Assistant Treasurer
  • $ 1,616,390:  Aaron Martin, SVP, Strategy and Innovation
  • $ 1,486,287:  Venkat Bhamidipati, EVP, Treasurer
  • $ 1,272,878:  Forest Holubec, SVP/Chief Comm/Ext Affairs Officer
  • $ 1,095,678:  Harvey Smith, SVP, Chief Customer Service Officer
  • $   232,513:  Terry Smith, Former SVP/Management Services
  • $   124,356:  John Fletcher, Former VP, Operations Support

9 of the 14 (64%) most highly compensated employees listed above are male while 5 of the 14 (36%) are female.

PH&S paid for first class or charter travel and provided discretionary spending accounts, gross up payments and tax indemnifications, housing allowance or a residence for personal use, and payments for business use of personal residence.  See Schedule J, Part III Supplemental Information (link at the end of this post) for more information.

The following individuals received severance payments in 2017:

  • $793,260:  Todd Hofheins
  • $575,654:  Anthony Armada
  • $432,694:  Daniel Harris
  • $381,929:  Jeffrey Fee
  • $377,256:  Michael Trzupek
  • $177,790:  Paul Stoddart
  • $144,200:  Craig Wright
  • $519,285:  Harvey Smith

1,048 independent contractors received more than $100,000 in compensation. The five most highly compensated were reported to be:

  • $25,928,181:  The Everett Clinic, of Everett, WA for medical services
  • $24,389,675:  Marsh USA, Inc., of Dallas, TX for insurance
  • $21,168,828:  Cross Country Staffing, Inc., of Los Angeles, CA for staffing
  • $13,146,818:  Western WA Medical Group, Inc., of Everett, WA for medical services
  • $11,310,819:  Inland Imaging, LLC, of Spokane, WA for imaging.

However, business transactions involving interested persons include the following:

  • $117,105,900:  Paid to a substantial contributor as a subcontractor for consulting
  • $  5,074,450:  Paid to a substantial contributor as a subcontractor for consulting
  • $  4,886,960:  Paid to a substantial contributor as a subcontractor for consulting
  • $  4,700,096:  Paid to a substantial contributor as a subcontractor for medical services
  • $  3,592,438:  Paid to a substantial contributor as a subcontractor for consulting
  • $  2,552,321:  Paid to a substantial contributor as a subcontractor for medical services
  • $  1,844,564:  Paid to a substantial contributor as a subcontractor for consulting
  • $  1,626,417:  Paid to a substantial contributor as a subcontractor for medical services
  • $  1,493,747:  Paid to a substantial contributor as a subcontractor for construction services
  • $  1,259,657:  Paid to a substantial contributor as a subcontractor for medical services
  • $    402,495:  Paid to a substantial contributor as a subcontractor for consulting
  • $    374,717:  Paid to a substantial contributor as  a subcontractor for consulting
  • $    289,402:  Paid to a substantial contributor as a subcontractor for legal services
  • $    201,605:  Paid to a substantial contributor as a subcontractor for medical services
  • $    148,284:  Paid to a substantial contributor as a subcontractor for IT services

It is unclear why the above organizations are not named and why many are not listed as the most compensated independent contractors.

To read the IRS Form 990 (2017) for PH&S, click here.

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