Executive Compensation at Health First

Health First is a fully integrated health delivery network (in this case, meaning the network provides a variety of insurance options through Health First Health Plans in central Florida, and the provision of health care through four hospitals and numerous outpatient and wellness services including Health First Medical Group, a multi-specialty physician group) in central Florida.

The purpose of this post is to report the executive compensation at Health First, Inc. (Health First), a tax-exempt, non-profit 501 (c) (3) headquartered in Rockledge, Florida – an organization that oversees the whole network and provides management, planning, IT,  finance, and administrative support services.

There are 14 members (trustees) of the governing body (board of trustees), 13 of whom are independent.  12 of the 14 (86%) are male while 2 of the 14 (14%) are female.  With the exception of the President, trustees received $0 – $32,810 for 1 hour of work per week for this organization and 3-4 hours of work for a related organization.

Key financial information reported on the Form 990 for the year beginning October 1, 2018 and ending September 30, 2019, include the following:

• Total revenue was $279 million (compared to $245 million the year before) which primarily came from “support services” ($248 million) which appears to be revenue from related/affiliated organizations within the network.
• Expenses totaled $218 million (not including $21 million in depreciation) with the 3 primary expenses being compensation ($108 million), office-related expenses ($71 million), and fees for services ($26 million).
• Net assets were $774 million at year-end (compared to $688 million at the beginning of the year) – which is primarily because Health First spent less than they received and a $49 million transfer from a related organization.

11,094 employees received $108 million in compensation which equates to an average compensation of $10,000 (which appears to be very low compared to other non-profits). 387 employees received more than $100,000 in compensation with the 17 most highly compensated reported to be:

• $1,716,630:  Steven P Johnson, President, CEO of HFI
• $1,266,454:  Drew A Rector, EVP, Chief Strategy Growth
• $1,022,004:  James S Mitchell, III, EVP, COO of HFI
• $  966,953:  Richard P McNeight, Former Sec’y and EVP, Chief Digital
• $  931,323:  Brett A Esrock, CE, HRMC
• $  883,823:  Joseph G Felkner, EVP/CFO of HFI, Asst Treasurer
• $  770,430:  Jeffrey C Stainaker, SVP of HF, , Chief Physician Exec
• $  767,619:  Frank S Letherby, SVP, HF, Chief Exec, HFMG
• $  709,281:  Nicholas W Romanello, SVP, Corporate Counsel
• $  651,733:  Aaron S Robinson, Former CEO, Community Hospital (9/2018)
• $  647,990:  Paul B Just, Chief, HR Officer
• $  624,257:  William J Calhoun, Former President, Hospital Ops
• $  576,551:  Alexander Popowycz, Former SVP, CIO (6/2018)
• $  572,979:  Lee Scheinbart, VP, Medical Affairs, Community Hospital
• $  553,831:  Brian E Conner, VP/COO of HRMC
• $  532,181:  Michael A Scialdone, System VP, Finance
• $  525,997:  Constance J Bradley, Former SVP, CQO (9/2018)

16 of the 17 (94%) most highly compensated employees are male while 1 is a female and she is at the bottom of the list.

Health First provided Joseph G Felkner, EVP, CFO with a $2,940,053 loan to fund the purchase of cash value life insurance policies. The current balance due is $3,231,144.

Health First provided Steven P Johnson, President, CEO of HF with a $9,111,939 loan to fund the purchase of cash value life insurance policies. The current balance due is $10,089,848.

Health First provided James S Mitchell, III, EVP, COO of HFI with a $4,360,057 loan to fund the purchase of cash value life insurance policies. The current balance due is  $4,836,141.

Health First provided Jeffrey C Stainaker, SVP of HFI with a $1,698,862 loan to fund the purchase of cash value life insurance policies. The current balance due is $1,641,146.

Collectively, the four highly compensated employees above owe Health First nearly $20 million.   See the Form 990, Schedule L, Part V, Supplemental Information for more detail on these transactions.

151 independent contractors received more than $100,000 in compensation with the five highest reported to be:

• $21 million:  Sodexo Inc and Affiliates, of Pittsburgh, PA for operational services
• $11 million:  DST Health Solutions, of Harrisburg, PA for IT
• $ 9 million:  Allscripts Healthcare, of Somerset, NJ for IT
• $ 8 million:  Sodexo CTM, of Nashville, TN for operational services
• $ 6 million:  G4S Secure Solutions, of Atlanta, GA for security and carrier services

To read the IRS Form 990 (2018 for the year ending September 30, 2019), click here.