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November 17, 2022

Executive Compensation at Providence Health and Services (WA) 2019

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 38,200 employees (2019), and reported total revenue of $5 billion (compared to $5.1 billion in 2018) with the primary sources being net patient revenue ($4.6 billion) – with the emphasis on “net” which means gross revenue was significantly higher and had expenses/adjustments deducted (no detail provided).

Expenses in 2019 totaled $7 billion (not counting $350 million in depreciation) categorized as follows:

  • $4.2 billion:  Compensation
  • $1.2 billion:  Fees for Services (primarily other, no detail provided)
  • $0.7 billion:  Medical Supplies and Hospital Fees
  • $0.5 billion:  Other Expenses (Interest, Travel, Conferences, Advertising)
  • $0.4 billion:  Office-related Expenses

Note the largest expense is for compensation for the 38,200 employees who received an average compensation of $110,000.  However, only 7,097 employees received more than $100,000 in compensation.  The 39 most highly compensated employees of PH&S were reported to be:

  • $10,914,842:  Rod Hochman, Former President, CEO*
  • $ 4,018,923:  Mike Butler, President*
  • $ 2,607,656:  Erik Wexler, Chief Executive Southern CA
  • $ 2,557,624:  Debra Canales, Former EVP, CAO*
  • $ 2,163,292:  Rhonda Medows, Former EVP, Population Health*
  • $ 2,082,242: Cindy Strauss, Secretary*
  • $ 1,950,290:  Amy Compton-Phillips, Former EVP, Chief Clinical Officer*
  • $ 1,920,924:  Venkat Bhamidipati, EVP, Treasurer*
  • $ 1,763,034:  Michael Cotton, President/CEO Health Plans
  • $ 1,745,086:  Elaine Couture, EVP, Chief Executive WA and MT
  • $ 1,711,154:  Dale Surowitz, Chief Exec, Providence Tarzana Med Center
  • $ 1,691,607:  Atul Thakker, Physician
  • $ 1,559,647: Lisa Vance, SVP, Former Clinical Program Services*
  • $ 1,551,106:  Bruce Lamoureux, Forme CE, AK Region
  • $ 1,518,930:  Joel Gilbertson, EVP, Community Partnerships
  • $ 1,509,570:  Hector Boirie, SVP, Supply Chain Management (part year)
  • $ 1,496,585:  Aaron Martin, Former SVP, Strategy and Innovation*
  • $ 1,406,734:  JoAnn Escasa-Haigh, EVP, Asst Treasurer*
  • $ 1,402,650:  Tom McDonagh, FormerVP/Chief Investment Officer
  • $ 1,400,889:  Sharon Toncray, Former SVP/Chief Labor EE Counsel
  • $ 1,363,480:  Greg Till, VP, Chief People Officer
  • $ 1,275,589: Preston Simmons, SVP, CE, AK Region
  • $ 1,209,446:  Mike Waters, EVP, Ambulatory Care Network
  • $ 1,141,477: John Whipple, Assistant Secretary
  • $ 1,090,616: Janice Newell, Former SVP, Chief Information Officer
  • $ 1,060,937:  Orest Holubec, Former SVP, Chief Comm/EXT Affairs Officer*
  • $   981,304:  Jim Watson, Assistant Secretary*
  • $   968,902:  Mary Cranstoun, SVP, Total Rewards – Talent Acquisition
  • $   961,458: David Brown, SVP CAO, Ambulatory Care
  • $   938,468:  Medrice Coluccio, CE, St Peter Hospital
  • $   915,813:  Peg Currie, CE, Sacred Heart Medical Center
  • $   890,907:  Kim Williams, CE, PRMCE
  • $   880,379: Debbie Burton, SVP/Chief Nursing Officer
  • $   808,610: Jack Mudd, Former SVP, Mission Leadership
  • $   723,140:  Helen Andrus, CFO, WA and MT Region
  • $   676,316:  Scott O’Brien, COO, WA and MT Region
  • $   538,948:  Ella Goss, CE, Alaska Medical Center
  • $   299,554:  Amy Miller, CFO, AK Region
  • $   242,734:  Donald Anderson Jr, Asst Secretary For Enrollment

“*” indicates compensation was paid by a related/affiliated organization

23 of the 39 (59%) most highly compensated employees are male while 16 of the 39 (41%) are female.

PH&S paid for first class or charter travel and provided discretionary spending accounts, gross up payments and tax indemnifications, personal services, housing allowances 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 on these items, payouts for the retirement plans, and consulting, medical, legal and other fees paid to substantial contributors to the organization.

The following individuals received severance payments in 2017:

  • $491,471:  Tom McDonagh
  • $421,300:  Sharon Toncray
  • $330,112:  Janice Newell
  • $268,306:  Bruce Lamoureux
  • $253,699:  Hector Boirie

1,112 independent contractors received more than $100,000 in compensation. The five most highly compensated were reported to be:

  • $45.2 million:  McKinsey and Co, of New York, NY for consulting services
  • $39.1 million:  Microsoft, of Redmond, WA for technology services
  • $31.4 million:  EPIC Systems Corp, of Verona, WI for technology services
  • $30.4 million:  Marsh USA Inc, of Deerfield, IL for insurance services
  • $24.9 million:  3MD Investments, of Redmond, WA for technology services

Given that PH&S paid executives millions and millions to manage the health network, it is unclear why the organization used more than $45 million to compensate McKinsey (a consulting firm).

To read the IRS Form 990 (2019) for PH&S, click here.

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