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Hospital board says CEO's salary is in line

December 08, 2003|by TAMELA BAKER

tammyb@herald-mail.com

As plans to relocate Washington County Hospital continue to draw debate, some have raised questions about the compensation package paid to James Hamill, president and chief executive officer of the Washington County Health System, which includes the hospital and several other corporations.

A report that Hamill signed a three-year, $3 million contract to come to Hagerstown is false, members of the board of directors that hired him in 2000 say.

Asked about Hamill's compensation, WCHS board members said his initial salary was $300,000, but he was not on board for the full fiscal year.

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His salary for fiscal year 2002 was $316,160, board members said. They declined to release his current salary until it is reported in the hospital's federal 990 tax form.

Board Vice Chairman Robert Stift said that in determining Hamill's salary, the board consulted Washington-based Watson Wyatt Worldwide for a survey of senior management salaries for similarly sized health-care organizations. The salary range provided by Watson-Wyatt was $345,400 to $518,200.

He also receives a benefit package similar to that of other health-system employees, including health insurance, retirement and personal leave. He receives a car allowance as well.

In addition to the hospital, Hamill oversees four other corporations included in the health system. Altogether, they employ more than 3,000 people in 20 locations and produced some $255 million in gross revenue last year, said Vice President for Finance Raymond Grahe.

The national average base salary for CEOs of comparably sized operations is about $331,500, said Nancy Fiedler, vice president for communications for the Maryland Hospital Association. Adding benefits, she said the average package totals about $388,300.

Those figures are for not-for-profit facilities, she added.

"For a for-profit, the salary range is in the multimillions," she said.

By comparison, she said, the Chronicle of Higher Education listed average college presidents' salaries at about $500,000.

Board members noted that in addition to managing personnel issues, navigating through state regulatory requirements and keeping up with medical technology, Hamill has had to deal with the same medical malpractice insurance crisis that prompted surgeons in neighboring West Virginia and Pennsylvania to protest earlier this year.

"The organization is complex; therefore, the person running it must be top-notch," Stift said.

Stift said the salary survey the board used in determining Hamill's compensation considered several factors in its comparison, including other regional facilities, the size and the components of the facilities, and whether they were not-for-profit or for-profit.

"We were trying to get as close to a comparable facility as we could," Stift said.

Hamill's predecessor, Horace Murphy, was paid $217,370 in fiscal year 1999 and received benefits totaling $5,600, according to the Washington County Hospital Association's 990 form for that year.

Former board Chairman Donald R. Harsh Jr. said the board reviewed rsums from 20 to 25 applicants for the job when Murphy retired. Of those, he said, they interviewed six or seven. At the time, a plan for a new hospital was not on the agenda, he said.

"We have an 18-member board," Stift said. "When we hired (Hamill), it was a unanimous decision."

Hamill held similar positions at Holy Cross Hospital in Silver Spring, Md., and at Columbus-Cuneo-Cabrini Medical Center in Chicago.

Although a new hospital wasn't in the offing when Hamill was hired, Grahe said the idea for one started with Murphy.

"We recognized we had some deficiencies," Grahe said, but when Murphy retired, "there was no need to pursue it until we had a new CEO."

The issue came up again as hospital officials sought to provide the best tools for employees to meet patient needs, he said.

A committee, which included Washington County Commissioners President Gregory Snook and Hagerstown Planning Commission Chairman Douglas Wright, was formed to consider sites for a new building. Hagerstown Mayor William Breichner was invited to serve on the committee but declined, board members said.

The committee reviewed 15 sites and settled on a parcel the health system already owns adjacent to Robinwood Medical Center.

Fiedler said that having a good leader is "critical to a hospital's success. Ultimately a good CEO can help hold health-care costs down overall. You want somebody with some experience."

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