Your tax dollars at work
The high cost of hospital administration.
“A year off with pay,” is what Victoria Alexander-Lane, former Chief Executive Officer for Northern Inyo Hospital (NIH), was overheard saying to a hospital employee at a coffee shop, days after Lane’s relationship with the hospital had ended.
Since the two parted ways, it’s been impossible to say anything more specific than “her employment has ended,” because the NIH Board of Directors and Lane have both said the split was a mutual decision. But Lane’s employment contract says if she gets fired she gets the severance, $275,000, equal to a year’s salary, while she gets nothing if she quits.
Trying to get any information from the hospital is like pulling teeth.
According to her severance pay receipts, Lane was fired. MC Hubbard, Chair of the NIH Board of Directors, said as with any personnel issue, she had no comment.
Lane started receiving severance pay Sept. 25, 11 days after the public announcement of her end of employment, according to records The Sheet obtained through the California Public Records Act. Her severance is being paid out in monthly installments of $12,115.30 with an additional “net pay direct deposit” that changes month-to-month from $6,774.07 to $7,352.37, for a net total of $230,148.72 for 12 months.
Her salary for 18 months, including severance was $642,648.72, about $35,000 a month, not including her $25,000 sign-on bonus and $16,000 for moving expenses.
The Board and Hospital have replied to requests by The Sheet that there are no documents, agreements, memorandums of understanding, changes to Lane’s original employment contract, or any other documents or contracts pertaining to Lane’s end of employment. Without changes to her contract, Lane will receive the full severance.
But Lane isn’t the only one making a bundle at NIH. Some interim employee’s contracts have stipulations that require the hospital provide local housing and a car and the employee be flown home every two weeks. Transportation is done on company time.
It will be hard to find a replacement for Lane, for no other reason than it’s hard to find a hospital CEO. Some positions must be filled by law, or the hospital cannot operate. According to the Code of Federal Requirements, CFR 482, Conditions of Participation of Hospitals, a hospital board must appoint or hire a Chief Executive Officer to manage the hospital.
It can be hard to find good help in the Owens Valley, given its rural nature. When left with no options; when there is no one qualified or experienced enough in-house or, when the internal recruitment officer can find no one, either, the NIH turns to a recruitment firm. One such firm is B.E. Smith.
B.E. Smith’s fees for both searching for, or supplying interim workers, is exorbitant. The average rate for a recruitment search is about 28 percent of the position’s annual salary, with a $30,000 minimum.
The fee for interim positions usually requires a $5,000 up-front fee, plus a weekly charge of $5,000 to $6,500 with an eight-week minimum. The rate goes up 6 percent the second year.
If the interim is hired, the hospital pays a placement fee that varies from a full year’s salary of the employee to descending percentages of that salary, depending on how long the interim has been in the position.
According to records obtained through the California Public Records Act, NIH has retained the services of B.E. Smith 13 times since 2012. Of those 13, three were for searches; two were issued in October and one in September of this year. There were nine interim positons, some date back to 2012 and 2013, and four were placed in 2015.
NIH did not return calls as of press time to determine if the searches or positions had been filled.
NIH is not alone when it comes to hiring recruitment headhunting firms. Molly Gamble, Editor in Chief of Becker’s Hospital Review, told The Sheet the turnover rate for hospital CEOs is the highest of any executive position in the nation. The turnover rate in 2014 was 18 percent, down from 20 percent in 2013, but still one of the highest rates in 15 years.
She added healthcare is undergoing revolutionary changes, some too vast to handle and some professionals are bailing out, while the largest demographic of healthcare workers, the Baby Boomers, are aging out of jobs, leaving a void of trained medical specialists. A study conducted by AMN Healthcare published November 13 concluded that of the 9,000 nurses over the age of 54 that were surveyed, two-thirds plan on retiring in the next three years.
Not many rural hospitals put much effort into grooming current employees for advancement, such as rising through the ranks from a Registered Nurse to Director of Nursing. Gamble said a small hospital might not have the time or resources to train someone. But when there’s a departure, the hospital is left between a rock and a hard place trying to find a replacement.
Larger hospitals have problems, but not for lack of applicants. Recruiting firm Pacific Search Partners says in a report that bigger hospitals may run an ad and get thousands of applications, too many to sift through when the position needs to be filled as soon as possible. But a place like NIH can receive very few if any applications from qualified and experienced applicants. Hubbard said it can be difficult to fill any position at NIH, given the remoteness of the area, despite competitive wages, comparable to wages offered at hospitals of NIH’s size.
Mammoth Hospital says it has no problem finding qualified applicants to work for the financially sound facility in one of the most scenic areas in the state that’s filled with outdoor opportunities. Mammoth’s Human Resources Department said the hospital gets to pick and choose from a pool of candidates.
