The financial rebound by many for-profit hospital chains last year was reflected in the finances of the not-for-profit organization that lobbies for their causes in Washington.
The Federation of American Hospitals, which represents about 1,700 investor-owned facilities, bounced back into the black in 2000 and increased the compensation of some of its top officials accordingly, its annual tax filing shows.
These and other details of the federation's finances were included in its annual Form 990 filed with the Internal Revenue Service. Modern Healthcare reviewed a copy, which is available to the public, last week.
The federation's membership dues revenue increased 6.8% to $5.2 million from $4.9 million in 1999, reflecting the growing clout and increasing hospital acquisition activity of investor-owned chains. Several new start-up hospital companies, including Iasis Healthcare Corp., Franklin, Tenn., and HealthMont, Nashville, joined the federation last year, beefing up dues, said Laura Thevenot, the federation's executive vice president and chief operating officer.
Overall, the federation reported a profit of $242,427 on total revenue of $7.3 million, compared with a $766,708 loss on revenue of $6.7 million in 1999. Part of the turnaround also was attributable to improved performance by the federation's investments, which paid dividends and interest of $446,416 in 2000, compared with only $187,136 the year before, thanks to a new investment adviser, she said.
The federation's top executive also received a 9.6% bump in compensation, according to the filing. Thomas Scully, the federation's former president and chief executive officer, resigned earlier this year to become administrator of the Centers for Medicare and Medicaid Services and was replaced in May by Charles "Chip" Kahn. But last year, before taking the pay cut that goes along with moving into the public sector, Scully received compensation and contributions to his employee benefit plan totaling $672,000, compared with $613,353 in 1999. That year he had received a 6.6% increase in compensation.
"He's worth it," Thevenot said. "I think it's just a function of everyone's working hard, and the board was pleased with our performance."
Although Thevenot received compensation totaling $284,766 and a 10.9% increase over her previous year's pay, Michael Bromberg, the federation's vice chairman and its original leader for 25 years, saw his total compensation decline for the second year in a row. In 2000, he received $197,000 in compensation and contributions to employee benefit plans, down 21.7% from $251,710 in 1999.
"He's vice chairman of the board, but it reflects that we're asking him to do different things," Thevenot said. "He advises the board; he is not spending as much time doing federation stuff."
She would not elaborate further.
Total executive compensation at the federation increased 2.9% to $1.15 million, compared with $1.12 million in 1999, while other salaries and wages declined very slightly.
Although last year the federation's lobbying efforts focused on winning back Medicare reimbursement dollars from the federal government, this year the organization plans to broaden the scope of its lobbying efforts, Thevenot said.