PROVIDENCE – The R.I. Senate voted Wednesday to cap the pay of hospital executives in the state at 110 percent of the regional average for their peers in the Northeast.
The bill (S 0356) would require hospitals’ management to determine the average compensation for hospital executives in the Northeast, and ensure that no executive at their institutions receives more than 110 percent of that amount. The law exempts doctors, nurses and other licensed health care workers.
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The bill’s sponsor, Sen. Michael J. McCaffrey, D-Warwick, said he was motivated by disclosures about the millions earned in recent years by George A. Vecchione, president and CEO of the hospital group Lifespan Corp., as well as other local executives.
Vecchione received $2.96 million in total compensation in 2006-07, according to Lifespan’s tax filings, and the year before that he earned $2.94 million.
“The resources just don’t exist to justify paying millions to executives at hospitals,” McCaffrey, who is also chairman of the Senate Judiciary Committee, said in a statement. A survey by Modern Healthcare magazine found that most hospital CEOs in Rhode Island are paid more than the national average for similar-sized institutions, he said.
“Public health care dollars are already stretched thin, and the cost of medical care continues to rise at unsustainable levels,” McCaffrey said. “These enormous salaries for top executives are just helping to push the cost of health care even further out of the reach of the public.”
The House Corporations Committee held a hearing April 7 on a similar bill, but voted to hold it for further study. House Majority Whip Peter F. Kilmartin, D-Pawtucket, is the sponsor of that legislation.
If McCaffrey’s bill were to become law, the pay cap would take effect Oct. 1.
