By Michael Hooper
Eleven employees earned more than $1 million apiece at Stormont Vail Health in 2018.
Stormont Vail's highest paid employees are listed on Schedule J, page 76 of Form 990 for tax year ending Sept. 30, 2018, the latest year available at Guidestar.org.
Physician Matthew Wills earned $1.7 million while Kevin Han, vice president and CFO through June 30, 2017, earned $1.1 million.
Physician Stephen Eichert earned $1.3 million and physician Marc Baraban earned $1.1 million. Other employees who earned more than $1 million include physician Chu Chi Chen at $1.9 million; physician Benjamin Boudreaux at $1.08 million; Bernard Becker, vice president through Sept. 15, 2017, at $1.5 million; Douglas Rose, physician and vice-president, $1.6 million; vice president Janet Stanek, $1.3 million; physician Eric Voth, $1.05 million.
Many employees made over a half a million dollars, most of them physicians.
The starting wage at Stormont Vail is $12.45 per hour. That is $25,896 annually for full-time work. At that rate, it would take a worker 38 years to earn $1 million, assuming no pay raises.
The top paid employees and other non-essential staff are now expected to take pay cuts as Stormont Vail adjusts to a 50% contraction in business due to the coronavirus outbreak, a Stormont Vail employee said.
Matthew Lara, public relations specialist at Stormont Vail, said all elective surgeries have been cancelled and the number of patients visiting the hospital have declined due to the coronavirus outbreak. Because of a 50% decline in business, the hospital is implementing pay cuts. Stormont Vail has about 5,300 employees.
Lara said Robert Kenagy, president and CEO, is taking a 35 percent pay cut. All senior vice presidents are taking a 25 percent pay cut, vice presidents a 20 percent pay cut. Administrative directors will take a 15 percent pay cut. The doctors have been asked to take a pay cut as well. Essential front-line, patient-facing employees such as nurses will continue to receive 100 percent of their pay, Lara said.
"We're trying to make this as equitable as possible. Senior leadership are taking bigger cuts," Lara said. "I'm taking a 10 percent pay cut."
Stormont Vail had $822 million in revenue in 2018 and $735 million in expenses with a net gain of $87.8 million, according to the tax return.
"Before all of this, we were doing very well," Lara said. But after the outbreak of coronavirus, the health care organization has been providing only half of its services so half the revenue has been cut.
Last week, Moody's reaffirmed the organization's credit rating, Lara said.
Lara said non essential employees will be put in a labor pool, where they may be reassigned and get a 10 percent cut. If there is no work, they will be put on administrative leave and receive 50 percent of their salary, he said.
The new pay plan will be effective Thursday, April 5.
Randall Peterson, former president and CEO, earned $2.1 million in 2018.
Robert Kenagy earned $758,000 in 2018 as vice-president but was promoted to president and CEO in 2019.
Lara said Peterson, Stanek, Becker and Han are no longer with Stormont Vail.
On March 20, Moody's Investors Service affirmed Stormont Vail Health's A2 revenue bond rating. This action affects approximately $47 million of rated debt. The outlook is stable.
Moody's said affirmation of the A2 bond rating reflects the likelihood that Stormont Vail Health will continue to sustain strong operating performance and balance sheet metrics while management implements growth strategies. Stormont Vail Health expects to open three ambulatory clinics in the next three years with the first expected in June 2020. Stormont Vail Health will also continue to expand its presence in high growth Manhattan, Kan., to support its recent ownership interest in a surgical hospital. The rating is further supported by Stormont Vail Health's continued growth and investment in its large employed physician group, the Cotton O'Neil Medical Group, which Moody's views as a market differentiator despite the presence of an academic medical center in its primary market. Challenges include a variance to total revenue and margin targets in 2019 due to a decline in inpatient volumes though year to date 2020 is exceeding budget. While Stormont Vail Health's revenue base is somewhat modest, balance sheet metrics will continue to remain strong despite near term decline in liquidity to fund capital.
The stable outlook reflects the likelihood that the system will sustain current operating performance and replenish liquidity following completion of ambulatory projects.
Stormont Vail Health is a health system anchored by a 586 licensed bed tertiary referral hospital in Topeka. Located in the northeast part of the state, it is the only Level 2 trauma and Level 3 neonatal intensive care center in the service area. Stormont Vail Health owns physician group Cotton O'Neil Medical Group which employs 276 physicians.
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