The Adventist Health Business
By Jack Hoehn, 07/23/2017
(This is part 2 of a series on Adventist involvement in health care. Read part 1 here.)
I began these articles with the statement that kindly caring for sick people is one of the best things Adventists do.
There are some 74 Seventh-day Adventist owned or operated hospital listed in the USA.
Most are under either Adventist Health, based in Roseville, California; the Adventist Health System based in Florida; or Adventist HealthCare based in Maryland. Those organizations are legally and financially separate from the Seventh-day Adventist Church, although all recognize their historical originations and claim to be supportive of the Church’s outreach. Loma Linda University operates its Medical Center and associated hospitals independently of those organizations.
Outside of the USA, Adventist hospitals tend to be more closely associated with Seventh-day Adventist Church General Conference and its Divisions and Unions, than in the USA.
Medical care financing in the USA is a complex and non-transparent system. It is also difficult to evaluate the finances of “not-for-profit” organizations which are very good at not showing a profit by making all profits “expenses” in some form or other.
Estimates of salaries and benefits of the administrators in these organizations have appeared in public media from time to time. For example, Washington State Department of Health reported in 2014 the salary and benefits packages of the two-top administrator of the small Walla Walla General Hospital were $589,574 for one and $407,770 for the second.
A business magazine in Florida reported 2011 annual “total executive compensation, including base salaries, bonuses, retirement or other deferred compensation, and non-taxable benefits” for the Florida based Adventist Health System as $1,062,010 per year for the lowest of the top 10 executives, to $3,191,124 for the head of the organization. I suspect that in 2017 none of them has had a significant pay cut.
In 2010 California based Adventist Health executives earning over $1,000,000 in salary and benefits a year held 4 of the 10 “non-profit millionaires” positions in Sacramento, California. Current salaries are not revealed, but they did announce this year shortly after divesting the $68 million “accumulated losses” in Walla Walla that they were constructing a $100 Million-dollar office building in Roseville, California. One assumes that “well paid” Adventist Health executives feel the need for a suitable “well-furnished” office space to work in?
What is happening in the USA Adventist health care organizations has very little relationship to Adventist Health International, outside of Australia and New Zealand. In Adventist mission hospitals success belongs to those who can break even, and many are still subsidized by the Church at least in the form of some missionary budgets. I told you that back in the 1970-1980s when I was CEO, Surgeon, Physician for Mwami Adventist Hospital I received a starting local salary of approximately $270 USA a month. That was enough for my subsidized housing, to pay for utilities, and to hire necessary household help (a gardener and housekeeper). I also had a separate monthly savings deposit in Canada where I had an equivalent amount (25% of a Canadian church employed physician’s salary) deposited for when I returned home. My health care, travel, continuing education was also subsidized by the Adventist church. I had what I needed and was able to provide care for everyone who needed me at no cost to them. I have never been that “wealthy” since returning to the USA!
But it remains true that for one top executive in the Florida Adventist Health System, you could fund 20 Adventist Mission doctors like I was. Do you think they might be able to get by with 9 top executives instead of 10? But I digress.
Not Just Executives
I understand that health care costs in the USA cannot be compared to health care costs in Zambia. I also understand the threats to all hospital systems in the USA under the present patchworked financing system. I suspect that Adventist health care millionaires in their well-funded offices are running scared, because they all know that the present system and its funding is not sustainable. That is likely why they are closing or handing over those Adventist Hospitals that cannot make a profit under the present fairly lush reimbursement system, and they all feel they have to “tighten their belts” some way or other because Obama Care and Trump Care and American Health Care in general is headed for a financial crash.
No one is sure when it will crash, or exactly what will emerge after the crash. But the cost of health care is only partly driven by individual greed, and that greed is present in every human being involved in health care. I have never met a physician who did not feel they were under compensated even if they were earning hundreds of thousands of dollars a year. And all nurses I know feel they are paid less than they should be paid. All therapists feel they are paid less than they should be paid. All housecleaners think they should be paid more than they are paid. Every drug company has decided that unlimited profits are their only defense against unlimited liability if their drug has side effects. So they charge $84,000 for a 12-week treatment course for Hepatitis C with a drug that can be produced and sold (at a 40% profit) for $86 if they desired to do so.
Every American injured patient thinks they deserve adequate compensation if injured by care or if their outcome is less than they imagined they deserved to achieve. Every lawyer is tempted to have a “fair share” of that compensation. Even the guy I saw in Seattle driving a new Porsche sports car who bought a vanity license plate boasting “LAW SUIT” on it, felt he deserved what he got out of the system.
Returns on Investment
While physicians, staff and administrators in USA based Adventist Health may be doing well, it is past time for church member to ask the Seventh-day Adventist Church what the Church and its mission is getting out of their investment in USA Adventist Health?
And there are some answers. First of all, people like Adventists to care for them. Now I doubt that there is a huge amount of gratitude and appreciation for millionaire health care administrators in $100 million office complexes, but surely at the provider level, from the house cleaner who takes personal pride in a clean facility, to the laboratory person who is more interested in patient comfort than in practicing their bloodletting skills, to the praying nurses and anesthesiologists, people like faith based sincere care. And I can testify that primary care providers in ambulatory settings function as both priests and family for many patients far beyond their scientific medical expertise. This is especially so for General Internists, Family Physicians, Pediatricians, and some OB-GYN providers and their associated non-physician counterparts.
Specialists while necessary to all of us at some times, have less of a sustained contact with patients, although that contact is very valuable, and appreciated. And we have already pointed out that ambulatory care is where ministry happens much more than acute hospital care.
Secondly some Adventist health care institutions are training hospitals and educational institutions. Where you have students, you can have ministry. Molding of young minds and hearts can happen better in institutions frankly and openly practicing their Adventism. Medical Schools, Professional Schools, Nursing Schools are all potentials for extending the ministry of Christ into this world by the Adventist Church.
Thirdly well-paying jobs for Adventists are often found in institutions operated by the Church. Tithes and offerings are generally healthier from health care institutions operated by Adventists.
However the risks to Adventism from the present systems of Adventist related health care cannot be underestimated. The financial risks of lawsuits in American health care are huge and at times not easily managed. The SDA church has largely abandoned close ties to American health care for exactly that reason. Lawyers including government lawyers will tap every resource available in their claims. One wonders if someday the word Adventist in the present systems may bring financial liability to the church perhaps even for not being more vigilant in the control of these Adventist step-children?
The next risk that I see is a reaction of church members to the financial excesses they note in American health care, and an unscientific rejection of advanced health care, with a “back to the past attitude,” that longs for herbal, magical, pagan health practices as superior to scientific based ones. With our present church administrators trying to impose a 19th century Adventist Theology on the church, will not a 19th century Adventist Health Message follow to the detriment of thoughtful, well informed people today? Homeopathy, chiropractic, herbalism, veganism while all having some beneficial practices, are not safe harbors for the Adventist message divorced from thoughtful science.
Thirdly profit driven health care, may crash due to factors outside of Adventism. Political change and conflict are inevitable. Is it wise to ride a doomed train to its inevitable crash? What Obama tried, and Trump is trying, may lead to a Bernie socialism and end private hospital care like it did in Canada or the UK.
If Adventist health care is to survive as a ministry, should we not consider alternatives to our present risky course? Can we get more spiritual bang out of our health care buck?
1 http://www.doh.wa.gov/Portals/1/Documents/5300/Comp2014-043.pdf (Adventist Health as of July 24, 2017 has closed this hospital due to accumulated “losses” over the last 30 years of $68 Million. It looks like firing the top two executives and operating with less expensive employees might have cut those 30 year “losses” nearly in half, preventing the catastrophic closure of services in Walla Walla)
3 A publication of data from 2010 showed four “Adventist Health Sacrament executives” earning total compensations over $1 Million a year in an article titled “Sacramento’s non-profit medical millionaires”, these salaries too will not be less in 2017. http://www.bizjournals.com/sacramento/news/2012/06/27/sacramento-nonprofit-medical-millionaire.html#i17 .
4 http://www.bizjournals.com/sacramento/news/2017/01/27/adventist-heath-gets-green-light-for-new-roseville.html and http://californiahealthline.org/morning-breakout/sutter-health-adventist-health-system-west-had-the-highest-paid-health-ceos-in-sacramento-area/ .
5 See Adventist Today, https://atoday.org/adventist-health-transfers-110-years-of-walla-walla-hospital-care-to-sisters-of-providence/ and a later report https://atoday.org/adventist-health-to-close-walla-walla-general-hospital/ .
6 http://www.medscape.com/viewarticle/862085#vp .
Dr. John B. (Jack) Hoehn, MD(LLU), CCFP(Canada), DTM&H(London) has been an Adventist Physician for 45 years. He has worked in countries with socialized medicine, little or no medicine, and in the USA. He is a Family Physician, but has also been an obstetrician and surgeon. This article is part two of a 3-part series on the Adventist church’s involvement with health care.