By Bob Katzen

The Health Care Financing Committee held a hearing on a legislation that would require that in any hospital which accepts state funding, if the CEO’s annual compensation is greater than 50 times the lowest paid employee, the facility will be subject to a civil penalty equal to the amount by which the Chief Executive Officer’s annual compensation exceeds 50 times the value of the lowest paid employee.

Another provision provides that any state-funded hospital whose annual operating margin (profit) is more than 8 percent will be subject to a civil penalty equal to the amount by which the annual operating margin exceeds 8 percent.

“[The bill] represents a necessary step to ensure that our state’s burgeoning healthcare industry is guided by fairness and accountability,” said sponsor Rep. Jim O’Day (D-West Boylston). “As it stands, hospitals and licensed healthcare institutions are some of the most profitable entities in Massachusetts, with executive pay rivaling that of the highest-paid corporate CEOs. Meanwhile, safety-net hospitals – those serving low-income and underserved populations – often struggle to stay afloat. To address this inequity, the proposal introduces financial fairness standards by placing a cap on executive pay and redirecting excess revenue into the public, needs-based system.”

O’Day continued, “When hospitals prioritize profit over patient outcomes, treatments are delayed, emergency departments become understaffed and entire communities are left without critical care. As a result, this legislation is essential to safeguard public health.”