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The Wednesday commentary written by three union leaders was passionate, but not very helpful ("Merger would put profits ahead of health," Opinion Exchange).
Sanford Health and M Health Fairview are nonprofit institutions. They are required to channel surplus earnings back into the institution or the community. It is true that health care markets with one dominant system tend to have higher prices, but our metropolitan area has several competing entities. Competition in rural areas has already been gone for decades.
The authors mentioned high CEO salaries multiple times in their article. While the salaries do seem inflated, the salaries also reflect the market rate. Other large-system CEO salaries in Minnesota range from $1.9 million to $3.4 million per year. (Andrea Walsh at HealthPartners, on the lower end, took a voluntary 40% pay cut when the organization had to cut staff.) The salaries are determined by the often unpaid board of directors of their nonprofit organizations.
High CEO pay affects hourly hospital workers wages paradoxically. A recent study in Health Affairs revealed that hourly workers in hospitals with low CEO pay average $30 per hour while the same workers in hospitals with high CEO pay receive an average $34 per hour. Perhaps union workers are better served by highly paid leadership.
The problems the union leaders cited — increased health care costs, hospital closings and low worker wages — occurred within the current, non-merged system. The problems will get worse. Government reimbursement for health care is decreasing particularly in rural areas, COVID-19 support is being terminated, and our population continues to age with a higher demand for services. None of these important issues will be solved by maintaining the status quo, and a merger may be a viable solution for some markets. It is clear there will be more hospital closures in this decade. Pricing will have to be adjusted downward either by the market or the government. The health systems will require innovative and flexible leadership to survive those challenges.
The authors could help by suggesting positive changes rather than arguing to keep things the same. If the combined Sanford and M Health Fairview systems can provide better care, it is worth consideration using a more sophisticated analysis than CEO salary levels. The assertions that safety and health will be compromised are not supported in their commentary.