November 30, 2022

WA Hospital Allegedly Used COVID Relief Aid To Trigger $1.9M Bonuses For Execs

WA Hospital Allegedly Used COVID Relief Aid To Trigger $1.9M Bonuses For Execs

Updated on 11/30/22 to include a statement from EvergreenHealth

Original article published on 11/28/22 

On June 21, 2022, the Board of Commissioners at EvergreenHealth Kirkland voted by a narrow margin, 4 to 3, to include COVID-19 relief funds in the calculation for the annual revenue. 

The facility received $43 million in relief funds through the CARES Act in 2020 and 2021. By including the relief aid in the annual revenue, $1.9 million in bonuses were triggered. Now, 206 managers will receive an average bonus of $9,200.

EvergreenHealth Care in Kirkland Overview

EvergreenHealth Kirkland is a public hospital located in Kirkland, Washington. It is run by elected officials. A percentage of tax money goes to the support of the facility. Approximately $19.3 million of the operating expenses come from the levy paid by taxpayers each year.

The bonus program for management at EvergreenHealth Kirkland is considered a leadership at-risk compensation (LARC). This means management receives their salary, then, depending on how well the hospital does during the fiscal year, they may receive additional compensation in the form of a bonus. 

What is the CARES Act?

The CARES Act was established on March 27, 2020, to provide relief for industries and people hardest hit by the pandemic. More than $15 billion was paid out through the CARES Act to over 60 large hospital chains in the US. 

This is not the first time a large facility has been accused of using pandemic stimulus money to pay bonuses to hospital management. 

The Opposition

Bob Yoder, a well-known blogger, received an anonymous letter from an alleged EvergreenHealth Public Hospital Employee. The letter discussed the proposal and the concerned employee stated, “The hospital is struggling to keep nurses and other key staff to serve its patients, and those funds could have been used to serve the community and not line the pockets of the administrator.”

One Reddit user, Ozzimo, had this to say, “at $44/hr nurse wage in WA, 1.9 million is enough for about 20 full-time nursing positions. Safe to say they could have fixed 70-80% of coverage issues with that bonus…”

Another Reddit user, tiredhcworker, stated, “Unfortunately Evergreen admins do not listen to their employees or take ideas from that outside of their circle. It’s clear they don’t care about their staff or the community.”

The Board Of Commissioners’ Opinions

Hospitals in Washington have been suffering huge net losses so far in 2022. Statewide, it is reported that hospitals have lost nearly $929 million just in the first three months of 2022. 

EvergreenHealth is already showing an unaudited net loss of $29 million for the first half of 2022. Those on the board opposing the proposal cited this as the reason for their opposition. Commissioner Minerva Butler said, “that’s one of the big reasons I voted no.” 

Commission Chair, Tim McLaughlin, who was in favor of the proposal, stated EvergreenHealth, “did not divert CARES money to line the pockets of executives or anything like that.” He goes on to explain this money was meant to offset the losses experienced due to the pandemic and that is why the decision was made to include the funds in with the annual revenue.

EvergreenHealth Statement

On November 30, 2022, EvergreenHealth provided the following statement to 

"The EvergreenHealth Board of Commissioners are elected officials who assume their positions and make determinations based on what they believe to be in the best interest of the organization, staff, and most importantly – the patients and community it serves. While this topic is complex, it is important to reiterate that CARES funding was not misused in any way, and to understand that the program referred to includes nursing leaders and leaders in operating rooms, radiology, labs, emergency rooms, urgent care practices and other vital clinical roles. EvergreenHealth is a highly accountable organization and remains so."

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