It’s hard to feel sorry for anyone paid north of $2 million in a single year, but I do feel a twinge of sympathy for Dr. Brad Baltz, a hematologist/oncologist for the Central Arkansas Radiology Therapy Institute. Other doctors working for nonprofit organizations in the state are also being paid handsomely, yet he alone was pictured on the front page of Arkansas Business last week just because his compensation package was the biggest of all.
Back when Baltz practiced with Hematology Oncology Services of Arkansas, he didn’t have to worry about his compensation being public information. But after the practice was sold to CARTI and he became a highly compensated employee of a nonprofit, the public suddenly had a right to know how much he was being paid by that tax-exempt organization.
This is an Opinion
Nonprofits, it’s good to remember, compete for the same private-sector labor as for-profit companies, and people with specialized skills are always going to command higher salaries. But even those of us who seek out salary data — for state employees, public company executives, university administrators — have to be impressed with just how much medical professionals are being paid.
There were other kinds of nonprofits represented on that list, including Southwest Power Pool, whose CEO Nick Brown was paid $1.9 million in 2014. But the vast majority of the 175 names on the list were physicians or health care administrators, and it’s impossible not to mentally connect those fabulous salaries and the health care inflation that has become an intractable problem for our country.
When we look at the salaries paid to the top executives of Wal-Mart or the Razorbacks head coaches, we realize that they are members of extremely small clubs. But when we look at the salaries being paid to doctors — and not just the most highly compensated — we realize that they are representative of the salaries flowing to the thousands of Arkansas physicians who don’t work for nonprofits.
Or are they?
Baltz’s salary in the year that ended June 30, 2015, was $2.3 million, and he got some pocket change (a bit over $14,000) in other compensation that year, according to the Form 990 that CARTI filed with the IRS. I assume he’s a first-rate oncologist, a highly paid specialty and one that is close to the heart of many of us.
Still, he earned as much in that one year as the median American household earns in 40 years, and he’s just one CARTI doctor. The top five CARTI physicians each earned an average of $1.7 million that year, while the most highly compensated hematologist at the University of Arkansas for Medical Sciences, Gareth Morgan, was paid $857,450. That looks like darn good pay until you compare it with the CARTI docs.
Meanwhile, CARTI, as Arkansas Business also reported last week, is struggling financially. CEO Jan Burford explained a lot of the reasons for the operating losses that have hurt its credit rating, and paying the highest physician salaries wasn’t on her list. In fact, she said CARTI “would not retain good doctors” if it paid much less than what she said was the “market level.”
Burford certainly knows her business better than I do, but I did some power Googling and several reports I found suggest that seven figures is considerably above-market nationally, even for oncologists.
In 2014, Modern Healthcare, in the trade journal’s annual compensation survey, found that oncology-hematology specialists were averaging just under $400,000 a year; in 2015 — the year of CARTI’s most recent 990 report — the average inched down a smidge. That makes Dr. Morgan’s pay at UAMS look a lot better than a comparison with CARTI, doesn’t it?
Noted: Morgan is a hematologist/pathologist, not a hematologist/oncologist like Baltz. How much difference that makes in their market value I can’t say, but I do know for a fact that other employers of physicians feel that CARTI is skewing the market.
I also know that usual market forces simply don’t work well in health care, as much as we’d love to think they do. It’s almost impossible to know how much we’re spending on health care until it’s already spent. When we get the bill, we know it’s a fiction until our health insurance carrier works some discount magic. When we finally learn how much we owe, we have no idea whether the price is fair — but we pay it, which makes that the market price, right?
The same is true for these highly paid doctors: If a doctor is being paid a million or two, that must be the going rate. And who are consumers to question it?
Gwen Moritz is editor of Arkansas Business. Email her at GMoritz@ABPG.com.