A few weeks before Thanksgiving, my husband, a hospice social worker, was told that his hours were being cut back from full to part-time. The explanation given to him, a six-year employee with solid performance reviews, was that the hospice’s census had declined and could no longer support a full-time bereavement counselor. The fact that my husband had taken on an extra caseload of individual hospice patients and families (on top of his bereavement duties) didn’t seem to register with his new bosses.
It was only after reading this recent article that I understood the real reason behind the reduction in pay foisted on my husband and another social worker at the same hospice. They worked for a subsidiary of the for-profit health care company, UnitedHealth Group, whose CEO has the highest CEO-to-worker pay ratio of any Fortune 50 company in the United States. According to the Minneapolis Business Journal, Stephen Hemsley made 1731 times what the typical UnitedHealth worker made last year, or $1731 for every dollar they made. Hemsley was paid nearly $102 million last year, while the median annual pay among the company’s 80,000 employees was $58,700, according to a survey done by PayScale.com.
That salient fact may also explain why UnitedHealth Group went after my husband, essentially forcing him to look for another job. As a seasoned social worker, he was earning well more than the median income most UnitedHealth nurses and social workers make. And he was not the only “over-paid” UHG employee to feel the heat. A colleague of his at the same hospice who was also earning more than the median income was made to feel so uncomfortable that she read the tea leaves and found another job before the axe fell on her as well.
Now, there’s no question that in the current economic environment, hospices, along with nursing home facilities and home health care services, face a challenging future. Even though hospice and palliative care for dying people is much less expensive than the end-of-life care routinely given to terminally ill patients in hospitals, the federal Centers for Medicare and Medicaid Services (CMS) are implementing drastic cuts in hospice reimbursement, which will amount to about $12 billion in total cuts to the hospice industry over the next few years, according to the National Association for Home Care and Hospice. So both non-profit and for-profit hospices have reason to worry about their bottom lines.
But why take those cuts out of the hides of the nurses and social workers on the front lines of hospice care every day? Why not do something about the exorbitant pay for top executives at for-profit health companies? I don’t care how successful UnitedHealth Group is on Wall Street; there is no reason why its CEO should be earning $102 million a year when its front-line workers are being put out of work. And indeed, one article I read in the Hospice Management Advisor, (a subscription-only journal), cautioned hospices not to lay off or reduce the hours of its caregivers because that hurts the morale of the entire organization and prompts other employees to seek employment elsewhere (which is exactly what’s happening at my husband’s former hospice).
To me, this case illustrates the fundamental problem with for-profit health care. In hospice (as in all of health care), the needs of patients and their families should be the first priority. But in for-profit companies, the first priority is creating wealth for top executives (like Stephen Hemsley) and its shareholders, and when that results in lay-offs and pay reductions for front-line workers, continuity of care is disrupted and patients and their families suffer. My husband was lucky enough to find another full-time job fairly quickly, but the patients and families at his former hospice lost a compassionate caregiver days before the holidays. That’s no way to run a hospice.