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Hospital board pleased with profit

By Staff | Feb 11, 2008

United Hospital District boardmembers received good news that the health care facility finished with a profit last year.

The unaudited year-end net income for the hospital in 2007 totaled $2.077 million. Although that’s a decrease from 2006, it is $747,016 more than the $1.3 million budgeted for the year.

Hospital administrator Jeff Lang says last year’s profit may sound like a lot, but the facility is planning to spend millions to improve the quality of care for its patients. He says capital expenditures in the next five years will total $16.5 million.

The hospital’s financial success will mean a bonus for Lang, who assumed his duties on Jan. 15, 2007.

Under an executive incentive compensation plan, hospital board members approved a total bonus of $8,594 for Lang. Of that amount, $3,125 is for exceeding a “stretch” net income standard of $2 million set for last year.

As a result of Lang’s annual performance evaluation, an executive committee of the hospital’s board also recommended continuation of Lang’s contract.

Boardmembers voted to increase his annual base salary by 5.5 percent — from $125,000 last year to $132,000 this year. He also is eligible for an incentive pay potential of up to 10 percent of his salary.

Despite the pay hike, a CEO compensation report compiled by the Minnesota Hospital Association shows Lang’s salary is at the 37th percentile for a facility the size of UHD.

Currently, 230 people are employed at United Hospital — which had annual gross revenue of about $27 million last year and a payroll of $8.6 million.

Board chairman Dennis Zitnak says the evaluation covered nine areas:

• board relationships;

• community relations;

• medical staff relations;

• communication;

• strategy development;

• quality / performance improvement;

• financial management;

• human resource management;

• leadership.

Zitnak says 12 of the 13 board members completed and returned the evaluation.

“Overall it was excellent feedback on Jeff’s performance. It was very positive” he says. “But, there’s always room for improvement.”

The performance summary identified human/financial resource management, communication, strategy development and quality/performance improvement as Lang’s areas of greatest strength.

Areas for potential improvement included providing communication/information to the board in a timely manner and community relations/involvement.

Meanwhile, hospital emplo-yees have an opportunity to earn a $100 end-of-the-year pay incentive under a program implemented last year.

Employees must attain certain inpatient and emergency room satisfaction benchmark levels to receive the $100. No bonuses were paid last year.