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November 11, 2009 > Washington Hospital Continues Growth and Service to Community

Washington Hospital Continues Growth and Service to Community

The environment this past year has been one of volatility and chaos. Our State government struggled for months to pass a budget. We suffered through a financial crisis of proportions not seen in decades. Needed health care reform is in heated debate in our nation's capital. Locally, this has been compounded and felt personally with significant job loss, the pending NUMMI plant closure and the real estate downturn.

Fortunately, our not-for-profit, community-owned Washington Hospital Healthcare System is a bright spot in the middle of all that's been described. The Hospital has enjoyed a successful year on many fronts. The Hospital's success has meant that lay-offs have been avoided during this challenging economic time and unlike some large healthcare systems in California that have had to cancel major construction projects, Washington Hospital has begun many construction projects including our Central Power Plant project. Additionally, initiatives focusing on improving the health of our community, like the Cardiovascular Institute, the Neurosciences Program, the Stroke Program and the Joint Replacement Program have grown.

"Washington Hospital is a vital part of this community. As it thrives, so does our community," said Dr. William Nicholson, the president of the Washington Township Health Care District Board of Directors. "Our mission is to ensure that this institution continues to succeed on behalf of this community to ensure that quality health care is available to all District residents."

At the November 5, 2009 meeting of the Washington Township Health Care District Board of Directors, the Board considered, as it does annually, the Chief Executive Officer's compensation and contract and discussed the many successes achieved this past year. The Board of Directors reported that our CEO's performance has been outstanding given the overall financial and strategic success of Washington Hospital. The Board of Directors also reviewed and discussed the compensation recommendation made by Integrated Health Strategies - one of the nation's leading health care executive compensation firms. Integrated Health Strategies was engaged by the Board as an independent consultant because of its reputation in the industry and the need to ensure that our CEO's compensation is evaluated by an independent group.

"Because of Chief Executive Officer Nancy Farber's excellent leadership and vision, this Hospital is on solid financial ground and fiscally outperformed many hospitals in California this year. Additionally, the Healthcare System achieved numerous strategic and community initiatives," said Dr. William Nicholson. "My colleagues and I considered the matter of CEO compensation in a very thorough and careful manner. We are proud to unanimously approve a 3.5 percent salary increase for Nancy Farber. Additionally, as a consequence of the outstanding achievement on so many fronts, Ms. Farber was eligible for an incentive award in the range of 40% of base salary which the Board felt was clearly justified, especially considering that the District's net income was more than $17 million over the budget and approximately $20 million was provided in charity care."

The salary increase is lower than the recommendation of the Board's third-party, independent consultant Integrated Health Strategies. It exhaustively studied Washington Hospital Healthcare System and compared the compensation of our CEO with others in a peer group to determine an appropriate salary range to achieve the Board's philosophy of compensating our CEO around the 65th percentile of comparable hospitals.

"The reduced compensation increase offered to Nancy Farber is in no way reflective of her ability and performance," said Dr. Nicholson. "We simply felt that we had to limit compensation increases to be consistent with recently negotiated contracts with bargaining units in the hospital."

"All members of the community should be proud of their hospital. It has been successful because we reinvest every dime of profit back into the community in the form of new programs and services to meet the health care needs of the residents of this District," Dr. Nicholson continued.

Ms. Farber said she is "humbled by the heart-felt gratitude expressed by the Board," that "it has been an enormous honor to be a part of making this hospital such an important resource for the community" and that she "looks forward to building on that success in the years to come for the benefit of this community."

Under Nancy Farber's leadership this past year, Washington Hospital was able to provide more than double the amount of charity care provided in 2008. In addition, the hospital began the building of the Central Power Plant project, one of the largest ongoing construction projects in the Bay Area and achieved growth in important strategic areas including the joint replacement, neurosciences and stroke program. This has occurred without any taxpayer assistance for operations or salaries.

Each of these accomplishments has occurred in very tough economic times, and is a direct reflection of the success of the institution and its leadership," said Dr. Nicholson. "Residents of the health care district can be assured that they have a state-of-the-art, community hospital that is responsive to their needs in their own backyard. Today's investments will continue to pay off by improving health in the community."

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