At 1:30 p.m. on Thursday, the University of Vermont Health Network's board of trustees and its president and chief executive officer, Sunny Eappen, announced Eappen's resignation.
UVM Health Network did not cite a reason for Eappen's departure in its announcement. The health network's board chair Tom Golonka did say that the board's focus "is on ensuring the health system continues to evolve as a strong partner in reducing expenses, slowing the growth of hospital costs and delivering high-quality, sustainable care."
About an hour prior to that announcement, Owen Foster, chair of the Green Mountain Care Board, slammed the health system on Vermont Edition for the organization's high executive pay and bonuses.
"If you demand top dollar, maybe this isn't the right environment for you," said Foster, whose organization serves as an independent regulatory body for Vermont hospitals and insurance companies. "Your market is really driving success for the state, and you should be thankful for the opportunity to do that, and not say, 'oh, I'm only getting the 35th percentile. I don't want to be here.' I don't think we want those people."
Last fiscal year Eappen earned a salary of $1.3 million, as well as $600,000 in other compensation. When he appeared on Vermont Edition in mid-July and was asked about his salary, in the context of his organization’s financial struggles and the decision to cut certain medical services, Eappen noted that his salary and bonus put him in the 45th percentile for hospital executives.
"It's a challenge," Eappen said, "because when you're trying to recruit very good people, and you say that we are not going to have that as part of our compensation, it hurts us in our ability to recruit folks."
Last week the Green Mountain Care Board set hospital budgets for the coming fiscal year. Included in those decisions were limits on some hospital executives' compensation.
"We did cut Dr. Eappen's salary and some other executive salaries, yes," said Foster. "They sent us a letter saying it was illegal and improper, and we determined it was okay." This year the state granted the Green Mountain Care Board enhanced authority to oversee executive compensation.
In July, the Green Mountain Care Board ordered UVM Medical Center and Central Vermont Medical Center to significantly cut their commercial insurance rates. Later that month, the health network laid off 77 staff members across the organization. The health network's board also announced it would not give bonuses to any executives, including Eappen.
The Green Mountain Care Board also regulates insurance companies but does not have the same level of authority to regulate their executives' salaries. Last year the CEO of BlueCross BlueShield of Vermont made $943,890 with $66,215 in other compensation, according to a WCAX report, and the CEO of MVP Health Care made $1,035,000 with $1.2 million in other compensation.
Note: This story was updated to describe the various executives’ additional compensation beyond their base salaries with consistent language.
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