Sunny Eappen, president and CEO of the University of Vermont Health Network, speaks at an event in South Burlington on Dec. 15, 2022. File photo by Glenn Russell/VTDiggerTop executives at the University of Vermont Health Network received bonuses worth a combined $3 million at the end of last year, according to the hospital network.That sum, which the network referred to as “variable pay,” was paid out to the network’s top 19 senior leaders — including President and CEO Sunny Eappen, vice presidents, and the “heads of the various medical entities,” Kerin Stackpole, former chair of the network board of trustees’ compensation committee, said in an interview. The network, which encompasses six hospitals in Vermont and northern New York, declined to provide a breakdown of who received what sum. But if divided equally among 19 people, each would receive nearly $158,000. The exact salary figures for the top executives were not clear, although a list of network executives’ compensation in 2023 ranges from roughly $400,000 to $1.8 million, including bonuses.The revelations come as rising costs are straining the state’s health care system — and just after the network announced wide-ranging cuts to patient services.READ MORE ‘Highly, highly competitive’ Members of the compensation committee decide to pay out bonuses based on a predetermined list of goals, according to Stackpole, who left the committee and the board of trustees at the end of last year.In 2024, the goals included such factors as employee retention, whether the hospital made its operating margin, and “patient experience,” according to Annie Mackin, a network spokesperson. (She noted that the network “set the bar high” and did not actually reach its patient experience goal.)  Mackin said that the network has trimmed $40 million in administrative costs in the past few years, and that the 19 executives’ pay account for only about 1% of the network’s payroll.And compared to national figures, executive compensation at UVM Health Network “is still pretty modest,” said Stackpole, the former compensation committee chair.  “It is an important thing to be able to attract top talent, so that people in Vermont and upstate New York, through the network, have good care,” she said. “We are in a competitive — a highly, highly competitive — market for that top talent.”After an extensive review of hospital data, the compensation committee generally makes its final decisions on incentive pay at its last meeting of the year, Stackpole said, usually in late November or early December. She did not say exactly when 2024’s last meeting took place. But on November 14, the network announced a slate of sweeping cuts to patient services, saying that orders from a state regulator, the Green Mountain Care Board, forced their hand. Under the board’s orders, the Burlington-based University of Vermont Medical Center had to cut its private insurance costs by one percent. The board also did not allow the network’s hospitals to raise their patient revenue by as much as they requested. In response, the network made the controversial announcement that it would shutter an inpatient psychiatric unit at Central Vermont Medical Center, offload dialysis clinics and end kidney transplants at UVM Medical Center in Burlington, among other cuts. Given those cuts to services, why did the board move forward with the bonuses?“I don’t want to speculate with you on what could have been,” Stackpole said when asked. “I know that what we do is we look at real data every year as to what goes on with regard to performance.”‘Not immune’Many Vermonters have pointed to prices at hospitals as a significant driver of costs across the state, with some critics taking particular aim at what they see as unacceptably high administrative costs at network hospitals.Just Thursday, advocates and lawmakers announced plans to unveil a bill to cap hospital executive compensation at no more than 10 times that of the hospital’s lowest-paid patient-facing workers. The bill would also require hospitals to make up-to-date financial information public and limit hospitals’ ratio of administrative-to-clinical costs. “Our health care system is not immune from the exponential widening of the inequality gap we are seeing nationwide,” Rep. Esme Cole, D-Hartford, said at a press conference at the Statehouse. “We have become so complicit in these trends, in fact, that when hospital budgets get tight, the suggested remedy is not a cut at the top — but rather in the programs that affect Vermont’s most vulnerable, such as our dialysis clinics or the residential psychiatric unit.”That $3 million for top executives was not the entirety of the bonuses paid out in the network last year. Mackin, the UVM Health Network spokesperson, said in an email that 225 network employees were eligible to receive variable pay last year: “people working in areas like supply chain, laboratory, pharmacy, nursing directors, and others,” she said. Across the network, employees received the majority of the variable pay they were eligible for — between 65% and 90%, Mackin said. It was not immediately clear how much in total was paid out.Mike Fisher, Vermont’s chief health care advocate, said in an interview that hospital leaders should “understand what a horrible message something like this sends” in a state struggling to pay for health care.“If there’s an executive at a Vermont hospital that thinks they can go make more money somewhere else, and is looking for that? Good. Go for it,” he said. “We need leaders who are committed to our communities. And who are well compensated — but not excessively.”Read the story on VTDigger here: UVM Health Network executives made $3 million in bonuses in 2024.