WDBJ7 Roanoke News and Weather NRV Lynchburg Danville | Carilion CEO Ed Murphy opens up about his salary and Carilion's finances

Carilion CEO Ed Murphy opens up about his salary and Carilion's finances

The Roanoke Valley's largest employer generates $2 billion a year in gross revenue.

Carilion Clinic, as the system is now known, operates eight hospitals.  They treat more than 500 Emergency Room visitors a day.  The system employs more than 11,000 people.
 
It's a private, tax-exempt outfit.  That enables Carilion to avoid $54 million a year in taxes.
 
Carilion says it spends $1.50 on community benefits for every dollar it receives in tax exemptions.  With U.S. taxpayers already on the hook for more $700 billion in the financial bailout, how likely is a medical make-over?  Carilion CEO Ed Murphy says he gets asked that a lot.

"I think it's more likely, because we can't afford what we're already spending," says Murphy.

Murphy figures the health care industry better fix it before politicians start dictating changes.  He has a theory about the health care crisis; one, he says, that applies to every public-policy debate.

"For every complicated problem, there's a simple solution, and it's always wrong," he says.

Carilion is tax-exempt. That does not mean it's altogether non-profit.  Certain Carilion facilities, such as the athletic clubs, do make money.

"The reason that we have those is the money to pay for the Level 1 Trauma Center has to come from someplace," says Murphy.

Likewise, certain medical procedures and services do more than break even.  Pediatrics, X-rays and cardiac care make money.

It's no secret that government programs like Medicaid and Medicare pay less than the actually cost of medical services and procedures.
 
Medicare pays 92%, and Medicaid just pays 90%.

Corporate America is subsidizing health care at an enormous rate.  Some businesses consider it a hidden tax.

"In the current climate, there's this growing outrage about CEO compensation," says Murphy.

Murphy's $2.25 million pay package includes insurance and retirement benefits as well as vacation time.

"I'm the first one to admit that I'm very fortunate.  I'm more fortunate than I ever thought I would be," he says.  "I'm a poor kid from a mill town.  My father graduated from high school, and my mother didn't.  And so it is a lot."