The Hereford Model

James Hereford built his reputation applying the ‘lean model’ to healthcare. First developed in the automotive and manufacturing industries, lean thinking has recently infiltrated the healthcare sector. While lean thinking begins with identifying and  ‘removing waste’ under the guise of ‘adding value’ to the customer or patient, the ultimate goal is to boost the bottom line.

Nurses experience the “lean model” as:

  • Just-in-time staffing and supplies
  • Not working at the top of your license
  • Cuts to HUCs, Dietary, Environmental Services, Nursing Assistants

The result of the lean model is short staffing and lack of supplies like PPE. Do nurses and patients deserve better?

Fairview Top Salaries

Despite claiming double-digit increases are “unrealistic” for nurses, see how Fairview executives have fared. [1][2] 

James Hereford

CEO

CEO James Hereford received a 90% increase between 2018 and 2019. At $3.56 million per year, he earns over 40 times the salary of the average nurse in Minnesota.

Laura Reed

CNO

CNO Laura Reed received a 77% increase between 2018 and 2019. Her total compensation is now $1.29 million.

Mark Welton

CMO

CMO Mark Welton, MD received a 31% increase from$842,825 in 2018 to $1,108,613 in 2019.

Did You Know?

  • Fairview has spent over $72 million on Executive, Director, and top employee compensation between 2017 and 2019.[3]
  • In December 2021, the Board of Directors approved a three-year plan to improve the system’s finances.[4] Don’t you think nurses deserve to know what’s in it?
  • Fairview received $255.6 million in COVID-19 grant funding, including nearly $19 million just this year alone.[5]
  • In 2022, Fairview will pay the University of Minnesota Medical School at least $50 million, as well as $33.6 million to University of Minnesota Physicians under the M Health Fairview Agreement.[6]
  • On an investor call in April 2022, CFO Hayes Batson noted that Fairview was paying travel nurses wages as high as $250 per hour.[7]
  • A national analysis found that hospitals in January 2022 spent a median of 38.6% of their total nurse labor expenses for contract travel nurses, up from a median of 4.7% in January 2019.[8]

SOURCES

[1] 2017 – 2019 990s; U.S. Bureau of Labor Statistics, May 2019 Metropolitan and Nonmetropolitan Area Occupational Employment and Wage Estimates, https://www.bls.gov/oes/2019/may/oes_33460.htm.

[2] Fairview Health Services, Fairview Believes You Deserve Fair Wages and Benefits (2022).  

[3] 2017 – 2019 990s

[4] Fairview Health Services, “Continuing Disclosure Statement for the Three Months Ended March 31, 2022,” Electronic Municipal Market Ac-cess (EMMA), https://emma.msrb.org/P11600164-P11234483-P11657192.pdf. 

[5] Fairview Health Services, “Continuing Disclosure Statement for the Three Months Ended March 31, 2022,” Electronic Municipal Market Ac-cess (EMMA), https://emma.msrb.org/P11600164-P11234483-P11657192.pdf. 

[6] Fairview Health Services, “Continuing Disclosure Statement for the Three Months Ended March 31, 2022,” Electronic Municipal Market Ac-cess (EMMA), https://emma.msrb.org/P11600164-P11234483-P11657192.pdf. 

[7] Fairview Health Services, “Investor Relations Update Conference Call,” April 26, 2022. 

[8] American Hospital Association, “Massive Growth in Expenses and Rising Inflation Fuel Continued Financial Challenges for America’s Hospitals and Health Systems” (American Hospital Association, April 2022), https://www.aha.org/system/files/media/file/2022/04/2022-Hospital-Ex-penses-Increase-Report-Final-Final.pdf.