Is Sentara CEO Howard Kern guaranteed compensation of several million dollars a year for life? Kern’s total not-for-profit compensation was $5,750,022 in 2018. Did Kern offer a similar deal to top executives at Cone Health, a North Carolina not-for-profit Kern wants to merge with in an $11.5 billion deal?
That was the substance of a tip we received in late December. If true, it seems to be an unusual arrangement for a not-for-profit health care system – especially one based in Hampton Roads, Virginia, where health disparities with minority and low-income populations are among the greatest in the nation. We spoke with two health care reporters and they had never heard of lifetime compensation for not-for-profit healthcare executives.
We reached out to Sentara media relations for confirmation. Spokesperson Dale T. Gauding was vague. We emailed Douglas Allred, external communications manager at Cone Health, but he didn’t respond.
Calling Howard Kern
So, we called Mr. Kern himself to get a direct answer. As you can hear below, Kern wouldn’t answer the question, then ended the call by hanging up:
Since we began our investigation last year, we learned that Sentara wants to change its decades-long relationship with Eastern Virginia Medical School (EVMS). To achieve its merger, C&BP sources say Kern is angling to keep EVMS’s profitable Medical Group, from which it draws a lucrative caseload stream. Kern’s Sentara also wants to keep access to the low-cost, highly skilled EVMS residents for which it receives funding from Medicare and profits annually.
At the same time, Kern is pushing for EVMS’s medical school be combined with Old Dominion University, a public institution. This would effectively offload EVMS’s operating costs onto Virginia taxpayers.
Sentara Healthcare is a tax-exempt not-for-profit healthcare organization. Estimates generated from publicly available financial statements show a 62% increase since 2015 in its net assets to an estimated $6 billion by mid-2020. For context, this is roughly $5 billion more than the cash reserves of Virginia.
How did Sentara get to be so wealthy? We don’t know yet. After all, Mr. Kern doesn’t want to answer questions.
Do you have information to share? Send us a note through our confidential tip line.
Scott Peterson is executive director of Checks and Balances Project, an investigative watchdog blog holding government officials, lobbyists, and corporate management accountable to the public. Funding for C&BP is provided by Renew American Prosperity and individual donors.
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