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Executive pay soars as one of Washington state's largest non-profits makes cuts.
King 5 Investigative Report - May 10, 2012

Many dentists in Washington are still reeling from big cuts in payments to providers made last year by the state's largest dental insurer. To make up, dentists say they've had to increase the number of patients they see each day to make up for the losses.

"It's the patient that loses," said longtime north Seattle dentist Dr. Chris Pickel. "We basically have to see more patients. It's something we don't like to do. We want to spend time with people. We like to spend time educating them."
Last year, Washington Dental Service, part of the nationwide Delta Dental network, made across-the-board 15 percent cuts to the fees it pays to dentists for all procedures. WDS said the cuts allowed it to reduce the premiums it charges employers for dental insurance, a move that makes its service more competitive in the marketplace.
All Smiles for Top Executives
A KING 5 investigation shows that Washington Dental's top executives have been feeling no pain.
An examination of tax records shows that executive at WDS have enjoyed a 32 percent pay raise over the five-year period ending in 2010.  Executive pay totaled $5.8 million in 2010.
The highest paid officer that year was WDS CEO James Dwyer, who earned $1.2 million.
"I'm happy with my compensation," Dwyer said in an interview with the KING 5 investigators. "There's no hubris in this. I am really very happy. I gave 10 percent of it back this year."
Non-profit Status
Washington Dental Service may sound like your typical corporation. But it's not. It's a non-profit organization that enjoys millions of dollars in tax breaks each year. IRS records show that WDS was exempted from paying taxes on $13.7 million in net income in 2010.
"If they spend so much money compensating executives and generating profit and returning less of that money to patient care then, obviously, we are very concerned about that," said Dr. Pickel.
Social Mission
CEO Dwyer emphasized that Washington Dental is not a charity; it's what the IRS calls a "social welfare" organization. Its mission is promoting oral health in Washington State.
"We fund our foundation to the tune of $5 million a year," said Dwyer.
WDS spent $5 million to help fund The Center for Pediatric Dentistry in Seattle. It's a ground-breaking clinic that targets the oral health of infants and children.
"These are initiatives that require a lot of money and we're quite proud that we don't have shareholders that we dividend the profits to," said Dwyer. "We put it into our tax exempt mission."
State Senator Cheryl Pflug (R-Maple Valley) applauds the big dollar commitment. Yet she said she still has concerns about non-profits like Washington Dental Service.
Pflug has been a vocal critic of health care organizations, primarily hospitals, that receive millions of dollars in tax breaks and pass the rewards onto executives instead of the community.
"I don't know a lot of people that got a 45 percent increase over the last 5 or 6 years. So that sounds suspicious," Pflug said of WDS executives' pay.
Dwyer said last year's cuts to providers followed a study that showed that WDS paid dentists among the highest fees in the nation, and that WDS needed to cut those rates to remain competitive.
Dentists may not appreciate Dwyer's million-dollar advice on how they can make up for the lost revenue – work harder.
"Number one: They could start working five days a week," said Dwyer.

Reader Comments (17)

Wasn't WDS initally started and ran by Dentists? Dwyer worked for the Port of Seattle. He doesn't know anything about Dentistry, or even how a practice runs. I have been in private practice for 17 years, and have busted my butt to make a living. With a bad back, bad arm, eyesight problems, and constant cuts one way or the other and increases by dental supply companies and dental labs, I feel like I'm being punished for getting a dental education so that I can help people understand and learn how to stay healthy. Dwyer is an arrogant piece of ________. Fill in the blank. He needs to be fired.

Dweyer conveniently doesn't mention that the foundation that he is bragging about was set up from unreturned withholds that WDS held back from dentists a number of years ago to bail themselves out of a financial bind they had gotten themselves into. They continued the withholds far beyond what they needed to survive and refused to return the excess money back to the member dentists they took it from.
I feel the scam of posing as a "non-profit" and funneling the excess money to executive and management compensation is a practice that needs to be stopped.
Washington Dental Service has turned from a company that was interested in helping keep our state as a leader in quality dentistry to a greed based company that has dental mediocrity or less as it's companys mission.

05.15.2012 | Unregistered CommenterJon Kvinsland

WDS's and Jim Dwyer's total loss of reality with the concept of patient care and quality of dentistry, with the compassion and care needed to provide for patients,and their lack of the everyday stress and strain needed to provide quality dentistry is shown in their
senseless remarks about needing to work five days and see a greater number of patients. Their cut in our reimbursement and their salary increases is one of the main reasons that I chose to retire at the end of last year!

05.15.2012 | Unregistered CommenterKen Ring DDS

This over-paid executive has no idea how hard work dentistry is. Working in a small hole, trying not to hurt the patient and still do a good job is high stress. It takes 3 days for a dentist to re-charge to be able to work 4 days.

Dentists have one of the highest suicide and divorce rate professions. To work this hard for less pay removes the incentive.
Why would the CEO even think he deserves these pay raises and the hard working dentists need to be penalized?

WDS needs to lose its non-profit status!!

05.16.2012 | Unregistered CommenterCarol M Koenig

After viewing Mr. Dwyer on King 5 news I too was upset by his comments and found his apology lacking. However, my ire is directed at the board of WDS. Mr. Dwyer’s compensation is approved by the board and he is their chosen leader of the company. For a company that was started by dentists and has been historically well supported by dentists in a short period of time he has reversed that foundation. I am of the opinion the board needs to take action to reverse the "bad will" that they and Mr. Dwyer have created. Unfortunately, I am not sure this will occur as the board is no longer accountable to its members or anyone else that I can ascertain.

05.16.2012 | Unregistered CommenterGreg Fjeran DDS

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