CEO of free clinic serving Appalachia saw pay package nearly double over 2 years, tax forms show

The director of the Health Wagon, a nonprofit free clinic that serves one of the poorest and medically underserved areas in the state, earned $520,000 in 2022, a pay package that nearly doubled over the last two years and was 12 times that of the average income of the people she serves.

The increase places her compensation well beyond that of comparable executives in wealthier regions of Virginia, who are paid between $100,000 and $200,000.

The Health Wagon maintains that the compensation of its leadership underwent an objective review, verifying that their top leaders’ compensation was comparable to other leaders in similar positions. However, the Health Wagon leadership declined to provide the findings of the review or answer questions regarding which organizations it compared itself to.

Teresa Tyson, the president and CEO of the Health Wagon, received a compensation package worth more than $520,000 in 2022, according to the most recent tax documents available. This number includes base compensation and benefits for work at the Health Wagon and compensation from a closely affiliated nonprofit where Tyson also acts as president and CEO. This was an increase of 53% from 2021, when her compensation was nearly $340,000 — which in itself is a 27% increase from 2020, when she earned $221,697.

Another top executive at the Wise-based nonprofit also saw a substantial compensation increase: Paula Hill-Collins, clinical director and vice president of the Health Wagon, saw a 39% increase from 2021 to 2022, when she was paid $308,725, tax documents show.

Other employees with the Health Wagon have been paid far above the median statewide salaries for their respective positions. One licensed practical nurse made about $127,600 in 2022, while the median salary for LPNs in Virginia ranges from $40,000 to $50,000, according to Virginia’s 2021 Healthcare Workforce Data Center. Fewer than 1% of LPNs made $100,000 or more in the state that year.

A Wise County official said that questions and concerns regarding the organization’s tax documents and compensation, which is headquartered in Wise, have been raised among residents.

While the salaries aren’t in violation of federal laws regarding nonprofit compensation, which are vague, the jump in pay, especially for Tyson, is unusual, said Joan Harrington, a consultant to nonprofit organizations and donors and a lecturer at Santa Clara University School of Law.

“That salary increase over one year is pretty extraordinary,” Harrington said. “There are much more complex nonprofits where they [the executive officers] aren’t making that much.”

The organization has garnered recognition from the national media including “60 Minutes,” PBS and NBC News for its fleet of RVs that have been modified into mobile health care units. The RVs are parked in various rural communities, bringing health care services to a deeply impoverished and often forgotten region of the commonwealth.

The Health Wagon serves the uninsured, underinsured and those on Medicaid in six counties in Southwest Virginia. The median household income there is about $40,600, with adults and children in more than half of the households in the region living below the federal poverty line, according to data from the National Institute on Minority Health and Health Disparities.

The Health Wagon was founded in 1980 and was the brainchild of Sister Bernadette Kenny of the order of Medical Missionaries of Mary, an international missionary congregation of religious women. In its early days, Kenny delivered health care from her Volkswagen Beetle, serving those living in the Appalachians.

The organization has seen significant growth since then and now has multiple mobile units and three stationary clinics: two in Wise and one in Clintwood.

The organization’s most recent impact report states that it served more than 10,000 unique patients in 2022. In total, the Health Wagon facilitated over 22,000 patient visits, the report says.

Unlike a nonprofit’s tax documents that are filed with the IRS, impact reports are compiled by the nonprofits as a way to tell their stories to donors. They are not government documents, and the figures are not verified by independent accountants.

Salaries higher than others in similar field

The Health Wagon’s revenue climbed steadily from 2018 to 2020, increasing from $2.5 million to $6 million over the two-year period, according to tax documents. Despite the challenges posed by the pandemic, 2021 saw a significant surge, elevating the year’s revenue to $10 million.

Tyson started in the CEO role in 2019, according to her LinkedIn profile. Prior to that Tyson served as the executive director.

More than half of the 2022 budget for the Health Wagon came from individuals and corporations, according to an impact report posted on the organization’s website. Funds from foundations made up 17.3% of the budget, 14.7% came from grants and 10.9% came from in-kind donations and community outreach.

The Health Wagon does not disclose who its donors are on its website.

By the end of fiscal year 2022, when Tyson and Hill-Collins received their raises, the organization was reporting $9.2 million in revenue. After the year’s expenses, its net income was $2.2 million.

Several other key employees were listed as having compensation much higher than the median wage for their respective positions. For example, grant director Rachel Helton was listed as earning $273,306 in 2022, three times more than grant writers in Virginia earning in the 90th percentile, according to salary.com, an online salary comparison tool.

Helton was paid $100,000 more a year than the Health Wagon’s dentist.

Helton declined to comment for this article.

Wise County has not provided funding to the Health Wagon other than when it distributed CARES Act dollars during the COVID-19 pandemic to assist with specific projects, county attorney Karen Mullins said over email.

But Mullins confirmed that locals have contacted county officials with concerns over the compensation listed in the Health Wagon’s tax documents.

“The Wise County Administration has been advised by local residents of compensation concerns for employees of the Health Wagon,” she said.

Compensation figures listed in 2021 tax documents showed a physician who earned $160,400 and a psychiatrist who earned $157,600. These providers were no longer listed on tax documents from 2022.

A review of tax documents filed by other nonprofit free clinics across Virginia found that while the Health Wagon has reported higher revenues than many of them, compensation for its executive officers is much higher than those of free clinics in areas of the state with a much higher cost of living.

The Cross Over Free Clinic in Richmond served 6,662 unique patients in 2023, according to its most recent impact report. Tax documents show a 2022 revenue of $9.5 million and net income at the end of the fiscal year of nearly $989,000. The executive officer was paid $168,231, nearly three times less than Tyson’s listed compensation at the Health Wagon.

The Cross Over Free Clinic also employed a chief medical officer who was paid $186,885.

The Arlington Free Clinic, with a 2022 revenue of $7.5 million, paid its president about $189,000 in 2022 and its director of clinical services $115,000. The clinic provided 8,000 health care visits for about 1,300 unique patients from 2022 to 2023. Its net income at the end of the year totaled $2 million.

The Lackey Clinic, located in Yorktown, served 1,262 low income individuals for 10,987 visits in 2022, according to the nonprofit’s impact report. With revenues totaling $9.6 million at the end of 2022, the CEO was paid a salary of $108,000.

At the end of its most recent fiscal year, the Lackey Clinic’s expenses exceeded its revenue, with the nonprofit in the red $187,000.

The Bradley Free Clinic in Roanoke served 3,209 patients in 2022, according to the organization’s most recent impact report. Total revenue for that year came to $4.9 million, and the executive director of the clinic was compensated $129,514 in 2022, according to public tax documents.

‘Exceptional talent … should be compensated competitively’

The compensation reported on tax documents for Tyson and Hill-Collins reflects not only their base pay, but their total compensation, including benefits such as life insurance, accrual time off and incentive pay, according to a statement from a crisis management communications team engaged by the Health Wagon to answer questions from Cardinal News.

Both executives spend time on clinical work in addition to their organizational duties, according to the statement provided by email on Monday. However, the team declined to answer follow-up questions regarding the number of hours spent on clinical work and spent on administrative work, and declined to provide their base pay.

The Health Wagon’s tax forms show that Tyson worked an average of 40 hours per week in 2022, with 20 hours for the related nonprofit, which serves as the patient billing system and patient portal for the Health Wagon.

“[Tyson and Hill-Collins] serve in multiple critical roles in our organization, not just as administrators and national thought leaders but as skilled and credentialed clinical providers offering everything from basic care to cutting edge procedures in the field,” the statement read. “We stand firm in our belief that exceptional talent, decades of experience, and deep commitment to our community should be compensated competitively.”

Both Tyson and Hill-Collins are nurse practitioners with doctorates in nursing practice. Tyson has worked for the Health Wagon since 1993, according to her LinkedIn profile, and moved up to executive director in 2006. She became the president and CEO of the organization in 2019.

Hill-Collins began at the Health Wagon in 2009, according to her LinkedIn biography.

The median annual salary for nurse practitioners in Virginia was about $100,000 to $110,000 in 2022, according to state data from the Department of Health Professions . The average salary for nurse practitioners with doctorate degrees came to about $138,000, according to Nursing Progress , an online resource for nursing education and career information.

“[Tyson’s] salary is up there with big nonprofits like universities and hospitals,” said Harrington, the nonprofit consultant and lecturer.

Regarding the recent increases to Tyson’s compensation, the statement said that Tyson has opted not to participate in an organization-sponsored retirement plan and that she agreed to stay on as CEO for another 10 years or more.

The executive compensation packages are approved by and voted on by the organization’s board of directors. As the executive director of the organization, Tyson cannot act as a voting member.

The Health Wagon declined to provide the minutes from board meetings in order to protect the privacy of its members and operationally sensitive information. Because the Health Wagon is a private entity, it is not legally required to make board minutes public. The chairman of the board, Steve Smith, along with multiple other board members, were contacted for comment. None provided a response.

The statement from the Health Wagon also included its record of transparency awards such as the National Association of Free and Charitable Clinics Gold Standard in 2023, the Candid 2023 Platinum Seal of Transparency and the America’s Best Charities Seal of Excellence.

The statement added that the Health Wagon’s tax documents are publicly available. However, the documents are not linked on the Health Wagon website. Instead, the financials section prompts users to request the documents from leadership. The website includes links to the nonprofit’s donations page.

Cardinal News used other websites to obtain copies of Health Wagon’s tax information, such as ProPublica’s Nonprofit Explorer and Candid, a tool by GuideStar, which aggregates nonprofit information and tax documents.

“In order to maximize transparency you should have a link to your [tax documents],” Harrington said. “Even if it’s not legally required, this organization is attracting smaller donors and they should have everything made transparent to them before they donate their money.”

A disadvantaged community

The history of the Health Wagon’s service area is deeply intertwined with the rise and fall of the coal mining industry, which once thrived in the region.

Prior to the 1950s, mining was a cornerstone of the local economy, providing ample employment opportunities and drove economic growth. But national shifts in energy markets, environmental regulations and technological advancements led to a decline in coal production, resulting in a significant economic downturn in the region.

As coal mines have closed or scaled back operations, economic hardship in the region has grown, leading to high unemployment.

More than half of the households in Southwest Virginia live in poverty, making up 13% of all impoverished households in the state, according to 2020 data from United Way of Southwest Virginia.

The average household income across the counties in the Health Wagon’s service area is about $40,600, according to data from the National Institute on Minority Health and Health Disparities.

It’s common for tension to arise when nonprofit compensation is held up to the social and economic situations of those the organization serves, Harrington said.

Those working in the social sector are typically underpaid for their work due to the scarcity of funds available. And while Health Wagon employees should be fairly compensated for their work, Harrington said, their recent raises should not be ignored.

“Everyone deserves to be paid for their work […] but also honor the work that you’re doing and the amount of money it takes to serve a poor community,” Harrington said.

Tyson’s salary is more than 12 times that of the average household income in the Health Wagon’s service area, and Hill-Collins makes about seven times more than the people she serves.

Until Medicaid expansion was passed in Virginia in 2019, many residents went without health insurance. Those with employer-sponsored health insurance often face high deductibles, making health care visits and medications inaccessible.

The counties that span the Health Wagon’s service area — Lee, Wise, Scott, Dickenson, Buchanan and Russell — are some of the least healthy in the state, according to data from County Health Rankings and Roadmaps, a national organization that aggregates health data annually in an effort to shed light on health disparities across the country.

High levels of heart disease, obesity and adult diabetes also plague the region and access to exercise and healthy foods is lacking, according to County Health Rankings and Roadmaps.

An epidemic of black lung disease caused by the inhalation of coal mine dust also affects one in five veteran coal miners in the region, according to Appalachian Voices, a grassroots advocacy organization.

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