CEO Compensation: Who Said Health Care is in a Financial Crisis?
Those of you who are struggling to pay for your generic medicines or wondering why the doctor is charging you a $5.00 co-pay, give some thought to these facts about how our health care dollars are allocated. At the end of this post, there is a list of 23 health companies I found on Forbes.com, what the CEO was paid in 2005, and the average paid to the CEO in the past five years.
Imagine adding vice presidents, Board of Directors, stock holders and the other 200-300 other companies all cashing in on your health to that total at the bottom.
Based on this, the next time you want to argue with your Primary Care doctor's front desk about a $5.00 co-pay, remember that he makes an average of $149,000.00 per year. On the other hand -- using United Healthcare as an example -- your insurance company paid their CEO -- one man -- $324,000,000 over a recent five year period.
If you are uninsured, try calling any one of these 23 CEOs and see if they will give you free insurance.
BTW: 10% of 14.9 billion is 1.4 billion. If basic insurance costs $8,000/year for a family then taking 10% from just these CEO salaries would insure 35,000 Americans a year for five years. That is a lot of people that can be helped just by 23 men. Looking at the companies as a whole that profit from health care, we can probably pay for every uninsured person in this country for decades to come.
The numbers are numbing, which is why we should do something about this.
TOTAL 2005: 559.8 mil
TOTAL 5-Year: 14.9 billion
Related Topics: Technorati Tags: health care, health care reform, CEO compensation, health insurance
The opinions expressed in the WebMD Blogs are of the author and the author alone. WebMD does not endorse any specific product, service, treatment or political point of view.
Imagine adding vice presidents, Board of Directors, stock holders and the other 200-300 other companies all cashing in on your health to that total at the bottom.
Based on this, the next time you want to argue with your Primary Care doctor's front desk about a $5.00 co-pay, remember that he makes an average of $149,000.00 per year. On the other hand -- using United Healthcare as an example -- your insurance company paid their CEO -- one man -- $324,000,000 over a recent five year period.
If you are uninsured, try calling any one of these 23 CEOs and see if they will give you free insurance.
BTW: 10% of 14.9 billion is 1.4 billion. If basic insurance costs $8,000/year for a family then taking 10% from just these CEO salaries would insure 35,000 Americans a year for five years. That is a lot of people that can be helped just by 23 men. Looking at the companies as a whole that profit from health care, we can probably pay for every uninsured person in this country for decades to come.
The numbers are numbing, which is why we should do something about this.
- United Health Group
CEO: William W McGuire
2005: 124.8 mil
5-year: 342 mil - Forest Labs
CEO: Howard Solomon
2005: 92.1 mil
5-year: 295 mil - Caremark Rx
CEO: Edwin M Crawford
2005: 77.9 mil
5-year: 93.6 mil - Abbott Lab
CEO: Miles White
2005: 26.2 mil
5-year: 25.8 mil - Aetna
CEO: John Rowe
2005: 22.1 mil
5-year:57.8 mil - Amgen
CEO: Kevin Sharer
2005:5.7 mil
5-year:59.5 mil - Bectin-Dickinson
CEO: Edwin Ludwig
2005: 10 mil
5-year:18 mil - Boston Scientific
CEO:
2005:38.1 mil
5-year:45 mil - Cardinal Health
CEO: James Tobin
2005:1.1 mil
5-year:33.5 mil - Cigna
CEO: H. Edward Hanway
2005:13.3 mil
5-year:62.8 mil - Genzyme
CEO: Henri Termeer
2005: 19 mil
5-year:60.7 mil - Humana
CEO: Michael McAllister
2005:2.3 mil
5-year:12.9 mil - Johnson & Johnson
CEO: William Weldon
2005:6.1 mil
5-year:19.7 mil - Laboratory Corp America
CEO: Thomas MacMahon
2005:7.9 mil
5-year:41.8 mil - Eli Lilly
CEO: Sidney Taurel
2005:7.2 mil
5-year:37.9 mil - McKesson
CEO: John Hammergen
2005: 13.4 mil
5-year:31.2 mil - Medtronic
CEO: Arthur Collins
2005: 4.7 mil
5-year:39 mil - Merck Raymond Gilmartin
CEO:
2005: 37.8 mil
5-year:49.6 mil - PacifiCare Health
CEO: Howard Phanstiel
2005: 3.4 mil
5-year: 8.5 mil - Pfizer
CEO: Henry McKinnell
2005: 14 mil
5-year: 74 mil - Well Choice
CEO: Michael Stocker
2005: 3.2 mil
5-year: 10.7 mil - WellPoint
CEO: Larry Glasscock
2005: 23 mil
5-year: 46.8 mil - Wyeth
CEO: Robert Essner
2005:6.5 mil
5-year: 28.9 mil
TOTAL 2005: 559.8 mil
TOTAL 5-Year: 14.9 billion
Related Topics: Technorati Tags: health care, health care reform, CEO compensation, health insurance
The opinions expressed in the WebMD Blogs are of the author and the author alone. WebMD does not endorse any specific product, service, treatment or political point of view.
19 Comments:
The problem is that medicine is rooted in capitalism (as is everything else). Without getting into long discussions relating to the that thread topic, universal healthcare plan (such as Canada's) would considerably equate to socialism (on the way to communism - and we all know how that works). The problem with the capitalism based system is high costs/prices, but there are numerous medical advances made every day. When Canadian citizens are stricken with cancer, do you really think they get in line at the local cancer center? If they can afford it, they come to New York to be treated at Sloan-Kettering. Now, I know that many of you reading this who just so happen to have Hillary bumper stickers on your Audi A6, are beginning to tune me out; my argument is not for or against a universal healthcare plan - but simply to make a point that money is the root of all (evil or otherwise). The currents systems is costly for those who are or aren't insured, but the advances in medicine are there. Were the current advanced trends in open heart surgery, total knee replacements, infertility treatments, cancer treatments, bloodless surgery, etc. etc. etc created in Canada? How about China? How about any other socialist country? If the United States went to socialized medicine years ago, several of the advances that are so costly today wouldn't even exist yet, so where is the loss? Sure, I think it is wrong for some nit wit pharmaceutical sales rep with a high school GED to make $200,000/year to wine and dine Doctors to get them to prescribe specific medications. Is is so wrong for pharmaceutical companies to charge for their research? For every new drug created, there have been huge costs put into the research and development of such drugs, not to mention the same costs for those drugs researched that never pan out. Without the capitalism model in which greed is (unfortunately) the driving factor, what is the incentive for the creation of world class drug products? Sure, the CEO's can make a bit less, how can you force that? If you think the drugs cost too much, don't buy them. But you NEED them???? - well then I guess you have to pay the price. If the pharmaceutical companies never created the drug in the first place, you still wouldn't have it - as far as I am concerned, the drugs that they develop and possess are intellectual property for them to market and sell as they see fit. Is is morally right? - than depends. I hope they can sleep at night; if not, they should lower their drug prices to make them more affordable. Otherwise, keep making advances.....
As far as insurance CEO's - they are the ultimate scum - but they are still in business for a reason: People keep buying their product (or lack thereof). We need a few moral based individuals to start insurance companies and do the RIGHT THING. The answer is not FREE HEALTCARE - as nothing is ever ever ever ever ever ever free. The middle class will be taxed to pay for everyone's healthcare. Instead of my paycheck showing xxxxxxx to taxes and xxxx to healthcare, it will read xxxxxxxxxxxxxxxxxxxxxxx to taxes and ____ to healthcare. what is the difference, other than the reduction in medical advances and longer waits at the doctor? Insurance reform is the key. We need a few moral based individuals with $$$ (of course) to start insurance companies that are not profit based. Sure, they should make one million dollars per year, but not 400 million over 5 years. This would initiate some competition (another factor of capitalism) and force the current companies to drastically reduce their costs (and useless baggage staff - further reducing costs) and health insurance would be more affordable.
Many people seem to blame doctors; why don't they charge less? why can't they see me for free? why do I have to pay a copay? WAAAaahhhh!!! People don't realize that doctors invest a great deal of time and money just to be called "doctor". They should have a nice house and drive a BMW 730i, regardless of their patient's social status. They have put a great deal of time and money into their education. What would help is if the government appoint representatives to negotiate pricing for the uninsured as insurance companies do. If a doctor bills $300 for a visit and the insurance company pays $90, that is because of pre-negotiated pricing and contracts. I agree that an uninsured person should not be held to the full $300 when my insurance company would have paid $90 for the same result.
And as fr as copays are concerned, I have no problem with them. They serve a very good purpose: They keep people from going to the doctor needlessly. If there were not any copays, people would go to the doctor for a simple headache. Copays exist to invoke some though as to whether or not it is necessary to go to the doctor.
The above post hits the nail on the head on the issue between the negotiated price a physician accepts and a "retail" fee. There is little in between.
I disagree with the insurance company compensation because they ae generally not regulated as they should be. There are no laws dictating a definition of minimum coverage. In fact, if the law would l=simply state that all insurers and HMO's must give, as a minimum the same package as Medicare which has no restrictions on who you can see and no precertification or clinical carriers that may the the entire solution after all.
Doctor K.
For those who think healthcare is a privilage take a look at these CEO numbers. Whatever privilage it was has been taken away by these ridiculuous salaries. It is like Jon Q. Public is getting the scraps off the table from these companies after they steal as much money as they can from the healthcare system.
I think if there is anyone out there who is having trouble getting healthcare, why don't you write one of these CEO's a letter a see if they will pay the few hundred a year to get you coverage or will they buy yet another jet to fly them to go skiing.
Would I rather have a system that encourages me to be fat and sedentary, and when I need open heart surgery for my clogged arteries, I get the best top notched care while others die outside the emergency room? Or would I like to have a system enables me to take responsibility for living healthy and avoid that surgery?
Now the average Canadian probably goes to the cancer center in Canada. The rich Canadian come to the U.S. Some Americans goes to the average cancer center and some of them get now treatment.
I didn't realize Canada was communist.
Where I live, there is one company that manages power. I need power to run my computer and telvision and to take a hot bath. There are no competing companies for power and so this particular power company has a monopoly. It could charge 10 times as much and I would probably still pay for power because I like to take a hot bath. I wonder why no one protests this situation as a communist way of life. One power company-where's the capitalism in that.
With our overweight, sedentary society and our polluted world, we have created a need for open heart surgery, total knee replacements, infertility treatments, cancer treatments.
If money is the root of all evil, I would rather see everyone with basic health care spending all that money on preventable diseases.
I don't drive an Audi A6. I ride a bicycle.
Also, a good business plan for a pharmaceutical to develop medications that treat diseases instead of cure them. Why get rid of all your customers.
Fried Liver,
I going to take a leap and assume that you didn't like my post.
I will tell you this; I am in excellent physical condition and will never need open heart surgery due to obesity. I will probably need a total knee replacement some time in my life, but again not a result of obesity or pollutants (this would be a result of traumatic injury). All this, and yes, I currently pay a great deal for healthcare coverage for me, my wife, and my children. The system is flawed, but I pay enough for other people through welfare and social security - I don't need to pay more for their health coverage, also (which would result in me still needing supplemental coverage).
I get randomly drug tested as a condition of my employment - think of it a pre-requisite for the honor of paying taxes. Then there are those who sit on their ass and collect off the system which my taxes support; do they get drug tested before they pick up their bi-weekly check? No. (And this is not a rant against welfare - The welfare system is necessary to help people get on their feet or get through unfortunate circumstances - BUT IT IS ABUSED BY MANY). Would recipients of "universal healtcare" be drug tested and denied if their "illness" was a result of illicit drug usage. I would have to say no, and I don't want to hear that it is an illness either....it becomes an illness after a very distinct choice. I grew up with nothing, received no financial aid for college, no free passes, rides, etc. I worked to get where I am and have a serious problem taking from my 2 children to FURTHER support those with 5 or 10 who can't afford it on their own, but scrape up enough for a pack or too of cigarettes every day. I would like to have 4 or 5 children, but a logical and responsible choice was to have 2 children because I am not sure that I can properly provide for additional children they way a responsible parent should. I would like for everyone to have health coverage, but my point is that nothing is free. The concept of a universal healtcare is too often referred to as FREE Healthcare (free for them........because they are not paying for it). I agree that we should focus on prevention rather than waiting to treat an illness, but that doesn't work with alcohol and nicotine abuse; how will it work with healthcare? I learned that cigarettes were bad when I was in the first grade, as did everyone else my age. Yet, many still chose to smoke. As I grew older, I learned that big macs were bad, yet many still chose them as a primary staple to their diet. This prevention that you speak of is taught in school and elsewhere - people make their own choice. We do not need another government funded project paid for by the middle class. Why should I have to pay more for their bad choices? The thought aggravates me just as hearing someone sue Phillip-Morris for their throat cancer (and I am against smoking, by the way). How does one voluntarily breathe smoke into their lungs (after paying to do this) and somehow be surprised when they find out that it was killing them - people die in house fires from smoke....duh! Then it is somehow somebody else's fault. My increased tax dollars should pay for their treatment, too? In addition, what about the esteemed individuals who work, but off the books (i.e. - no work records, no paid taxes, etc.)? They get on the "free healthcare" gray train also? They are obviously able bodied as they do work, but somehow don't contribute because they do not pay their share of taxes. You can't cut them out because it would no longer be FREE, umm, errr, I mean universal. I know of numerous individuals who work "off the books" and thus have extra income (from saving taxes) for their boat and other amenities which myself and most other tax payers do not have. I should pay for their healthcare?
BTW, I never stated Canada was communist......you made that leap. I merely mentioned Canada, China, and "other socialist countries" in the same sentence.
As far as you power situation, that sounds similar to Con-Ed in New York City. I grew up in long Island where there was Lilco, which was a similar monopoly. The isue was that they were awarded the monopoly for installing the power lines, etc. throughout the entire area (which I would assume would be rather costly). If they never did this, there would be no electricity to pay a high cost for in the first place. If the high cost is a problem, move to an area where you can chose your electric supplier.
My issue with the current healthcare system is that insurance companies provide NOTHING. The get paid a great deal of money to do nothing but cash their checks and negotiate prices. They provide no real product or service - they merely pay out claims when they have to. It is wrong for the executive to make as much as they do when there is no true service.
I almost forgot about your pharmaceutical comment. As far as treating versus curing, you are absolutely correct. Maybe the government could also come up with a better plan. Here is an idea: Once a drug is created (after millions of dollars have been invested), the government should immediately make it generically available so there is no profit for the creator of that drug. That should motivate pharmaceutical companies to create some rather useful products.
Maybe instead we should stop spending so much money trying to figure out if water was present on Mars 89786363839056390 billion years ago and use that money to create of few useful drugs that would be competition for the existing companies to reasonable price their products. The government should also have it's own health insurance fund (similar to worker's compensation) in which individual can pay for coverage at a cheaper rate than the other companies listed by Dr. K. That would also force some competition.
can anyone tell me what the name of pills that don't have a name or number on it. the pills are red in color and are the shape of M&M's.
To anonymous at 10:53 PM:
That sounds like a question for a pharmacist to answer after looking at it, but you're welcome to try browsing our Drug Database to see if you can find the information there.
"But John R. Seffrin, the chief executive of the cancer society, which is based here, said his organization had concluded that advances in prevention and research would have little lasting impact if Americans could not afford cancer screening and treatment."
Although there are individuals that need expensive treatment even though they live a healthy lifestyle doesn't negate the fact that an unhealthy lifestyle contributes to millions of wasted health care dollars. Maybe we could get this obesity thing under control and give all the money saved to the CEOs of the insurance companies.
"Why should I have to pay more for their bad choices?"
Obviously not a person of compassion. It's so easy to demonize someone who needs help so you don't have to help them. When I crash my bike, will you leave me on the side of the road for my "bad choice". Maybe we should deny health coverage for those who have accidents. No knee replacement for you. And lets go further, let blame all illness and injury on inferior genetic material and a weak soul. Why should I pay? I am a superior human speciman with strong moral values.
To the initial anonymous poster on this subject:
Thank you for your post. I hold the same position on insurance reform and you stated it better than I ever could have.
The issue of CEO compensation is not a debate between capitalism and socialism. It is a comment on extreme greed of corporations that market insurance products and medicines we probably don't need and pay-off (read as "lobby") Congress to keep them bassically unregulated.
The pharmaceuticals and insurance companies have a free ride at the expense of the consumer. The compensation profiles are outragously greedy BECAUSE these companies deny care and produce many inferior drug products.
Doctor K.
US medical research isn't completely capitalistic anymore than growing corn is. The National Institutes of Health are funded through the US budget (meaning by US taxpayers0. Besides, aren't pharmaceutical companies allowed large research & development writeoffs, probably for inflated figures? Hope to see more on these topics. Meanwhile, thanks to the author for putting us on alert to the shocking, disproportionate figures for CEO compensation.
gbtlwamI've worked in healthcare both as hands on and in billing and receivables. I am well aware of the strange goings on between Healthcare Provider Companies (not doctors) and the various insurances that pay the bills. Bill a service at $100.00, insurance says I'll pay $50.00 and you can bill the patient for $30.00. Now, if you are a patient without insurance do you think there is any savings for you? Maybe, but it will depend on the doctor and the company he works for. Some places do offer a nice discount for upfront payments. Basically, there is no problem with healthcare; only the fact that the majority of it is now run as big (really big) business. I've heard of more than one doctor who has had to declare bankruptcy or decide to just leave healthcare completely. Strange things happened to me when I turned 65; I signed up for an advantage plan with Part D coverage. The first time I went to get my blood pressure pill, it was $13.00 more than what I had been paying when I was self pay and eligible for the pharmecutical discount from the pill maker. I also needed ostomy supplies (have used them for over 24 years) and could not find a DME on the vendor list that handled them. Since this is not something you can wait on, I made out of pocket purchases until I finally found out how to get my supplies through a mail order company and now the insurance company is balking at reimbursing me but I am planning on being a very squeaky wheel because they did not even contract with this company until months after I had made my first purchase and the customer service never advised me for even longer.
I believe that it was in one of the "Non Sequitur" cartoons that a disgusting blob on the floor was identified as "...just a bloated CEO."
That pretty well describes America's CEO's: bloated.
This is hysterical. Blaming health care cost on 23 individuals; spoken like true socialist. Pull your head out and look around at the world. The US is the most SUCCESSFUL country in the world when it comes to standard of living. Go ask citizens in Canada, Cuba, Sweden, etc... which system they would prefer; the majority will select the United States. This article is a joke - do some serious research next time before spouting your uneducated thoughts across the blogosphere.
A universal health care system such as Canada's will lead to socialism and then to communism? What moronic nonsense! So the President, the VP, all members of the cabinet in Washington D.C., all members of Congress, the top judiciary, and all other top federal and local government officials and their families, as well as the entire military, are all "socialists" and "communists" because they get free health care? How about all these exorbitantly-paid CEOs who have their health insurance paid by their corporations? Citizens of Canada and Sweden, where there is free and universal health care, prefer U.S. treatment? Ha! Says who? Not according to public opinion polls, in which Canadians say they would not change their health care system for any other in the entire world. And how about the 50 million Americans who have no health insurance? Do they prefer our health care system to Canada's? What good are your "advances in medicine" to them? The U.S. has the "highest living standards in the world"? Says who? Not according to the IMF, the World Bank, and the OECD. Using currency exchange rates for their calculations, these U.S.-dominated institutions do not rate us even among the world's top 10. And the U.N., using purchasing power parity (PPP) instead, does not rate us even among the world's top 20. Also according to U.N. data, the U.S. was ranked 17th in the world in life expectancy (expected life span) in 2006--behind not just Canada and Sweden, but behind even Cuba. True, the U.S. is still number 1 in health-care per-capita expenditures, but we all know where most of that money goes--into the deep pockets of the 40,000+ private health-insurance corporations, especially their CEOs and other top administrators, doctors, nurses and other health providers. "Medicine is rooted in capitalism (as is everything else)"? What baloney! Are national security and defense, police protection, fire departments, primary and secondary education, etc. also "rooted in capitalism"? Why should public health be rooted in an economic system based on greed and private profit? Just watch Michael Moore's movie "Sicko". You might finally learn something
I always find it humorous how bringing out facts lead some people to one conclusion and others to another.
In answer to the pseudo-patriot who seemed to think that this blog-post blamed all of healthcare on CEO compensation of insurance and pharma execs then please take your head out of the sand. The post simply states a simple fact: companies that deny healthcare claims on a regular basis such as United Healthcare, continue to reimburse their executive out of proportion to any known formula except perception on Wall Street.
This country is great NOT because we are wealthy annd NOT because we have capitalism but because we always question those in authority and call our representative to task to correct a wrong. A high standard of living does not give Congress or Wall Street unresatricted license to act. The free market is free because of the freedom of intellectual ideas.
The healthcare debate is healthier for this country than any healthcare solution. The fact that the country as a whole has a high standard of living has no meaning for a large percentage living under the poverty line.
For profit insurance plans are copunterproductive to healthcare. For profit pharmaceuticals are not. Insurance companies produce no product. There is no reason why the insurance companies need to even be in business. If they went away, no product of substance would be lost. It is not socialism to have a two-tiered medical system of basic insurance supplied by the government on a sliding scale of payment and opting out for private plans.
Dr. K.
And they say drug costs are high because it is costly to develop drugs but it appears they are high because the money made on drugs goes into the CEO's pockets. Plus,
most of these CEO's probably don't know how to develop drugs.
The same is true with insurance companies. It would make you believe that it is better to line the pockets of one person then to save a life.
Most likely, an individual who was self-employed and carried out business as the big businesses do in health care would be in prison for conducting business the way they do.
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