Our Health Care System (This Should Make You Mad)
I have a solution that may help us start to fix the health care system. I received my copy of Modern Healthcare in the mail today. It happens to be the "compensation issue" where the magazine reveals the compensation leaders in the industry. According to the magazine their report on corporate CEO pay "looks at the 10 largest companies by net revenue in three sectors--hospitals, insurers and specialty care providers--that file periodic reports with the U.S. Securities and Exchange Commission and therefore disclose executive compensation annually." The figures are for the most recent fiscal year.
The top three executives in the Acute-Care Hospital category collectively earn over $73,000,000 in compensation, which includes stock options along with regular compensation. The highest paid executive in this group is Richard Bracken of HCA who earns $41,338,468. The top three executives in the Insurer category earn a collective $83,550,568, with Stephen Hemsley of UnitedHealth Group leading the way with compensation of $49,856,029. Lastly, the top three executives in the Specialty Provider group earn only about $26,591,651. Kent Thiry of DaVita leads this group in compensation, earning about $15,650,217 annually.
If my math is correct these nine health care executives earn about $183,000,000 annually. Keep in mind these executives and the companies they work for are essentially paid by anyone that has health care coverage, anyone that pays privately for health care and of course by the federal and state governments through systems such as Medicare and Medicaid. If you put these salaries in perspective you will probably come to the conclusion, as I do, that these salaries and stock options are absolutely ludicrous when you consider how many people in the United States cannot afford health insurance and cannot afford to go to a health care provider.
According to the Kaiser Family Foundation the average cost of a single health care insurance premium in 2010 was $421.00 monthly and $5,049 annually. If these top nine executives would simply cut their compensation in half the savings would be about $91,500,000 to the "health care system." These savings theoretically would provide health care coverage to over 18,000 Americans who don't have coverage. This doesn't solve the problem but to the detriment of nine individuals 18,000 Americans could have a much higher quality of life. But of course this means that Mr. Hemsley would have to struggle to survive on only about $25,000,000 per year.
