J. TODD FOSTER: Our Health Care Problem An Insurance And Greed Problem
I went to the doctor the other day, and he handed me an article he had printed from the online site WebMD. America does not have a health care problem, he told me, but an insurance company problem.
The article, written two years ago by Dr. Ira Kirshenbaum, reveals the 2005 compensation of chief executive officers of 23 health care companies.
I doubled-checked his figures from Forbes.com, and Kirshenbaum made a couple of errors, including one whopper. He wrote that these 23 CEOs made $14.9 billion over five years. The actual number is a shade more than $1.4 billion. He added an extra zero.
How much insurance coverage would $1.4 billion buy though? With insurance at an average cost of $8,000 per family per year, the salaries of these 23 CEOs could fully cover about 36,000 families for five years and nearly 180,000 families for a full year.
Keep in mind that the average doctor earned $149,000 in 2005. Those 23 CEOs earned an average of $24 million in 2005, or a combined $560 million in one year.
Topping the list was Dr. William W. McGuire, CEO of the Minneapolis-based UnitedHealth Group. His pay for that year was $125 million and $342 million over a five-year period.
McGuire resigned in disgrace in 2006 over a stock options back-dating scandal that resulted in a record fine of $468 million by the Securities and Exchange Commission. It also was the first fine of an individual under the “clawback” provision of the Sarbanes-Oxley Act, which was enacted following the Enron scandal. The clawback provision aims “to deprive corporate executives of their stock sale profits and bonuses earned while their companies were misleading investors,” the SEC wrote in a Dec. 6, 2007, press release.
“The Commission’s complaint alleges that during a 12-year period, McGuire repeatedly caused the company to grant undisclosed, in-the-money stock options to himself and other UnitedHealth officers and employees without recording in the company’s books and disclosing to shareholders material amounts of compensation expenses as required by applicable accounting rules.”
Said SEC Chairman Christopher Cox at the time: “Whenever a corporate officer misleads investors about a company’s performance by secretly backdating stock options, the integrity of our markets is undermined.”
Added Linda Chatman Thomsen, director of the SEC’s Enforcement Division, “The $468 million settlement in this case, including the largest penalty [$7 million] assessed against an individual in an options backdating case, reflects the magnitude and scope of Dr. McGuire’s misconduct.”
McGuire reportedly received a $1.1 billion severance deal – said to be the largest golden parachute in corporate American history – after his ouster. He didn’t deserve a dime. Instead of his big payday, he should have been forced to trade in his designer suits for a jailhouse orange jumpsuit and matching flip-flops.
A man became a billionaire for doing a job whose performance was measured by how much profit he could glean by having his minions deny as many medical claims as possible.
Then there’s Cigna CEO H. Edward Hanway, who earned $13.3 million in 2005 and $62.8 million over five years.
Cigna is my insurance company. In 2004, when my second son was born with a jaundice condition that required another day in the hospital, Cigna refused and forced us to take him home. In order for him to qualify for an extra hospital day, he would have needed to be sicker. But if his condition worsened, it could have been life-threatening.
I watched my pediatrician yell in the telephone for more than an hour at a Cigna gatekeeper whose only goal was to save a buck, but who ultimately agreed to have a medical device called a bilirubin blanket transported from Charlottesville, Va., across the mountain to Waynesboro. The transportation costs and the blanket probably wiped out the savings derived by denying the extra hospital day.
My doctor is right. Our national health care crisis is rooted in the boardrooms of insurance carriers and other health care companies whose greed is putting Americans at financial and medical risk every day.
J. Todd Foster is managing editor of the Bristol Herald Courier and can be reached at or (276) 645-2513.
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Reader Reactions
Just forget about everyone who does not have health insurance. That is the good Capitalist way.
They have no money or there is no profit to be had from these Americans so forget them as unimportant they have no value. Eventually they will all just die.
After all if they were good Americans they would be rich not need any help of any kind ever. All good Americans are rich with plenty of money in the bank.
FoxSux——Meow When someone really cares about an issue,they try to discuss options rationally. When they just want to create distention, they make remarks that have absolutely nothing to do with the issue. Get my meaning???
kdr1, Thanks for proving I knew what I suspected about you by not answering the questions I ask.
As to address your last statement from your last paragraph. If our health care industry was taking care of the vast majority of Americans, as you said it is, then there would be no need for reform, right.
The “disease” is here and the side effects from that “disease” has caused great burdens on Americans. It’s to late to but a BandAid on a cancer that has gone untreated for years, it’s slowly killing us and many like yourself are in denial.
I’ll close this blog tonight because it is a waste of time. I stated “my opinions” and thoughts, not to change somebody else’s opinion but to show a different view to consider. I’ll suggest this to all that read this, believe what you wish but follow up on what some write by looking at web sites like factcheck.com and weed through the lies and deceptions.
Good luck to all and look forward to reading your thought on other topics in the future.
Bye for now!
Next?
Everyone please take note:
abdgranny is the new forum moderator.
This article is about ‘Health Care PROBLEMS’—kdr1 and captainkona, if you have problems between yourselves, take it somewhere else—if you have any kind of input for this article—please share it. You are both beginning to sound like 2 old dogs fighting over the same bone.
Next wrote “Here’s what I think, just my opinion. You, and many other’s like you, have a world of questions and misinformed information from questionable sources that has caused fear in the general public about any type of health care reform program”
Well i get my information from different source and quote from different sources. I get my information from the most credible sources i can. I dont get my info from Daily Kos, Rush Limbaugh, Keith Olberman. If you havent noticed most info i post or quote from are news agencies other than fox, msn,or cnn. Both of those whether anyone wants to admit it are supplying info to a specific audience, fox gives it to conservatives and cnn, msnbc, and others give it to liberals. Their both biased in their own way.
And as for trying to paint me as as someone who is “i got mine to bad for you”; your wrong. I certainly do not believe the dem plan has included all ideas. They are being driven by ideological motives, nothing more. The question i have is why would you “remake the healthcare industry from “top to bottom” when it is taking care of the needs of the vast majority of Americans, why not concentrate on the minority who do not have insurance or people who are in between insurance. In my mind its like giving a medication where the side-effects would be worse than the disease.
PS: That meant, NO that doesn’t sound like government control to me. It sounds like, since you can’t get your act together and become more responsible and affordable so everybody can participate we will set guidelines that will force you to be competitive and offer a fair, resonable rate so everybody can afford medical health care insurance coverage.
Of course that’s how I read what was in the proposals so far. You on the other hand read that differently, that is if you read one of those proposals at all.
kdr1,
I also wrote this (Oct. 19th., 11:42am), “where did you read where I said I “need the government to take care of me”. But I also wrote this, “Why do you choose not to have a health insurance plan yourself?? When you go to a doctor where do you go?? and Who pays for your medical bills?? Do you pay out of pocket??“. Now since you preceive yourself as to have all the answers where did you answer those questions?
Here’s what I think, just my opinion. You, and many other’s like you, have a world of questions and misinformed information from questionable sources that has caused fear in the general public about any type of health care reform program. You sidestep questions ask of you by answering with your own question. You do not have a solution to address the issue or topic all you have are quotes from somebody else. You are happy where you yourself are and could care less about others. As long as you get what you want you do not care who has to suffer. You only focus on what goes on in your own little world and are blinded to the turmoil and destruction of the lives of those less fortunate than yourself. The livelyhood of others are unimportant to you yet you may attend Church on Sundays and call yourself a Christian. How many of those things that I just wrote applies to you, how far off base was I.
When you can answer all the questions with a direct answer then by all means reply but if you can’t then several of the things I just wrote has to be true.
Now! I’ll answer you question. First let me say this FYI I have read the proposals more than one time, they keep changing you know. The answer: There are references in some of those proposals that could be viewed by some as government control but they can also be viewed as being regulated by setting guidelines for the health care industry to govern itself by. Remember this, deregulating the health care industry (insurance companies, health care facilities, prescription drug companies and malpratice lawsuits) are what caused this mess in the first place. There is a fine line between “control” and “guidelines or regulate”.
The health care industry, and I’m refering to all related to health care, went unchecked for too long that the cost of health care skyrocketed beyond the reaches of millions of people. Now many elderly and low to middle income working class people have to do without necessities (grocerys, clothing, heat ect. ect.) to buy medicine and put off seeing a doctor, unless it’s to an emergency room at a hospital.
That kdr1 is in my opinion what is wrong with this whole mess and why something has to be done. There are several things that I’m not particulary satified with in any of the proposals I’ve read thus far. But you can bet you behind on one thing I do know and that is that things can not continue in the manner in which has for the last 25 years.
Next?
Now i thought the dems were not going to cut medicare payments?
The Inevitable Medicare Cuts
by Michael D. Tanner
“On top of that, the Senate Finance
Committee assumes that there will be a 21 percent across-the-board reduction in what Medicare pays providers. This cut is scheduled under current law and is not technically part of the health care bill, but most observers had expected Congress to defer those cuts, as they have every year since 2001.“
next,
I dont know what you dont understand about a top to bottom remake of the healthcare system by the government? That doesnt sound like government control to you?
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