I see, and hear, people complaining about the cost of health care going through the roof.
While I believe in the concept of capitalism, I do not subscribe to corporate greed.
At some point, 50 years ago, hospitals, insurance carriers and pharmacies were ‘service’ industries – meaning they put their services above their profits.
I truly don’t believe hospitals were created as a ‘money-making’ proposition. I hope you don’t either. With that said, where do we look for the answer to rising medical and health insurance costs?
I would like to present just a portion of a picture that may give us some clues to that question.
Caution, some of these figures are dated, but the trend to this point has been on an upward track for two or three decades now.
First point: Companies like Cigna, UnitedHealth and Humana have reported annual earnings in the billions.
Beginning in 2011, and continuing to 2019, report after report has found that the three aforementioned companies have profited from $22 billion to $101 billion and everywhere in between.
Not many were paying attention to those numbers. I don’t remember reading or editing those stories at any time in the last decade.
As I said, I’m not against a company making an honest day’s profit for an honest day’s worth of service.
Case in point, is a Tylenol tablet worth any more in the hospital than it is on the street? Does it work faster? So why charge a couple of bucks for one tablet that can be had at the pharmacy for 25 tablets? It may be the tip of the iceberg as an example, but I only have so much space.
Let’s move to the corporate types – CEOs.
I understand that someone has to guide the business. Those stockholders expect a decent return on their investments, but at what point does a company cross a line from a decent return to obscene profits?
Most of the industry’s CEOs command a base salary of less than $1 million, and some of them are half that amount. It is the excesses that I take exceptions to.
Aetna’s CEO Mark Bertolini made a base salary of $996,169 in 2014. His entire compensation for that year was $15 million. And that was half of what he made in 2013, which was over $30 million. I guess 2014 was a bad year.
Where are they raking in the cash?
They receive non-equity incentives, stock options in the millions and other minor business considerations, just to name a few.
Cigna’s CEO David Cordani received $14.5 million in the same period; Anthem’s Joseph Swedish hauled in $13.5 million, and Stephen Helmsley of UnitedHealth almost caught Bertolini at $14.9 million. The base salaries of these individuals were all below that of Bertolini.
Now, ask yourself that question again: “Why are health services and insurance so expensive?”
I’m thinking that it’s the mid-level managers and worker bees who are putting in the work and the hours at the different hospitals and offices around the country. They are driving someone’s plan for all of this.
I certainly hope those same people are getting some kind of profit-sharing plan.
I’m going to toss this out here and see what happens.
Can’t that ‘service industry’ cut that billion-dollar profit margin by some ‘sane’ percentage and accomplish a better level of service; at a more cost-effective, consumer-friendly price?
I am disconnected from this philosophy that someone who makes that kind of money each year somehow needs to make more; and at the expense of someone’s health in the process.
I apply the same logic to entertainers and sports figures, but that’s another column.
What does one do with ‘THAT’ kind of money?
If someone would apply that same thinking to the Veteran’s Hospital system around the country, they would be receiving the care they require; there would be no waiting lists; some of them wouldn’t be dying waiting for the care they need, and there wouldn’t be a large portion of the homeless, living on the streets. (I digress, this is another column, too.)
The largest health care companies (circa 2014) are going to or have already jumped ship in the ACA marketplace saying they are losing money.
Remember, these companies made anywhere from $22 billion to $101 billion in the industry and they are complaining that they are not making enough money.
I’m going to close with this. This situation brings to mind the scripture saying about a camel and the eye of a needle. I’m sure you know what I’m alluding to in the situation.
We need more human compassion for everyone in America. There has to be a starting point.
That’s all I have Henderson. See ya in the funny papers.
Editor’s Note: Since penning the original column, the money numbers have waffled just a little bit, but not to the point of redoing those numbers here. They are still in the ridiculous range.
Kent Mahoney is the managing editor of The Henderson News. His e-mail address is email@example.com. © 2019, Henderson Newspapers Inc.