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  1. czander
    November 6, 2009 @ 12:42 pm

    According to the Daily Planet (2007), several organizations demonstrated outside the annual shareholders meeting of United Health Group the largest HMO in the U.S. to “decry the gap between need and greed.” United Health Group CEO William McGuire, and his replacement Stephen Helmsley, as well as other Minnesota HMO executives, took billions in stock options. McGuire was the highest-paid CEO in Minnesota history, with stock options totaling $2 billion. Helmsley, who replaced McGuire, has stock options in excess of $750 million. In 2009 Helmsley’s compensation came to $57,000 an hour. McGuire and other executives who were ousted in October, 2006, are under criminal investigation due to stock option backdating fraud. According to Herbert Sacks past President of the American Psychiatric Association, when asked where does this money come from, he replied “from the denial and interruption of…patient care.”
    Not only are CEO salaries excessive but so are their Senior VPs’, VPs’, and board members. For example, in 2007, the top 6 health plan boards paid themselves a whopping $277,998,793 (Jodell, 2009).
    Estimates of the compensation cost for health care CEO’s and their executives total about $7 to 10 billion a year. If their pay was reduced by 80 percent it would cover health insurance for 500,000 families enrolled in a government insurance program at $10,000 per year per family. Also, if health care was nationalized the administrative savings alone would be enough to provide health care coverage for the one million uninsured in America. One third of every dollar spent on health care goes to administrative overhead and half of that goes to executives. According to the Security and Exchange Commission between 2000 and 2007 the 10 largest publicly traded health insurance corporations increased their profits 428 percent from $2.8 billion to $12.9 billion, as premiums increased 87 percent.
    Health care institutions have lost the confidence of a public that once valued their altruistic mission and many maintain that executive pay is a significant part of the health care problem in America. For example, Patrick Soon-Shiong the CEO of APP Pharmaceuticals stepped down as CEO in the spring of 2008, but the former surgeon still held 83 percent of the company’s shares. In July, he agreed to sell APP to a German firm. The sale finalized two months later for an initial $3.7 billion cash payment, as a result Soon-Shiong’s personal fortune gain $3 billion in 2008, (Brunwasser, 2008).

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  2. Where is our health care reform? « Public Citizen
    November 17, 2009 @ 2:20 pm

    […] is right. The people wanted health care reform. What we’re being told to settle for is just another scheme to line the pockets of the […]

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