Our current health care system in the United States works just fine — for the corporate executives who run it.
Take, for instance, Michael Mussallem, the CEO at Edwards Lifesciences — a California-based company that makes heart valves and assorted other medical devices. Since 2010, Mussallem has pocketed an astounding $246 million in compensation.
Actually, astounding might not be the right word here. In the health care industry, colossally large paychecks for top executives have become standard operating procedure. In fact, four health industry CEOs have made more than Mussallem since 2010.
One made much more. John Martin, the former top executive of the pharmaceutical giant Gilead Sciences, has collected $863 million over the past seven years.
Overall, the CEOs at 70 major American health care companies have grabbed a combined $9.8 billion since 2010. That comes to an average annual take-home of $20 million per executive.
All these numbers come from researchers at Axios, an online news media outlet. Two top corporate watchdogs — University of Massachusetts-Lowell economist William Lazonick and Matthew Hopkins of the Academic-Industry Research Network — have confirmed the Axios pay figures.
The health care industry is doing its best to ignore and dismiss these findings. The national outlay for health care last year hit $3.35 trillion. Next to those trillions, the industry reasons, the mere billions that go to health care executives amount to no more than a tiny drip from an IV.
But this glib defense of executive excess in health care totally ignores the real danger in the big bucks cascading into corporate CEO pockets. Outrageous pay gives CEOs an incentive to behave outrageously — at the expense of our health.
How so?
The vast bulk of corporate executive pay today comes in the form of stock awards. The higher a company’s share price, the heftier the CEO’s compensation. This stock connection encourages CEOs to single-mindedly focus on raising their company share prices by any means necessary.
Among those means: Pharmaceutical CEOs will jack up prices on prescription drugs and do whatever they can to get doctors to prescribe more pills. Health providers will push unnecessary tests and procedures. Hospital chiefs will downsize support staffs for patients.
All these decisions fatten corporate bottom lines, pump up corporate share prices, and leave our health care poorer.
How could health care get better? Blue-ribbon commissions have all sorts of suggestions. They urge us to eliminate unnecessary procedures, tests, and devices. We need to better coordinate care and lower prices.
Corporate CEOs in the health industry have no incentive to take any of these steps. They want to keep the health care industry a “free market” wild west where the biggest corporate players get to keep whatever they can grab.
We need to break that power.
And that brings us to the good news: Prospects for real change in health care are rapidly moving onto America’s political center stage. We now have 17 US senators on the record supporting an overhaul of the US health care system — introduced by Vermont senator Bernie Sanders — that places people first, not CEO paychecks.
This “single payer” Medicare for all overhaul would both guarantee every American access to health care and give the American public bargaining power against the corporate health care industry.
Just a few short years ago, this industry had both our major political parties too cowed to even discuss a move to Medicare for all.
That discussion has now begun.
Sam Pizzigati, an Institute for Policy Studies associate fellow, edits TooMuchOnline.org, an online weekly newsletter on excess and inequality, and he co-edits Inequality.org. His latest book is The Rich Don’t Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class, 1900-1970. Email editor@toomuchonline.org. This appeared at OtherWords.org
From The Progressive Populist, November 1, 2017
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