Stock Options

Several blogs (including ProCare and Ed Cone) have commmented today on the Wall Street Journal report about the 1.6 billion dollar "unrealized gains" on United Healthcare CEO Dr. William Mcquire's stock options. Everybody is linking the WSJ article - but you can't read it without a subscription. Nobody has ever seen anything like it in the history of CEOdom.

Cone's post (part of it is in quotes, so I am going to assume it's from the WSJ article) spoke of "companies getting rich from the nation's fraying healthcare system" and bemoaned the fact that these CEO's "aren't discovering drugs or treating patitents . . . they are "middlemen who process the paperwork, fill the pill bottles, and otherwise connect the pieces of a two trillion dollar industry".

Well DUH!!! But what is anybody doing about it? Greed starts at home. It starts with the little operations and moves its way up. I began questioning "non-profit" executive pay & incentives at Randolph Hospital several years ago - as soon as I finally got my hands on IRS documents and saw the salaries these guys were paying themselves even as they made my life a living hell. Small-town hospital executive salaries that doubled and tripled in the same time period that local income averages dropped make no sense. Somebody had a rubber stamp, and baby it was SMOKIN!

The Greensboro News & Record published a story late last summer on the monster salaries enjoyed by "non-profit" (mostly healthcare) executives/physicians in the area. The numbers were astonishing. The argument is that these salaries are necessary to keep high-quality executives from leaving for the "for-profit" sector. But I just don't buy it. Shouldn't we be able to tell the difference between the sectors - since one is supposedly about charity and public service?

Widespread abuse of the "Disproportionate Share" program bled the Medicaid coffers in North Carolina dry - some reports say to the tune of nearly a billion dollars. I wonder how much of that money (which was supposed to reimburse hosptials for care provided to the uninsured) went to pay for executive bonuses and incentives? That case was supposedly referred to the Feds for investigation, but nothing has been prosecuted - the whole thing has fallen off the radar. Most folks in-the-know account the drop-off to politics (of the dirty variety) . . . because there is little doubt the taxpayer got fleeced. But nobody is going to jail. So much for ethics reform in Raleigh.

"Non-profit" Blue Cross Blue Shield of North Carolina (a virtual monopoly in this state) boasts muti-million dollar profits, but still sticks it to "the customer" with regular rate increases - that is, if you can navigate the "pre-existing condition" maze to get coverage at all. That stunt the company pulled last year with Baptist Hospital . . . refusing to cover procedures there in an attempt to strongarm a better deal . . . putting patients (including this one) in the middle . . . was despicable. And then there's the little matter of free speech and ProCare and who is paying those lawyers and how much. A friend of mine (about to lose her insurance) just got a quote from Blue Cross for $1700 a month - an outrageous figure given the state of her health. Meanwhile Bob Greczyn takes the jet.

The middlemen rule. We just have not been paying attention. I've wondered for a while what it would take to get anyone's attention.

Apparently, 1.6 billion dollar stock options are a start.