Knopf: Republicans are working on the wrong side of the equation (column)
March 29, 2017
According to Becker’s Hospital Review (May 27, 2016)
Top 20 highest paid Healthcare CEOs in 2015 (Public Pharmaceutical and Insurance Providers)
1. Leonard S. Schleifer, Regeneron Pharmaceuticals (Tarrytown, N.Y.) —$47.46 million
2. Jeffrey M. Leiden, Vertex Pharmaceuticals (Boston) — $28.09 million
3. Larry J. Merlo, CVS Health (Woonsocket, R.I.) — $22.86 million
4. Robert J. Hugin, Celgene (Summit, N.J.) — $22.47 million
5. Alex Gorsky, Johnson & Johnson (New Brunswick, N.J.) — $21.13 million
6. Michael F. Neidorff, Centene (St. Louis) — $20.76 million
7. Alan B. Miller, Universal Health Services (King of Prussia, Pa.) — $20.43 million
8. Kenneth C. Frazier, Merck & Co. (Kenilworth, N.J.) — $19.89 million
9. Miles D. White, Abbott Laboratories (Chicago) — $19.41 million
10. John C. Martin, Gilead Sciences (Foster City, Calif.) — $18.76
11. Richard A. Gonzalez, AbbVie (North Chicago, Ill.) — $18.53 million
12. Heather Bresch, Mylan (Canonsburg, Pa.) — $18.16 million
13. David M. Cordani, Cigna (Bloomfield, Conn.) — $17.31 million
14. Mark T. Bertolini, Aetna (Hartford, Conn.) — $17.26
15. George A. Scangos, Biogen (Cambridge, Mass.) — $16.87 million
16. Robert L. Parkinson, Baxter International (Deerfield, Ill.) — $16.65 million
17. John C. Lechleiter, Eli Lilly & Co. (Indianapolis) — $16.56 million
18. Marc N. Casper, Thermo Fisher Scientific (Waltham, Mass.) — $16.31 million
19. Robert A. Bradway, Amgen (Thousand Oaks, Calif.) — $16.09 million
20. George Paz, Express Scripts Holding (St. Louis) — $14.84 million
The Republicans in the House of Representatives and the Trump administration have taken the "Trumpcare" or "Ryancare" health care plan off the table, for now. It's important to understand beyond all the rhetoric, Republicans are talking about only one side of the equation. They want to reduce the cost of health care by reducing benefits or eliminating Medicaid. Now that their plan has died, we just need to follow the money to see what's really driving up the cost of our current health care system. Nobody in Congress is addressing the big elephant in the middle of the room. Nothing is being said about corporate greed.
We've all seen the stories about the EpiPen being ridiculously priced and Mylan CEO Heather Bresch getting slammed after public outrage. She took an inexpensive drug, epinephrine, and priced it as high as $600. Epinephrine saves children's lives when they go into allergic anaphylactic shock. Then there's Martin Shkreli, the CEO of Turing Pharmaceuticals, who raised the price of the anti-infective drug Daraprim from $13 to $750. A guy who told Bloomberg News back in December he has no regrets because the main mission of his company was "to raise the price and have it generate increased revenue — that's happened, so I'm happy with respect to that."
So let's get real here. Congress and the president of the United States need to take a hard look at the corporate greed associated with the health care industry, the true driver of skyrocketing health care costs. This is the huge elephant in the room. It would be wonderful for Mr. Trump to use his negotiating skills to have a summit in the White House with the CEOs of the pharmaceutical and health insurance industries to bring down the cost of health care instead of reducing the coverage. In case you don't know the scope of the problem, all you have to do is look at the annual salaries the CEOs are pulling in.
In 2015, Cigna Insurance CEO David Cordani made $17.3 million with base salary and incentives. So did Aetna CEO Mark Bertolini. Seventeen million dollars was the entire fund expenditures budget for the town of Frisco last year. Regeneron Pharmaceuticals CEO Leonard Schleifer made over $46 million. And Vertex Pharmaceuticals CEO Jeffrey Leiden made over $28 million. If you've ever wondered why our drug and insurance premium prices keep going up and up, are you getting the picture?
These people would rather cut benefits and increase premiums or prescription prices, than look in the mirror. What if these pillars of corporate America took a 75 percent pay cut for the good of the country? Hey, they'd still be doing okay for themselves. Cordani and Bertolini would make $4.25 million… Schleifer would pull down $11.5 million… and Leiden would take home $7 million. I can tell you, these guys would not have to revert to buying mac 'n' cheese for their families to survive. Now they are just the two top money earners from both the publicly traded pharmaceutical and insurance provider industries. What if all of the CEOs in those industries, public and private, took a 75 percent pay cut? Do you think the ripple effects of that move might have an impact on what we pay every month for health insurance, or our bill at the pharmacy? You bet it would.
Then there is the hospital industry. Tenet Healthcare CEO Trevor Fetter earned between $13 and $18 million in 2015, depending on which source you look at. Tenet operates 87 general acute care hospitals, 20 short-stay surgical hospitals and more than 440 outpatient centers in the United States. Wayne Smith, CEO of Community Health Systems, which operates 158 acute care hospitals in 22 states, earned more than $9 million in 2015. Let them take a 75 percent pay cut and Fetter would still make $3.75 million and Smith would make $2.25 million. Still plenty to live a wonderful lifestyle. Also, it's interesting to note, in 2015, the median worker salary at Tenet Healthcare was $69,714. So Mr. Fetter is making 258 times the median employee at his company. More on that issue in another column.
But is a 75 percent pay cut likely to happen? At this point and in our current environment, absolutely not. So what will it take? All of us are going to have to raise our voices and demand change from our elected officials. Clearly, the Republicans are not thinking about the majority of Americans. The latest health care proposal that died before reaching the House allowed for a significant tax cut for the very wealthiest Americans. For us to get the kind of health care we need, we're going to have to demand that the corporate greed stop. Our premiums and drug costs continue to rise, because the corporate health care giants want it that way.
Jonathan and Susan Knopf live in Silverthorne.
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