Follow the Money: Non-Profit Hospital CEOs Quietly Collect Their Millions While US Health Care Reform Battle Rages

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By Roy M. Poses, MD, Clinical Associate Professor of Medicine at Brown University, and the President of FIRM – the Foundation for Integrity and Responsibility in Medicine. Originally published by Health Care Renewal.

In Washington, DC the health care policy wars continue, with a few Reublican senators working behind closed doors on a bill to “repeal and replace” Obamacare, aka the Affordable Care Act, and Democrats decrying their secrecy.  Just as during the era in which Obamacare was enacted, there is constant discusison of how US health care costs continually rise, driving up insurance premiums, and how access to health insurance is continually in peril.

However, while the current Republican process to write new legislation seems strikingly opaque, in neither era has there been a frank discussion of why US health care costs are so amazingly high, and disproportionate to our mediocre health care outcomes. In particular, there has hardly been any discussion of just who benefits from the rising costs, and how their growing wealth may impede any real cost-cutting measures.

Extreme Compensation for Top Managers of Non-Profit Hospitals

An obvious example is the gravity defying pay given to top health care managers, particularly the top managers of non-profit hospital systems.

Such systems provide much of the hospital care to Americans, and most have declared their missions to be providing the best possible care to all patients, or words to that effect.  Many explicitly include care of the poor, unfortunate and vulnerable as a major part of their missions.  As non-profit organizations, their devotion of mission provides some rationale to their freedom from responsibility for federal taxes.

As we last discussed in detail in May, 2016, we have suggested that the ability of top managers to command ever increasing pay uncorrelated with their organizations’ contributions to patients’ or the public’s health, and often despite major organizational shortcomings indicates fundamental structural problems with US health, and provides perverse incentives for these managers to defend the current system, no matter how bad its dysfunction.

In particular, we have written a series of posts about the lack of logical justification for huge executive  compensation by non-profit hospitals and hospital systems.  When journalists inquire why the pay of a particular leader is so high, the leader, his or her public relations spokespeople, or hospital trustees can be relied on to cite the same now hackneyed talking points.

As I wrote in 2015,  and in May, 2016,

It seems nearly every attempt made to defend the outsize compensation given hospital and health system executives involves the same arguments, thus suggesting they are talking points, possibly crafted as a public relations ploy. We first listed the talking points here, and then provided additional examples of their use. here, here here, here, here, and here, here and here

They are:

– We have to pay competitive rates

– We have to pay enough to retain at least competent executives, given how hard it is to be an executive

– Our executives are not merely competitive, but brilliant (and have to be to do such a difficult job).

Yet as we discussed recently, these talking points are easily debunked.  Additionally, rarely do those who mouth the talking points in support of a particular leader provide any evidence to support their applicability to that leader.

But since May, 2016, we have steadily accumulated more stories about million-dollar plus pay for CEOs and other top managers of non-profit hospitals and hospital systems.  The reports may be shorter than they used to be, as journalism comes under economic and other attack, and as more journalistic resources go to cover the current president.  Here are some examples, in chronologic order per the date of the published article, rather telegraphically.

Examples of High Executive Pay

Boston, Massachusetts area, August, 2016 (Per the Boston Business Journal)

Brigham and Women’s Hospital CEO Dr Elizabeth Nabel, total compensation $5.5 million in 2014, 20% higher than 2013.  Talking points =  brilliant: “committed to retaining a team of top professionals,” per Edward Lawrence, Chair, Partners Board of Trustees

Tufts Medical CEO Dr Michael Wagner, $1.1 million, 82% increase.

UMass Memorial Medical Center CEO Dr Eric Dickson, $1.6 million, 74% increase, Patrick Muldoon, President UMass Memorial Center’s biggest hospital, $1.2 million, 67% increase

West New York State, August, 2016 (Per the Buffalo News)

Catholic Health System CEO Joseph D McDonald, $1.4 million.

Roswell Park Cancer Institute CEO Candace S Johnson, $1 million

Kaleida Health CEO Jody L Lomeo, $1 million:

Talking points = brilliant “few executives have the required skill set and experience to fill these posts”

New Jersey, September, 2016 (Per NJ Advance Media)

Top 10 hospital CEOs received total compensation from $1.94 million to $4.7 million

New Orleans, Lousisiana, September, 2016 (Per the Times-Picayune)

Ochsner Health System former CEO and board chair Dr Patrick Quinlan, $3.3 million in 2014, current CEO and board member Warner Thomas, $1.49 million.  Talking points = competitive rates and brilliant: “we must compete nationally to recruit top talent”

Touro Infirmary CEO James Montgomery, $1.3 million

Children’s Hospital Inc Chief Medical Officer Alan Robson, $1.26 million

General talking points = competitive rates: “you’re looking to attract hospital executives from Californai or New York where they’re paid a lot of money”

Gastonia, North Carolina, February, 2017 (Per the Gaston Gazette)

CaroMont CEO Doug Luckett, $1.03 million in 2015.  Talking points = retain and brilliant “paying what it takes to ensure they attract and retain top-level talent that can help provide premiums health care”

Dayton, Ohio, March, 2017 (Per the Dayton Daily News)

Kettering Health System CEO Fred Manchur, $1.65 million in 2015, former president Terri Day, $1.23 million, current president Roy Chew, $1.07 million

Premier Health former CEO James Pancoast, $1.42 milllion (excluding retirement payments) in 2015. Talking points = brilliant “you’ve got one person at the top who’s trying to provide oversight, direction, and strategy.  At the same time, health care continues to grow in scope, complexity, regulation, and compliance.”

York County, Pennsylvania, April, 2017 (Per the York Daily Record)

WellSpan Health president Kevin Mosser, $1.6 million in 2014.  Talking points = competitive rates Forrest Brisco, associate professor, Penn State Smeal College of Business, “nonprofit hospitals are competing with for-profit hospitals”; brilliant: “If you are at the top of a health care organization, you’re going to have pay that’s higher than many members of the organization. The the skill and knowledge to understand and interact with surgeons and physicians can command a high salary” [ed note: which often seems higher than those of some surgeons and physicians, though]; also brilliant: Robert Batory, senior vice-president and chief human resources officer, Wellspan, “Kevin has 24/7 responsibility for Wellspan.”

Ephrata Community Hospital (WellSpan subsidiary) CEO  and WellSpan Medical Group (WellSpan subisidiary) CEO  “more than $1 million

Winston-Salem, North Carolina, May, 2017 (Per the Winston-Salem Journal)

Novant Health Inc CEO Carl Armato, $1.31 million in 2015.  Talking points = retain and brilliant “high compensation levels are necessary to recruit and retain executive to run a ‘very complex organization'”

Tri-Cities region, Tennessee and Virginia, June, 2017 (Per WJHL)

Wellmont Health System CEO Bart Hove, $1.4 million in 2015.  Talking points = competitive rates: Wellmont board of trustees chair Roger Leonard, “we have to compete on a national level and we’re competing not just with other non-profits, but we’re competing with other for-profits”

Mountain States Health Alliance CEO Alan Levine, $1.3 million in 2015. Talking points = competitive rates: HSHA board of trustees chair Barbara Allen, “make sure CEO pay is comparable to similarly sized facilities across the country with similar complexities”; retain and brilliant, “we want to attract the best talent … and be able to retain him.”

Connecticut, June, 2017 (Per the Connecticut Post)

Yale New Haven Health System CEO Marna Borgstrom, $3.8 million in 2015.  Nine other employees paid over $1 million, including Bridgeport Hospital CEO William Jennings, $1.5 million, Greenwich Hospital CEO Norman Roth, $1.3 million.  Talking points = brilliant: Yale senior vice president of public affairs, “Yale New Haven Health is the largest and most complex health system in the state.”

Also, a total of 39 people, including the above, received over $1 million in 2016.

General talking points = brilliant: “there are a limited number of executives experienced enough to guide a state-of-the-art hospital and growing healthcare system in an increasingly competitive and complex industry”; competitive rates: “pay and benefits for such executives need to be comparable to what they could receive at another leading national hospital system or another industry”

Summary and Conclusions

The current inflamed discussion of “Obamacare” and Republican attempts to “repeal and replace” it focuses on the costs of care and how they affect individual patients.  Examples include concerns about health insurance premiums that are or could be unaffordable for the typical person; insurance that fails to cover many costs, and thus may leave patients at risk of bankruptcy due to severe illness; poor people unable to or who might become unable to obtain any insurance, and perhaps any health care.  Yet there is little discussion of what really drives high and ever increasing health care costs (while quality of health care remains mediocre).

That may be because those who are benefiting the most from the status quo want to prevent discussion of their role.  There are many such people, but top management of non-profit hospitals provide a ready example.  Their institutions’ mission is to provide care to sick patients.  Many such hospitals specifically pledge to provide care to the poor, vulnerable, and disadvantaged.  Non-profit hospitals have no owners or stockholders to whom they owe revenue.

Yet these days the top executives of non-profit hospitals receive enough money to become rich.

See the examples above. 

The justification for such compensation is pretty thin.  Consider the talking points above.  Apparently hospitals are extremely concerned about paying top management enough to recruit and retain them.  Yet there is much less evident concern about paying a lot of money to recruit and retain the health care professionals who actually take care of patients to fulfil the hospitals’ mission.  Hospital CEOs are frequently proclaimed to be brilliant, visionaries, or at least incredibly hard workers with very complex jobs.  I wonder if those who make such proclamations have any idea what it takes to be a good physician or a good nurse.  Yet such health care professionals’ hard work, long training, devotion to duty, and ability to deal with trying situations and make hard decisions rarely inspire hospitals to shower them with money.

Furthermore, hospital CEO compensation is almost never justified in terms of their ability to uphold and advance the fundamental hospital mission, taking care of sick people.  The articles above do not contain any justifications of generous CEO compensation based on hospitals’ clinical performance or health care outcomes.  At best, hospital executive pay seems to be justified by the hospitals’ financial, not clinical performance.

So why do non-profit hospital CEOs get paid enough to become rich?  Apparently, because they can.

As we discussed here, there is a strong argument that huge executive compensation is more a function of executives’ political influence within the organization than their brilliance or the likelihood they are likely to be fickle and jump ship for even bigger pay.  This influence is partially generated by their control over their institutions’ marketers, public relations flacks, and lawyers.  It is partially generated by their control over the make up of the boards of trustees who are supposed to exert governance, especially when these boards are subject to conflicts of interest and  are stacked with hired managers of other organizations.

Furthermore, such pay may provide perverse incentives to grow hospital systems to achieve market domination, raise charges, and increase administrative bloat.  As an op-ed in US News and World Report put it about executive pay in general,

But the executive pay decisions made inside corporate boardrooms have an enormous impact in the outside world. Outrageous pay gives top executives an incentive to behave outrageously. To hit the pay jackpot, they’ll do most anything. They’ll outsource and downsize and make all sorts of reckless decisions that pump up the short-term corporate bottom line at the expense of long-term prosperity and stability.

So I get to recycle my conclusions from many previous posts….

We will not make any progress reducing current health care dysfunction if we cannot have an honest conversation about what causes it and who profits from it.  In a democracy, we depend on journalists and the news media to provide the information needed to inform such a discussion.  When the news media becomes an outlet for  propaganda in support of the status quo, the anechoic effect is magnified, honest discussion is inhibited, and out democracy is further damaged.

True health care reform requires publicizing who benefits most from the current dysfunction, and how and why.  But it is painfully obvious that the people who have gotten so rich from the current status quo will use every tool at their disposal, paying for them with the money they have extracted from patients and taxpayers, to defend their position.  It will take grit, persistence, and courage to persevere in the cause of better health for patients and the public. 

And for our musical interlude, the beginning of “For the Love of Money,” sung by the O’Jays, used in the official intro of season 2 of guess what show?

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About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered. To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.


  1. Normal

    Non-profit doesn’t mean no incentives. Hospitals all over the USA are building local monopolies and the monopoly profits go to the administrators.

    What happened to anti-trust enforcement?

    1. oh

      Anti Trust enforcement died ever since the FTC allowed the airlines and huge oil companies to merge and the agency has been aiding and abetting mergers in industries since then. Thanks, Carter, Reagan, Bush, Clinton, Bush II and Obama!

      1. Kris Alman

        Portland, Oregon got some attention last year for a CEO surtax.

        There is no hard line between non-profits and for-profits in the medical industrial complex.
        Advantage for-profits: Capital and asset stripping, a la Fortune 500 company Centene which swooped in to Oregon and bought a Medicaid Coordinated Care Organization here

        Advantage non-profits: tax advantages and perceived “good guys”–like the BlueCross BlueShield Association.

        No non-profit should be able to pay their executives millions–esp. when it comes to health care “non-profits.”
        With healthcare prices out-of-control, the Oregon legislature should borrow an idea from Steve Novick’s playbook. Establish a state surtax on for-profit and “nonprofit” healthcare executive pay.

  2. cnchal

    We will not make any progress reducing current health care dysfunction if we cannot have an honest conversation about what causes it and who profits from it.

    Honestly, I am amazed that a society that celebrates shopping as entertainment, knows the price of everything and the value of nothing, and demands freee chipppping for needless crapola from China is not disturbed in the least that no prices for anything related to a doctor or hospital visit are shown until after the product or service is rendered. And then surprise!

    Amazon can only look on with jealous rage at the obscene profits available for extraction from suffering people, and they are taking heart and reforming themselves by running a special algorithm just for you, and giving you the best price available, customized to your wallet or bank account. At least they show you a price before you buy.

    1. PKMKII

      not disturbed in the least that no prices for anything related to a doctor or hospital visit are shown until after the product or service is rendered. And then surprise!

      How could they know? Costs are buried in a byzantine maze of codes, impossible to know what code your particular condition will get assigned to, and then it’s subject to change a few more times until the hospital finds the one the insurance company is willing to shell out for. It’s a system designed around obfuscation and trying to pull a fast one on all other parties, which leads to the ridiculous admin fees that create the premium amounts we pay for subpar healthcare.

    2. oh

      These folks have not cared because they think the insurance company is paying the bill. Of late, surprise, surprise! That’s not the case with higher copay, coinsurance and exclusions. We need to remove the insurance company layer out of health care first and then work on strict regulation of the other components of high health care costs.

    3. Grumpy Engineer

      Oh, yes. Lacking of transparent pricing is a major contributor to the dysfunction in the American healthcare system. Even worse is the standard practice of patients being required to sign a sheet where they agree to pay for any charges that insurance doesn’t cover, without even knowing what those charges will likely be. This is how uninsured (or under-insured) people end up signing their lives away financially.

      Another part of the problem is the mindset that “if the insurance company covers it, then everything is okay”. It’s not okay. If Mylan jacks up the price of an Epipen by a factor of 5 and your out-of-pocket expense remains the same, it still matters and is still bad news. Why? Because even though you don’t get hammered at the pharmacy counter, you’ll get hammered the next time the insurance company announces new premium hikes. The 5X dollars that get sent to Mylan have to come from somewhere.

      1. Anon

        Most hospitals also require admittants (patients) to sign away their rights to court proceedings through binding arbitration (essentially a kangaroo court).

  3. TedHunter

    Right on the money. Thanks for some very relevant research and keeping your eyes on the ball.

    In a future post on this I’d like to know what the total budget of said hospitals is/was (during the reference period for each known CEO compensation package)? Herein: What was the total compensation budget for physicians (and how many of them were employed)? Ditto nurses? Budget for CAPEX equipment purchases? How does the CEO compensation compare to each of the above? Ideally: are there any historical numbers of CEO compensation starting in the, say, 1950s, and ditto (let’s call them) hospital KPI’s from then?

    Good luck.

  4. Holly

    Managed a practice in Charlotte few years ago, my employer had coders “teach” physicians what questions to ask, how to document so they could “up charge” a visit. A simple UTI, which in reality could be a nurse only visit but unbillable to Medicare, went to a level 4 or 5. They would have quarterly meetings with physicians if they had “too man” low coded visits. Saying that if they didn’t have a perfect bell curve of visits, that Medicare would claim they were billing fraudulently.

    Nothing different than this (which you’ve already linked to, I believe). Or the same thing that is happening in corporate vet practices (Banfield/Mars – with a subsquent uptick in Veterinarian suicides).

    The beginning of William Davis, MD’s recent book Undoctored, talks a bit about the financial motivations in modern day practices and why are simpler and safer alternatives actively squashed.

    1. Carolinian

      Thanks for the firsthand info and pointing out that the vet business is suffering from the same disease.

      In my town the local newspaper published executive salaries a few years back and at the top of the list for the county was the administrator of the local hospital system. This system has been relentlessly spreading its footprint and recently turned one of our defunct textile mills into administrative offices. The change seems more than symbolic.

      Meanwhile the main hospital system for a nearby city has been establishing beach head offices and threatening the business of the local megaplex. Billboards go up touting the virtues of each. Clearly for that highly paid executive the poaching translates into “this means war.” One wonders how much of each vast hospital bill goes into marketing and acquisition of potential customers. The business school mentality rules all.

  5. Eureka Springs

    Isn’t it amazing what truly progressive taxation and a dramatically simplified tax code could accomplish in re the long train of (FIRE sector) abuses this blog covers so well.

  6. oaf

    …some *non profits* grow like tumors in our communities. As well as in our economy. When they swell and metastasize, the infrastructure burden also is largely shifted to the taxpayer base; which has less and less incentive to stick around. It is not just health care…highly (over) compensated professionals; *specially* credentialed, in numerous positions…in a system rigged to make us get ill so that our lives’ value may be siphoned…as we die…

  7. Northeaster

    For those of us here in MA, I pulled donations and lobbying spending for the companies listed here in MA. While they are totals, including individual contributions, I also targeted CEO’s. I did not include their individual PAC’s. Pay-to-play is the only game in town here, and these entities qualify. While not the millions unions have totaled, or the individual lobbying/law firms that donate huge sums, it’s still significant. Thanks to Independent/”Unenrolled voter suppression gerrymandering here with a State House Speaker felon Finneran for such to show for it, not much will change.

    Brigham and Women’s Hospital

    Total Donations: $108,790.50
    2016 Lobbying: Under $1K
    Elizabeth Nabel: $9,375.00

    Tufts Medical

    Total Donations: $122,737.62
    2016 Lobbying: $151,000.00
    Michael Wagner: $5,677.50

    UMass Memorial Medical Center

    Total Donations: $31,482.50
    2016 Lobbying: $203,162.63
    Eric Dickson: $8,737.50

  8. Grumpy Engineer

    Hmmm… I’d like to see a similar list of salaries for the presidents and senior administrators in our country’s so very noble “non-profit” colleges and universities.

    Both the “medical industrial complex” and the “educational industrial complex” have gotten very adept at raking in cash flows that are growing exponentially over time. And notably, growing faster than the wages people use to pay for their services. And the money’s going somewhere, despite the “non-profit” aspect. Now we know where at least some of it’s going.

      1. Grumpy Engineer

        Wow. Thank you for the links. And I must say… Those results were very illuminating. The problem appears to be just as bad in higher education as it is in medical care.

        1. TedHunter

          @ Grumpy Engineer: Here’s a survey of academic corruption in Europe. It’s the only one to look at corruption in the recruiting of academic staff at al levels. I’m not aware of such a survey in the US.

          @ Vatch: Perfect, muchas gracias.

  9. Mikerw

    The healthcare system works really well if you define “well” as extracting the maximal amount of profit possible. The situation as described is worse than the article implies. Our daughter has a severe disease and has had multiple major surgeries at Presbyterian Weill Cornell in NY. After one surgery, while she was in recovery, I went outside to quickly eat something. If you know the hospital’s main entrance it is a circular drive with valet parking. Importantly, it is also part of the entrance to the emergency room. It is congested most of the day. I observed two very high-end cars parked in the drive and adding to the congestion. One belonged to the CEO of the hospital and the other to the Dean of the Medical College. Neither require outside parking, valet should suffice. Yet, one can surmise that out of complete selfishness they park outside and make everyone else’s life more difficult.

    Recently, and based on the last four 990 this non tax paying entity had $330 million in operating income, ordered that one of the PAs in the GI practice be let go as a budget move. This has an adverse impact on the doctors and patients. We were very saddened, but not surprised.

  10. marym

    HR 676 Expanded and Improved Medicare for All stipulates that all provider entities (hospitals, clinics, medical practices, etc.) must be public or private non-profit.

    Title II: These entities receive public funds in accordance with a negotiated global budget for operating expenses. Care providers – doctors, nurses, etc. – are paid from the global budget or capitation payments (if salaried), or fee for service.

    The bill doesn’t speak to the specific point of executive compensation. This is just for info – I’m not qualified to say if there would be a sufficient mechanism here for governing executive pay.

    1. Vatch

      I don’t see the requirement that all provider entities must be public or private non-profit. What am I missing in the text of the bill?

  11. Michael McCarthy

    Most if not all doctors with whom I’ve dealt have told me they really don’t understand the billing system which pays them. Our insurance is with Anthem Blue Cross which is a non profit that pays its CEO in the neighborhood of 6+ million a year. Republicans like to see themselves as sage in pointing out that a benefit once granted is virtually impossible to take away from those receiving any form of government help, but I’ve never heard the same said about executive compensation no matter how poor the performance of those executives.

  12. Synoia

    Nationalize the non-profits, and pay the employees on the Civil Service scale.

    Only employees can practice at the hospitals.

    The objective is to improve the average, not continue to improves at the extreme.

  13. JimTan

    This is troubling.

    I think its part of the larger issue that our government healthcare programs have a built in incentive for healthcare providers to overprice, because most programs are prohibited from negotiating prices. The severity of this problem in the long run is a question of how aggressively healthcare providers will raise prices. Some healthcare providers manipulate product prices, and chargemasters to make a healthy profit in this subsidized healthcare system. Others seek to aggressively raise prices, and drain as much money from this system as possible. We’ve seen this behavior recently, with a justified public outcry, over the pricing strategies of drug companies like Valent, Turing Pharmaceutical, and Mylan. These are examples of aggressive pricing in small corners of the subsidized healthcare system that could be very problematic if systematically implemented across larger sectors. The ultimate question here is how much can healthcare providers raise prices in a system prohibited from negotiating prices, and by what quantity do these price increases threaten the entire system?

    During the California Electricity Crisis of 2000 and 2001, Enron created artificial power shortages which allowed it to completely control the electricity prices paid by state utilities. The state was forced to pay whatever electricity prices Enron dictated, and Enron acted aggressively to drain as much money from this system as possible. These exorbitant prices made huge profits for Enron, draining enough money from state utilities to cause the bankruptcy of Pacific Gas and Electric Company (PG&E), the near bankruptcy of Southern California Edison, and led to multiple large-scale ‘rolling’ blackouts. In the end, Enron traders joked about how their actions stole from poor grandmothers in California.

    A Single Payer system that negotiates prices would provide healthcare for the largest number of Americans, and control costs which might threaten the survival of this system.

    1. Wisdom Seeker

      Single Payer will NOT solve the cost issue.

      Until we break up the monopolies (pharmaceuticals, local hospital monopolies, medical equipment monopolies…) and enlarge the pool of physicians (medical colleges are designed to limit physician supply and maintain salaries), we haven’t got any leverage to “negotiate prices”.

      The best cure for high prices is transparent pricing and genuine competition among suppliers. Not a government-run single-payer system that will immediately be covertly captured by the existing special-interest monopolies.

      1. JimTan

        Our leverage to negotiate prices ( which is currently prohibited ) is the U.S. Government pays for 27% of All U.S. Healthcare Spending per Year. Thats’s based on $2.9 trillion trillion annual US healthcare spending in 2013, and a $777 billion budget for Medicare & Medicaid over the same time period. Single payer can only increase this number. This should make it obvious Why the U.S. Pays More Than Other Countries for Drugs and likely all other forms of healthcare as well.

        1. Wisdom Seeker

          In the current crony-capitalist political regime, increasing the US Gov’t share of healthcare payments will INCREASE costs, not decrease them.

          You seem to have this quaint notion that the government will negotiate on behalf of taxpayers. I don’t see any evidence of this being the case. It might have been true in the 1930s and 1940s, but for the past 20-30 years the profit-seekers have gotten too good at capturing the regulators and twisting the rules to their favor.

          A key reason why healthcare and higher education costs have both been increasing much faster than overall inflation is because both have been federally subsidized. But as prices overseas demonstrate, there’s no fundamental economic justification for the prices charged in the USA for most medical products and services.

  14. OldBlueCat

    Explains a lot about what’s wrong with universities today…I’ve seen the same arguments for why ten people who do the actual work need to be laid off to hire a new director or deanlet to make the university great again.

    1. lyman alpha blob

      It’s the MBA culture’s self-licking ice cream cone and it’s everywhere. Once someone gets a degree in business management, that’s all they are ever fit to do evidently, and they always move up the ladder no matter how bad at managing they are. Since the management jobs pay better, more people go to business school to get the degree (because how could anyone manage anything without having the expensive credential first ?!?), requiring ever more management sinecures to keep these brilliant people from having to do any actual work.

    2. Lord Koos

      I live in a small college town. From what I hear from people at the school, they’ve been hiring more administrators at good salaries, while at the same time cutting pay for TAs, teachers, and office workers. The capture of public universities by the oligarchs is definitely a thing.

  15. GW

    Once in a while I post on Reddit and it is shocking how little people understand where the money is going. Everyone is focused on insurances and complaining they are making so much money. But this is only a red herring when looking at the bigger picture. Administrators are overpaid when looking at global benchmarks. Then there are the ones who can bill creatively. Then there are the in other parts of the world not existing services helping the ones who were billed in such ways. Then there is the bizarre system of who medicine is priced.

    The system before the ACA was not sustainable. The ACA was the least disruptive change for the grafters as it left the landscape with plenty of places for playing games. Standardization, simplifications and a little more transparency are the real threats to the status-quo.

  16. Arizona Slim

    Thanks for the earworm. I can’t get that money song out of my head.

    And I have to say that the Apprentice 2 intro sequence is pretty catchy.

  17. Just me

    agree that some of these folks receive ‘obscene’ compensation while the recipients of their ‘service’ are struggling daily to receive needed care and treatment, no frills allowed or afforded. but are they any different than the congressionals who receive ‘much more than adequate’ compensation for the ‘service’ they provide, as well as trying to obtain under-table compensation from many healthcare lobbyists and other associated entities? they feel ‘entitled’ to such for all the ‘hard work’ they do. especially the ‘hard work’ of making sure government services are stalemated as often as possible…. and I will not even mention ‘obscene’ salaries of many pro sports players…. whose sole job is to entertain us and keep the masses pacified and occupied elsewhere while complacency slides further to apathy and on to dependency and ultimately back to bondage…..

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