Health Insurance Company CEOs Total Compensation in 2008

A few months back we posted the Total Compensation for a number of Health Insurance Company CEOs for 2007. Those numbers, culled from the companies’ SEC filings (Schedule 14A) appears immediately below. Below that are the numbers for 2008, courtesy of FierceHealthcare.com through Jan Rodolpho, RN.

As you can see, the year has brought decreases for some CEOs (but not all). One wonders, discretion being the better part of valor, if the clamor for health care reform and the pursuit of a Public Plan, has counseled caution –for the time being– regarding executive compensation. If the timing for further compensation has merely been adjusted so as to backload payments until after the health care reform debate is settled. Either way, the numbers pretty much speak for themselves. Perhaps a slight bit of context is in order, however: it has struck me that Aetna’s Ronald Williams received $24,300,112 last year. That’s $467,309.85 per week. That’s a house. Maybe not a house that Mr. Williams would live in, but a house nonetheless. The man makes a house a week. And interestingly enough, if Mr. Williams were to eschew the purchase of a house on any given week and instead look to deposit the money in a bank– in order to remain FDIC insured (up to $250,000)– he would actually need to open more than one account–every week. Lest we lament the fate of the other CEOs on the list, in 2008 Ms. Braly had to get by on $189,311.76 per week, and Mr. Hemsley had to somehow manage on $62,327.73 per week (but perhaps he was able to save a little from last year when he made $253,164.02 per week).

Res Ipsa Loquitur.

Ins. Co. & CEO With 2007 Total CEO Compensation

• Aetna Ronald A. Williams: $23,045,834
• Cigna H. Edward Hanway: $25,839,777
• Coventry Dale B. Wolf : $14,869,823
• Health Net Jay M. Gellert: $3,686,230
• Humana Michael McCallister: $10,312,557
• U.Health Grp Stephen J. Hemsley: $13,164,529
• WellPoint Angela Braly (2007): $9,094,271
  L. Glasscock (2006): $23,886,169

Ins. Co. & CEO With 2008 Total CEO Compensation

• Aetna, Ronald A. Williams: $24,300,112
• Cigna, H. Edward Hanway: $12,236,740
• Coventry, Dale Wolf: $9,047,469
• Health Net, Jay Gellert: $4,425,355
• Humana, Michael McCallister: $4,764,309
• U. Health Group, Stephen J. Hemsley: $3,241,042
• Wellpoint, Angela Braly: $9,844,212

See Nonprofit Health Related CEO Compensation Here.

Update: “Why WellPoint’s Angela Braly Deserves A Raise”

Ezra Klein to Leave American Prospect

Because, quite frankly, he is simply excellent at what he does, it’s well worth noting that he’ll be doing it somewhere else. Ezra Klein, formerly of American Prospect, has announced that he is moving to the Washington Post.

His parting blog, like almost everything else he writes, is a good read. Lets hope that WaPo affords him the freedom and support that American Prospect so wisely did.

Iowa Turns to Health Care in Finding Same-Sex Plaintiffs “Similarly Situated”

The Iowa Supreme Court unanimously ruled today that marriage should not be limited to a man and a woman after reviewing Iowa’s marriage statute under strict scrutiny.  The case is Varnum v. Brien.  Interestingly, when it came to the important constitutional touchstone of whether same-sex couples are in fact “similarly situated” with straight couples, the Court cited two examples to rule affirmatively– one of which is family health care decisions.

“Society benefits…from providing same-sex couples a stable framework within which to raise their children and the power to make health care and end-of-life decisions for loved ones, just as it does when that framework is provided for opposite-sex couples.”

That notion as expressed is a first.  While a handful of American states’ high courts have ruled that marriage should be afforded to same-sex couples, the Iowa Supreme Court is the first to expressly mention family health care decisions in the evaluation of whether same-sex couples are similarly situated with heterosexual couples.  Two courts’ opinions ruled in favor of same-sex marriage without a “similarly situated” finding: Hawaii in Baer v. Lewin (74 Haw. 530 (1993)) and Massachusetts in Goodridge v. Department of Health (440 Mass. 309 (2003)).  And although California (In re Marriage Cases, 43 Cal. 4th 757 (2008)) and Connecticut (Kerrigan v. Commissioner of Public Health,  289 Conn. 135 (2008)) ruled similarly under an Equal Protection argument, these opinions found plaintiffs “similarly situated” based on their intent to enter into formal, legal, recognized family relationship– without highlighting the importance of family health care decisions.

The ruling has already caused a stir in the State Capital.  Reactions vary across the political spectrum.  Proponents of same-sex marriage are ecstatic.  Opponents have already raised the possibility of a constitutional amendment.  Other legislators, such as State Rep. Dave Heaton, aren’t exactly warmed up to the idea of same-sex marriage, but recognize the need for rights– such as the Court’s concern for health care decisions– for same-sex couples.  To read those reactions and more, click here.

House Subcommittee Hearing Scheduled Today: The End of “Pay to Go Away” Deals Between Drugmakers?

A House Energy and Commerce subcommittee hearing was scheduled for today regarding the practice of brand-name pharmaceutical companies paying generic drugmakers to delay the launch of their drugs.  These agreements, sometimes known as “pay to go away” arrangements, allow the brand-name pharmaceutical companies to benefit by keeping the cheaper generic drugs off the market for a period of time,  and essentially holding a monopoly on the drug for longer.  The generic drug company also benefits, as they are paid to simply delay their drug’s entrance into the market.

The Wall Street Journal reported that the FTC has fought these payments for years, Democrats have discussed passing legislation to forbid such deals, and President Obama has promised to stop the arrangements in his budget.  Senator Herb Kohl (D-Wis.) introduced a bill in February to abolish these deals and Rep. Bobby Rush (D-Ill.) introduced a comparable bill in the House last week.

The WSJ states that generic drugs can cost as little as a quarter of the brand-name drug, which can ultimately save billions of dollars in drug costs.  Eliminating the deals that keep the generic drugs off the market would therefore create significant savings to the country’s health care system.  Scott Hemphill, associate Professor at Columbia Law School, told the WSJ that ten brand-name drugs with about $17 billion in annual sales are now protected by the agreements, including Pfizer’s Lipitor.  Pfizer said that this was not the case.

Since 2001, the FTC has filed six suits to stop these deals, with little success.  However, in February, FTC Commissioner Jon Leibowitz said that he believed Obama’s administration was going take action to stop the “pay to go away” deals.  According to Medical News Today:

Leibowitz said “The new administration does seem to recognize that this is a real problem.”  He added that “fixing it … would actually help pay for health care reform.” Leibowitz said FTC will take a two-pronged approach to stopping “pay-for-delay” settlements. First, the agency will challenge the most anti-competitive settlements in court, and secondly, it will support legislation against such deals. Leibowitz said he expects the Obama Department of Justice to be “much more supportive” of legal challenges to the settlements than the Bush administration. He added that it also is possible “the-pay-for delay settlement issue or problem will get resolved in health care reform, and … if that happens, then it will presumably get resolved more expeditiously.”

Physician Compensation

The Bureau of Labor Statistics, U.S Department of Labor, Occupational Outlook Handbook, 2008-09 Edition, publishes the data shown immediately below regarding physician compensation. The BLS report lists Primary Care Physicians under “Family practice.” The Handbook states:

.
Total compensation for physicians reflects the amount reported as direct compensation for tax purposes, plus all voluntary salary reductions. Salary, bonus and incentive payments, research stipends, honoraria, and distribution of profits were included in total compensation.

Specialty	Less than two years in specialty	Over one year in specialty
Anesthesiology	$259,948	$321,686
Surgery: General	228,839	282,504
Obstetrics/gynecology: General	203,270	247,348
Psychiatry: General	173,922	180,000
Internal medicine: General	141,912	166,420
Pediatrics: General	132,953	161,331
Family practice (without obstetrics)	137,119	156,010
Footnotes: (NOTE) Source: Medical Group Management Association, Physician Compensation and Production Report, 2005.

Footnotes:
(NOTE) Source: Medical Group Management Association, Physician Compensation and Production Report, 2005.
Self-employed physicians-those who own or are part owners of their medical practice-generally have higher median incomes than salaried physicians. Earnings vary according to number of years in practice, geographic region, hours worked, skill, personality, and professional reputation. Self-employed physicians and surgeons must provide for their own health insurance and retirement.

The American Medical Group Association (AMGA) offers a 2008 Physician Compensation Survey which is more comprehensive than the BLS data and has been approved for use in conjunction with the Centers for Medicare and Medicaid (CMS) regulations at 42 CFR 413.78(f) pertaining to calculations of physician pay (median) in reference to Graduate Medical Education. It features a wide range of specialist compensation data.