WSJ: As Patients, Doctors Feel Pinch, Insurer's CEO Makes a Billion

[question everything]

As Patients, Doctors Feel Pinch, Insurer's CEO Makes a Billion

UnitedHealth Directors Strive To Please 'Brilliant' Chief; New Questions on Options
Selling Trout for 40¢ a Pound
By GEORGE ANDERS
April 18, 2006; Page A1
The Wall St. Journal

(snip)

Unrealized gains on Dr. McGuire's options totaled $1.6 billion, according to UnitedHealth's proxy statement released this month. Even celebrated CEOs such as General Electric Co.'s Jack Welch or International Business Machines Corp.'s Louis Gerstner never were granted so much during their time at the top. Dr. McGuire's story shows how an elite group of companies is getting rich from the nation's fraying health-care system. Many of them aren't discovering drugs or treating patients. They're middlemen who process the paperwork, fill the pill bottles and otherwise connect the pieces of a $2 trillion industry. The middlemen credit themselves with keeping the health system humming and restraining costs. They're bringing in robust profits -- and their executives are among the country's most richly paid -- as doctors, patients, hospitals and even drug makers are feeling a financial squeeze. Some 46 million Americans lack health insurance.

UnitedHealth's main business is offering health plans to employers and Medicare beneficiaries. Bigger employers usually pay employees' medical bills out of their own coffers and hire UnitedHealth to administer the health benefit. Smaller employers pay an annual insurance premium to UnitedHealth in exchange for having the insurer take on the risk of covering employees' health care. The "risk" business has been a particular gold mine for UnitedHealth and its rivals in recent years. As health-care inflation eased, insurers still raised premiums at double-digit rates. UnitedHealth's stock price tripled between January 2003 and January 2006, helped by acquisitions, although it has fallen back somewhat since the beginning of this year. UnitedHealth's net income in 2005 totaled $3.3 billion, nearly four times the figure in 2001.

(snip)

The Journal's analysis of 12 options grants to Dr. McGuire from 1994 to mid-2002 found that if the options had been randomly dated, the odds of their occurring at such propitious times were about 1 in 200 million. It raised the possibility that the options grants were backdated. Backdating an options grant isn't necessarily illegal, but civil or criminal actions could be brought if disclosure of the practice were inadequate, securities lawyers say. A UnitedHealth spokesman said the grants were appropriate, but the company's board is reviewing options-granting procedures.

The arrival of the $1 billion CEO would be a head-turner in any industry. But it's especially controversial in health care, where "people tend to view each dollar of executive pay as money that isn't spent on them," says Jonathan Weiner, a health-policy expert at Johns Hopkins University. Dr. McGuire and his supporters say the U.S. would be in even worse shape if it weren't for insurers such as UnitedHealth weeding out unnecessary treatments, bargaining with doctors and encouraging patients to seek out the highest-quality care.

(snip)

URL for this article:
http://online.wsj.com/article/SB114532417401928300.html (subscription)

[Erika]

1. W's America

Work as hard as you can to eliminate the middle class.

Pay the workers minimum wage, pay the CEO's billions. Redistribute the wealth.

[Wapsie B]

2. This is just the tip of the iceberg.

1.6 billion for 1 CEO. This is not considering how many lapdogs, err Sr. managers UnitedHealth has. And this is only 1 company. There are so many areas of graft in healthcare. Hospitals are being overrun by whitecollars and an ever-expanding team of administrative employees. It's all considered a normal part of business. But this has got to stop. McGuire's a big fish but only one of many.

[question everything]

4. This should be the poster story for universal health care

or, at least, for only non-profit providers.

As the WSJ - the WSJ! - points out: paying millions for CEO who just "manage" health care instead of the actual providers: doctors and hospital, not to mention cutting so many people from even accessing health care.

[bigtree]

7. McGuire is deep in the republican pocket

Bush: ‘Pioneering’ and privatizing Medicare

Archive Recent Editions 2004 Editions Jun 19, 2004

Author: David Donnelly, The Nations's Health/Workers' Safety
People's Weekly World Newspaper, 06/17/04

UnitedHealth Group CEO William McGuire co-hosted a $1.4 million fundraiser on August 26, 2003, for President Bush, and has personally raised more than $100,000 for President Bush’s re-election campaign.

Recently, McGuire’s insurance company was chosen by the Bush administration to receive a contract to distribute so-called “drug discount cards” under the Medicare plan. Also tucked into the Bush Medicare plan at the last minute was a provision to expand Health Savings Accounts, which are only offered by a few companies like Golden Rule Insurance Company. UnitedHealth purchased Golden Rule for $500 million cash just days before the legislation was passed.

Is there a connection?

Few insurance corporations had as much to win or lose in Medicare debate last fall than Minnesota-based UnitedHealth, the nation’s largest insurer. That’s why it comes as no surprise that their CEO, William McGuire, co-hosted a $1.4 million fundraising event in St. Paul, Minnesota on Aug. 26, 2003, for President Bush, and earned Pioneer status for personally raising more than $100,000.

The Congressional Budget Office estimated that the Bush Medicare program would provide an additional $14.2 billion in profits for HMOs and insurance corporations for handling the prescription drug benefits. Clearly, privatizing Medicare will improve UnitedHealth’s already healthy bottom line. The company had $1.8 billion in profits in 2003, a 35 percent increase from the previous year.

the rest of the story: http://www.pww.org/article/articleview/5386/1/220

[IChing]

3. Dr. McGuire's options totaled $1.6 billion

Now where is my Zantex? I need it after reading this.

$1.6 billion from this ONE PERSON would pay for how much health care or treatment to every person that needed it?

obscene........JESUS WOULD WEEP (offensive to moral principles; repugnant :}
nominated for obscenity

[bigtree]

5. UnitedHealth is ripe for a scandal

[napi21]

6. Well, it sure looks like that answers the question about who is the

real bad guys in the health care mess doesn't it? For years the politicians have been blaming the lawyers, the lawyers have been blaming the docs, the Docs have been blaming the ins companies.

I'm going to send this info to my 2 Senators and my Rep, and tell them, since we now know where the real problem is, DO SOMETHING ABOUT IT!