Here's another one to remember when someone tells you that our "private"
health care system works:
The Wall Street Journal ran a front-page story last week with the headline
that said it all: "As Patients, Doctors Feel Pinch, Insurer's CEO Makes
The story, datelined Minnetonka, Minn., was about William McGuire, a doctor
who stopped practicing in 1986 to take a management job with UnitedHealth Group
Inc., one of the largest HMOs in the country.
He's now the chief executive officer of the corporation, makes $8 million a
year in salary plus bonus, has personal use of the company's private jet and
has amassed what the Journal describes as "one of the largest stock options
fortunes of all time."
According to the newspaper, those options total $1.6 billion.
"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," the WSJ story said.
But the gist of the story is that while McGuire and other UnitedHealth execs
are raking in millions, their company is putting the squeeze on everyone else.
"Dr. McGuire's story shows how an elite group of companies is getting
rich from the nation's fraying health care system," the bible of the business
world reported. "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 newspaper's research shows that UnitedHealth has particularly benefited
in recent years as health care inflation eased somewhat.
Insurers still raised premiums at double-digit rates. At UnitedHealth, for
example, its stock price tripled from January of 2003 to January of this year
and its net income rose to $3.3 billion. Hence, the nice board-of-director-approved
windfall for McGuire. (Interestingly, former UW-Madison Chancellor Donna Shalala
is a member of UnitedHealth's board.)
"In Minnesota, such riches have infuriated some people," the story
continued. "Joel Albers, a Minneapolis pharmacist, regularly impersonates
Dr. McGuire at state fairs, donning a tuxedo, holding up an enlarged picture
of Dr. McGuire on a stick and handing out leaflets denouncing corporate greed."
Of course, this is just one more anecdote that serves to describe our broken
health care system, which leaves more than 40 million Americans without coverage
and an embarrassment of riches for those who know how to milk that system.
On one hand we have Medicare, which provides universal single-payer coverage
to all Americans over age 65 at about a 2 percent administrative cost. On the
other hand we have a hodge-podge of plans with layer after administrative layer
that gobbles up close to 20 percent in overhead costs (Dr. McGuire's just a
piece of that) and leaves millions out in the cold.
How hard can it be to choose in which direction we need to go?
Dave Zweifel is editor of The Capital Times.