High salaries obscure the real point


Without a doubt, there's a moral/ethical dimension to the amount people are being paid to run a company. So I'm not surprised at all to hear that people are shocked and outraged when they learned from our recent feature that health plan executives are making $10 million, $20 million or more per year to run companies which may not have treated their families right.

The truth, however, is that those salaries are a drop in the bucket compared with the billions of dollars these companies spend paying doctors and hospitals. I'm not saying that this means the salaries don't matter; but I am saying that it probably makes sense to solve the problem of how provider payments are allocated first, then worry about how some piggy executive is being paid off, as painful as that is.

It's the same problem Congress is grappling with on Wall Street. Right now, Congress critters are focused on the staggering $100 million payment Citibank owes one Andrew J. Hall for making a rollicking success out of their Philbro energy business. Hall wants every penny of the money, as specified in the contract, and people like Rep. Bernie Sanders are furious, noting that there'd be no Citi to pay the $100 million without a government bailout. Rep. Sanders, I feel your pain, but honestly, to me this is a side issue.

As painful as it is to put aside the problem of high executive pay in healthcare, I say regulators and legislators stay focused on the structural issues that help create some of the counterproductive behavior destroying the system. Look deeply at value-based purchasing, med mal reforms, health insurance exchanges and a government option; you name it--anything that can change the fundamental industry structure and the biggest inefficiencies within it. 

Then, and only then, will it be time to address individual greed. Remember, we're looking to save the healthcare system, not reform men's souls. That may be the next chapter, but we certainly don't have time for moralizing now. - Anne

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