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CEOs from leading healthcare companies are earning increased figures, report finds

A recent report by Axios has highlighted that since the Affordable Care Act has come into force, healthcare CEOs have been significantly profiting, with...

Catherine Sturman
|Jul 26|magazine6 min read

A recent report by Axios has highlighted that since the Affordable Care Act has come into force, healthcare CEOs have been significantly profiting, with companies cumulatively earning $9.8 billion.

The figure is astonishing, and will no doubt outrage US citizens, where their ability to access vital healthcare services is becoming an increased concern, especially with President Trump’s current efforts to replace the ACA within the US.

Since 2010, 70 CEOs “earnings have far outstripped the wage growth of nearly all Americans,” highlighting that these CEOs could be out of touch with the very patients that they are treating, and have no plans to rein in healthcare spending, which is steadily on the rise.

Based on financial reports from 70 publicly traded US healthcare companies, John Martin, former CEO of the pharmaceutical company Gilead Sciences, has accumulated $863 million, the highest figure of all CEOs. Following suit is John Hammergren (McKesson), accumulating $587 million, Leonard Schleifer, Regeneron Pharmaceuticals, who has amassed $338 million, and Stephen Hemsley of UnitedHealth Group with $279 million.

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However, the report highlights that “a large portion of what CEOs make, comes in the form of vested stock. These incentives drive their decision-making. The analysis shows that since the ACA was passed, health care executives routinely took measures to inflate stock prices — such as repurchasing shares or issuing dividends to shareholders — that led to higher take-home pay.”

A clever move, but this also has motivated CEOs to not focus on areas such as lowering prices, providing quality, patient centered, personalised services which are coordinated and systematic, to instead focus on the upsell of prescription drugs (which could be linked to the ongoing opioid epidemic in the US), raise prices and find ways in which to increase further revenue. Consequently, 11 pharmaceutical and drug-related company CEOs made the list.