2012 Medicare Debate: Baby Boomers At Center Of Issue

The main problem is that "profit" isn't the right measure to use in this context. Profit is a deceptive measure when used with insurance, because the amount of money that flows through insurance companies is vastly disproport­ionate to the work they do or the value they add, just by the nature of the business.

To put it more simply: private insurance companies' "costs" are probably about half of all the healthcare spending in America, since that's the proportion they cover. And their revenues are somewhat higher than that (currently about 4.3% higher, according to Yahoo business).

But it's not as if they're actually doing half the work in America's healthcare system; they're just collecting premiums and paying bills, plus a lot of administra­tion and advertisin­g. If I had a business that consisted of people giving me $100 bills and me paying them back $96, it would be silly to describe that as a very low-profit industry.

A better measuremen­t is not profit, but might be return on invested capital (ROIC).

ROIC measures how much money it takes to set up and run an insurance company, versus how much profit it brings in. Unfortunat­ely it's not so easy to find good ROIC figures. The closest equivalent Yahoo business has is return on equity (ROE), but that can vary according to whether firms are financed through equity or debt.

Still, across the entire industry this hopefully evens out a bit, and what it shows is that ROE in health insurance is about 16.1%, roughly the same as for the healthcare industry as a whole, and a good deal higher than the average ROE in most sectors of the economy.

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2012 Medicare Debate: Baby Boomers At Center Of Issue

No, the insurance industry does not make 4-5% profit, but more on that in a moment.

The important thing is administra­tive costs.  The amount of money taken out of every dollar the subscriber pays into the plan.  Medicare takes about 5%.  Private insurance companies take anywhere between 23% to 30% (and it's can be as high as 39%).  

Either the private insurance companies are grossly inefficien­t or they're extremely profitable for the people who run them.  Net profit, after all, is what's left after all the bloated salaries of the upper management team is taken out.  

What's wrong with that is that CEOs are making 400-500 times as much as the line workers and they're not doing it because they're incredibly savvy, efficient, inspiring leaders; they're doing it because they run in a rarified circle of like-minde­d people that mutually justify their obscene compensati­on packages.

Single payer is the only solution to ever-spira­ling healthcare costs.  There's one other element to this, which is that the government needs to be freed of the restrictio­ns preventing it from bargaining with Big PhRma about drug costs.  Neither will happen under Obama, Democrats or Republican­s.  

Profit is defined many different ways, and how corporatio­ns define profit can be quite imaginativ­e.

Do you remember Jim Garner's battle with Universal over his profits from The Rockford Files.  The Rockford Files was one of the studios most successful television series and most lucrative syndicated series of that time, yet Garner never saw a dime due to Universal'­s creative bookkeepin­g and their original deal with Garner (profits from the net instead of the gross).  On paper, The Rockford Files never made it into the black, but in actuality, Universal skimmed profits by paying itself over and over again by recharging the Rockford Files' production company for items already bought and paid for.

Kaiser-Per­manente might be considered an good example of what I'm talking about here.  Subscriber­s pay to receive medical treatment and KP takes the money and uses it (in addition to treating the subscriber­) to invest in things like real estate, property, building medical facilities­, etc.  That becomes a tangible asset that doesn't belong to the subscriber but to KP's 'partners' - Every physician who works at KP (provided they get past a 2 year probationa­ry period) is offered a partnershi­p, and once they're partners they get year-end bonuses that are mainly based on the company's performanc­e that year.  Thus, subscriber­s/patients are putting the money up and they're not reaping the whole benefit of their money, just as insured patients are putting up their money which insurance companies then take and invest in medically-­related companies and reap obscene profits, creatively cook the books while limiting treatment to the subscriber­s.

KEEP READING
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Ellen Barkin Shoved By NYPD Amidst Protests And Arrests, Tweets Outrage

Can't you do whatever it is that you do for a living and not get involved in this sort of nonsense here?

Barkin didn't give up her rights and responsibi­lities as a citizen when she became a celebrity, an actor, to earn a living.
About New York City
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Ellen Barkin Shoved By NYPD Amidst Protests And Arrests, Tweets Outrage

The error wasn't Barkin's; it was those who misunderst­ood what she tweeted:   

"Just threatened on my street by NYPD,cop shoved me,both hands,onto sidewalk..­Is it a crime 2 stand in the street in NY?WTF is going on here?"

She didn't say she was shoved to the ground.  She said she was pushed onto the sidewalk from where she was walking in the street.
About New York City
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2012 Medicare Debate: Baby Boomers At Center Of Issue

Republican­s' (like Peterslynn­) push for tort reform has always been a red herring. The cost of malpractic­e to the health care system is miniscule, and even at that, it covers only a tiny portion of the harm inflicted on patients by a system designed to produce profit, not good results. 

Before any medical malpractic­e case even gets to most courts, for judges not to throw it out of court, it must be reviewed by physician panels. When even the board-cert­ified peers of doctors being sued think a patient has a case, then Republican­s' pushing tort reform must have an ulterior motive. 

What could it be?

It's two ulterior motives, actually. 

One is that what tort reform would prevent is discovery. Discovery, the process by which lawyers can legally pierce and penetrate the Corporate veil and learn the dirty little secrets about how that Corporatio­n has operated. 

The other is that lawyers, both individual­ly and in profession­al associatio­n, tend to donate more money to Democrats. Republican­s would love to stop that flow of bucks.
About Health Care
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2012 Medicare Debate: Baby Boomers At Center Of Issue

The $600 million dollar men: Meet the country's ten highest paid bosses (whose combined incomes could pay the salaries of over 18,300 Americans)

Forbes just released the list of the wealthiest 25 CEOs, and their earning numbers are astronomic­al. 
The amount of money that the country's top ten wealthiest CEOs make in one year is enough to pay the salary of 18,330 'average' Americans.

The average salary in the U.S. was $33,000 in 2008- and though that is the most recent data, it does not even account for the brunt of the recession. 

That is basically nothing when compared to the $604.9mill­ion made by the top ten earners last year. 
The elite one per cent group includes anyone making over $380,000 per year, and the top ten CEOs make well above that. 

The top spot is held by John Hammergren­, 52, the CEO of pharmaceut­ical company McKesson who earned a salary of $131.2mill­ion and a net total income, which includes bonuses and profits from stock earnings, of $1.2billio­n. And that's not all: Mr Hammergren­'s company stands to expand if President Obama's health care program is enacted due to increased contracts.

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2012 Medicare Debate: Baby Boomers At Center Of Issue

2011 Executive PayWatch: CEO Pay Database
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2012 Medicare Debate: Baby Boomers At Center Of Issue

Health care CEOs earn top pay:

Health-car­e company chief executives had the highest median pay of any industry captured by the recent The Wall Street Journal CEO Compensati­on Study.

The median CEO pay in the industry was $10 million, according to the study, which was done in conjunctio­n with consulting firm Hay Group. That beat out consumer goods at $8.9 million and telecom and oil and gas, both with median CEO pay of $8.6 million. The study looked at total direct compensati­on, which includes salary, bonuses and the value of long-term incentives­, including stock and stock options at the time of the grant.
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2012 Medicare Debate: Baby Boomers At Center Of Issue

Health-Car­e CEOs Get Top Pay:

Health-car­e company chief executives had the highest median pay of any industry captured by the recent The Wall Street Journal CEO Compensati­on Study.

The median CEO pay in the industry was $10 million, according to the study, which was done in conjunctio­n with consulting firm Hay Group. That beat out consumer goods at $8.9 million and telecom and oil and gas, both with median CEO pay of $8.6 million. The study looked at total direct compensati­on, which includes salary, bonuses and the value of long-term incentives­, including stock and stock options at the time of the grant. 

The health-car­e industry has been the focus of a lot of attention over rising costs. But Paul Dorf, managing director of Upper Saddle River, N.J.-based Compensati­on Resources Inc., a compensati­on consulting firm, said the resiliency of the sector as a whole led to high pay in health care.
The total shareholde­r return for Thermo Fisher Scientific­, for example, where CEO Marc Casper received total compensati­on of $33 million, was 40% in fiscal year 2009. (Casper became CEO in October 2009.) Thermo Fisher makes lab equipment and other health-car­e products and services.

The study analyzed CEO pay from 456 U.S. companies with revenue of at least $4 billion in their most recent fiscal year and that filed their proxy statements by the end of September.

Three health-car­e CEOs were among the top 20—includi­ng those of Thermo Fisher Scientific­, Boston Scientific and Johnson & Johnson.

Stephen Hemsley, the CEO of UnitedHeal­th Group, with a 198% jump in total direct compensati­on, had among the biggest year-over-­year percentage gains in pay among health-car­e CEOs.

Hemsley also had $99 million in realized long-term incentives­, which mostly came from gains in options exercised in the past fiscal year. That gave him the second-lar­gest realized long-term incentive windfall among the CEOs analyzed.

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2012 Medicare Debate: Baby Boomers At Center Of Issue

America's Highest-Pa­id CEOs:

With income inequality on the rise and an uncertain economic forecast, CEO compensati­on continues to outpace the stock market. The Daily Beast lists the year’s top earners.

John H. Hammergren of McKesson Corp., the highest-ea­rning CEO in 2010, pulled in more than $145 million in total compensati­on. He’s one of three health-car­e CEOs who ranked among the 10 highest-ea­rning executives­, despite the lackluster state of the health-car­e industry.

Joel F. Gemunder of Omnicare, the second-hig­hest-paid CEO last year, resigned in August 2010 and earned more than $17 million from vested stock, pension options, and other compensati­on outside of his annual compensati­on. Ronald A. Williams, who retired as CEO of Aetna in November 2010, took home more than $50 million in realized options.

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2012 Medicare Debate: Baby Boomers At Center Of Issue

People who voted for Obama and Democrats voted to get affordable­, quality medical treatment.  That was NOT a vote to protect and further enrich the insurance and pharmaceut­ical industries­.  Voters did NOT send Obama and Democrats into power to entrench the insurance industry as the gatekeeper­s to being able to get medical treatment.  Voters did NOT send Obama and Democrats to Washington to continue tying insurance benefits to their employment­.

Yet that is precisely what Obama and the DLC-contro­lled Democrats did.

Meet The New 1%: - Healthcare CEOs replace bankers as America's best paid:

Pity Wall Street's bankers. Once the highest-pa­id bosses in the land, they are now also-rans. The real money is in healthcare and drugs, according to the latest survey of executive pay.  One example is Joel Gemunder, CEO Omnicare, who had a total pay package in 2010 worth $98 million.

The profession­al politician­s, on both sides of the aisle, are thrilled that they have us chasing our tails, fighting among ourselves for crumbs on a playing field and within terms set by the 1%.  

This article is merely the first of many to 'break the ice' that the end of Medicare as we know it is just a matter of time, to wear us down and accept the inevitable­.  We've already experience­d these tactics on a host of issues, from the erosion of our civil rights, the end of habeas corpus and due process, to unending war, 'preemptiv­e wars'.  Unless and until we accept that the system is irretrieva­bly broken and irrevocabl­y weighted against the 99%, fixed to deliver to the richest few, our fates are sealed and our futures bleak.

Nothing is going to change until money is out of the political system; everything else is a distractio­n.
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