As Cost of Health Care Skyrockets, So Does Pay of CEOs


From NPR: In the seven years since the Affordable Care Act was passed, the earnings of CEOs of U.S. health care companies, including pharmaceutical companies, hospitals, health insurers, and pharmacies, have skyrocketed. An analysis of corporate financial filings found that the top earner was John Martin, the former CEO of the pharmaceutical company Gilead Sciences, who took home nearly $900 million during this time period.

“For the longest time, health care inflation has really blown away the rate at which the rest of the economy is growing. And a big reason why is because health care executives are not paid to slow spending. Because so much of their pay comes in the form of stock, their incentive is to do whatever it takes to make that stock go up. So that means selling more drugs; raising prices above inflation; performing more procedures; getting more people into the hospital. And those are the exact opposite things that health policy experts believe would benefit the broader system: lower prices; eliminating unnecessary care and drugs; coordinating better care.”

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