The lowest-paid of these top five, UnitedHealth Group’s Andrew Witty, had to make do with a mere $20.9 million, a reward 331 times greater than the pay that went to UnitedHealth’s most typical employees.
Top execs in the “insurtech” side of the health care industry — firms that claim to be using high tech to make health insurance more efficient — seem to have an even greater compensation upside. Alignment Healthcare’s John Kao took home $34.1 million in 2022 after a $46-million payday in 2021. Bright Health’s George Mikan two years ago took in $180 million.
The chief execs of U.S.-based health care companies clearly have all the incentive they could possibly need to deliver outstanding performances. The quality of health care in the United States — by the reasoning of the defense team for sky-high U.S. CEO pay — should be unparalleled worldwide.
Especially compared to Canada.
Our neighbor to the north has not a single mega-million health care exec. The reason? Right after World War II, in the province of Saskatchewan, Canadians started setting up a tax-funded nonprofit health care system that guarantees free universal health services. By the early 1960s, all Canada’s provinces and territories had joined in on the effort.
The top executives in Canada’s health care system today make a fraction of the compensation that goes to health care execs in the United States. In 2021, the CEO of Ontario Health “raked in” just $826,000. The top health exec in the province of Alberta that same year collected a mere $583,443.
Canadians, according to the rationale of apologists for U.S. CEO pay, ought to be paying dearly for the low pay that goes to the execs who run Canada’s health care system. People in the United States, by the apologist logic, ought to be enjoying far better health care and health than people in Canada. In fact, the reverse has become the case, as analysts have been documenting for years.
By 2010, as a Population Health Metrics research journal analysis detailed just over a dozen years ago, a healthy 19-year-old Canadian could “expect to have 52 more years of perfect health versus 49.3 more years for Americans.”
Compared to Canadians, a PBS report would observe in 2020, “Americans have for years paid far more for health care while staying sicker and dying sooner.”
Other still more recent research has placed Canadian and U.S. health outcomes in a more global context. In 2021, the Commonwealth Fund in New York compared the performance of health care systems in 11 high-income countries around the world: Australia, Canada, France, Germany, the Netherlands, New Zealand, Norway, Sweden, Switzerland, the UK, and the United States.
“The United States ranks last overall,” the Commonwealth Fund data analysts point out, “despite spending far more of its gross domestic product on health care.”
U.S. performance on metrics that measure everything from access to health care to health outcomes, declare the Commonwealth Fund researchers , “falls well below the average of the other countries and far below the two countries ranked directly above it.”
The United States, the Commonwealth Fund added this past January, also “has the lowest life expectancy at birth” and “the highest death rates for avoidable or treatable conditions.”
Two leading research centers, The Peterson Center on Healthcare and KFF, piled on with still more unnerving health care data this past October.
Back in 1980, the Peterson-KFF Health System Tracker illustrates, life expectancy at birth showed no major differences between the United States and comparable advanced industrialized nations. But the global life-expectancy gap “has grown substantially in the following decades,” with Americans in 2021 averaging just 76.4 years in life expectancy and its peer countries averaging 82.3.
What’s going on here? How can the United States be spending so much on health care and seeing so little in return? Where does America’s health care CEO pay fit in to all this?
We’ve had no shortage of culprits when it comes to explaining how unhealthy the United States has become. Many observers point to poor diets, for instance, or the lack of adequate exercise.
But analysts like Stephen Bezruchka, a population health professor emeritus at the University of Washington, are urging us to look deeper into how our American society has evolved since the middle of the 20th century. We have over those years, they note, become a much less equal nation. Our richest are making much more — as the CEO pay data confirm — and paying a much smaller share of their hefty incomes in taxes.
“Healthier societies have a smaller gap between the rich and the poor than we do,” notes Dr. Bezruchka. “That gap causes an enormous amount of stress in our society — road rage, air rage, stress at work, child abuse.”
Dr. Bezruchka has come to call stress “the 21st century tobacco.”
“We have learned,” he warns, “that inequality kills.”
CEO compensation in the United States has contributed mightily to that inequality. Top execs don’t just collect big paychecks. To make sure they can end up collecting those paychecks, American CEOs regularly make corporate decisions that boost corporate profits at the expense of their employees and the public at large. Their fortunes also bankroll the politicos who oppose high taxes on high incomes — and the programs to help modest-income families those high taxes could be underwriting.
Curbing excessive CEO pay clearly won’t solve all the problems that face us. But curbing that excess would certainly make for a wonderfully substantive start.
