Newspaper article THE JOURNAL RECORD

HMO CEOs among Most Highly Paid

Newspaper article THE JOURNAL RECORD

HMO CEOs among Most Highly Paid

Article excerpt

WASHINGTON -- Chief executives of the largest U.S. health- maintenance organizations are among the most highly paid CEOs in the country, when their compensation is judged relative to company size and stock performance, a new survey says.

The Crystal Report on Executive Compensation established a series of benchmarks for CEO pay after looking at the pay packages of 1,568 CEOs in 31 industries. The study found that the pay of some HMO executives was two to three times benchmark figures established by a statistical analysis of CEO pay, said Graef "Bud" Crystal, editor of the newsletter.

Such data could give congressional Democrats ammunition in their battle to pass legislation giving consumers greater control over health coverage decisions. Managed-care companies including United HealthCare, Cigna Corp., Foundation Health Systems and PacifiCare Health Systems successfully lobbied to defeat such legislation last year in a vote before the House of Representatives that lost by just five votes. "This reinforces a public perception of greed" among managed-care companies, said Ron Pollack, executive director of Families USA, a consumer advocacy group that supports passage of such legislation. "When these HMOs and insurance companies oppose bill-of-rights legislation, they are doing it for economic reasons, not the best interests of consumers." Richard Smith, vice president for policy at the American Association of Health Plans, said the two issues are unrelated. "We don't think that what a health plan executive is paid is a central question," said Smith, whose association is the largest trade group representing American HMOs. "We take positions on legislation based on how they affect our ability to deliver affordable, quality product to consumers," he said. "We're concerned that proposals to date would turn back the clock, leading to higher costs and lower quality. …

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