Healthcare is a Cash Cow & U.S. Corporations Are Getting Better at Fleecing the Public
I was looking at an AFL-CIO list of CEOs and their 2020 compensation – ranked from highest to lowest. The $6 million to $20 million compensation packages for CEOs of nursing home corporations during 2020 – the year of COVID – had sort of blown my mind. But nothing shocked me like the $199+ million 2020 compensation package awarded to the CEO of 1Life Healthcare, a rather new company.
It is difficult to understand what 1Life does and why its needed in the healthcare system. The company claims that it derives “net revenue from multiple stakeholders, including consumers, employers, and health networks.” Apparently, it charges a per member fee for consulting services and care provided through its clinics and telehealth system. The description of the company’s business model in its 10-K report to the SEC is a jumble of jargon and alphabet soup labels.
This definition will not do justice to the business 1Life is in, but I will be elaborating on it in future posts: the company is a layer of medical services between physicians groups, employers, and health networks for the purpose of increasing efficiency and effectiveness of publicly funded programs (I consider employer provided health insurance a publicly funded program because the government spends at least $200 billion per year in providing tax write downs for employers and employees). Like so many other services such as pharmacy benefit managers, nursing home referral services, and managed care organizations (see Centene Corporation below), this company will add excess costs, waste, and inefficiency to the U.S. healthcare system but do nothing to improve the overall health of Americans.
Have you heard of Centene Corporation? This St. Louis company rose from 48th to 24th on the Fortune 500 in 2020. With revenues of $111 billion in 2020, it paid it’s CEO $24 million last year. What does Centene do? It derives its revenue from Medicaid by managing Medicaid programs for various states. It is known as an MCO – another unnecessary layer of complexity in the healthcare system and an inefficient, wasteful rip off. I will be following this company along with others in the years ahead.