EXECUTIVE COMPENSATION: Families USA Ranks Top HMOs
A report released this morning by Families USA shows that top executives at the nation's top 20 for-profit HMOs "made many millions of dollars in 1996." Premium Pay: Corporate Compensation in America's HMOs shows that former Oxford Health Plans CEO Stephen Wiggins was the highest paid HMO executive that year, earning $29.1 million in compensation and $82.8 million in unexercised stock options. According to the report, the 25 highest-paid HMO executives among these companies had an average compensation, exclusive of unexercised stock options of more than $6.2 million, with the median compensation at more than $4.8 million.
And The Winners Are ...
Families USA found that the companies with the highest average compensation per top executive were: Oxford Health Plans ($11.7 million), Aetna ($5.7 million), CIGNA ($5.1 million), WellPoint Health Networks ($3.3 million) and Foundation Health ($2.3 million). The HMOs with the highest average unexercised stock options per top executive were Oxford ($29.5 million), United HealthCare ($11.2 million), CIGNA ($6.9 million), PacifiCare Health Systems ($5.5 million) and Aetna ($4.8 million). According to the report, executive compensation (top five executives only) per enrollee amounted to $40.30 at Oxford, $11.11 at CIGNA, $7.06 at Aetna, $5.17 at Maxicare Health Plans and $4.94 at Humana (release, 4/1).
Wiggins Wins Again
Today's New York Times reports that Stephen Wiggins will receive a $9 million severance package from Oxford. The package includes "a cash payment of $3.6 million and annual payments of $1.8 million for three years in return for various consulting services" (Abelson, 4/1).
Patients' Rights Now!
Noting the compensation figures for leading HMOs, Families USA criticized the managed care industry for opposing patients' rights legislation. Ron Pollack, Executive Director of Families USA, said, "When HMO executives make many millions of dollars in compensation, that may be okay. But when those same HMO executives complain about pennies being spent for basic consumer rights, that is pure hypocrisy." Pollack also said, "The per-enrollee costs of a consumer right to appeal and many other basic protections are a fraction of the per-enrollee income made by top HMO executives. If the HMO and insurance industry truly cares about improving health care for America's families, it should shift some of the money spent on executive compensation to improve consumer protection and coverage" (release, 4/1).