I suspect less goes to executives than you think. Most of it is going to pay employees in the insurance industry.
The irony is that they are being paid to say "no." Perhaps if they instead went to work as service providers, we could get more services for what we spend.
Keep in mind this is just for Blue Shield California. There are executives of other health insurance systems in other states and regions who are making similar compensation.
However, I'll go ahead and say right now that I support the idea of these executives being paid these salaries, but on one condition: that we first achieve the goal of 100% of Americans having affordable access to healthcare. Once that goal is achieved, then we can start paying executives big bonuses and incentives. Deal? (Yeah, right...)
https://www.blueshieldca.com/content/dam/bsca/en/member/docs...
Below is a summary of the compensation paid in 2024 to Blue Shield of California’s President and Chief Executive Officer (CEO), Chief Financial Officer (CFO), and top three highest paid executives (other than the CEO and CFO) who were employed by Blue Shield of California at year-end.
Paul Markovich
President and Chief Executive Officer
$11,191,674
Sandra Clarke
EVP, Chief Operating Officer
$5,765,368
Peter Long
EVP, Strategy and Health Solutions
$4,360,245
Lisa Davis
EVP, Chief Information Officer
$2,873,613
Michael Stuart
EVP, Chief Financial Officer
$2,406,837
Some other CEOs:
Cerner (EMR provider to the VA), $35 million pay package: https://kffhealthnews.org/morning-breakout/cerner-to-pay-new...
Pfizer, $24.6M pay package: https://www.fiercepharma.com/pharma/rebound-year-pfizer-ceo-...
Epic Systems is a private company, so there's no executive pay information, but the founder Judy Falkner's estimated net worth is $7.8 billion. Perhaps Epic could reduce the price of its very expensive software for providers to help ease healthcare costs and maybe Judy could give up some of those billions and not notice any difference in her quality of life?
You may view those salaries as appropriate for leading companies of this size or immoral and outrageous. But either way executive comp is not the big problem with US healthcare costs.
For one thing, cutting out even that tiny 0.1%, that's a savings of $15 a year if I wasn't paying my insurance company's CEO. I would absolutely love to keep that $15. The idea that more than one dollar every single month from every single person is going to the CEOs of all our healthcare services is actually INSANE when you think about it.
0.1% is actually a LOW amount for some entities in the system. For example, the Cleveland Clinic spends 0.4% of revenue on executive compensation: https://projects.propublica.org/nonprofits/organizations/340...
That really means that out of my $14,570 yearly healthcare cost I could be paying something like $5/month just on executive salary. Who knows, maybe it's even more!
This is, again, insane. Why do Cleveland Clinic executives need to be paid $30 million/year?
This isn't administrative cost, like all the hard-working people who do the clerical work that keeps these systems operating. This is just the salaries of an extremely small group of people, less than 10 people per company.
All of these entities are allowed to make excess profit and/or have loose definitions of non-profit status, and pay CEOs dozens to hundreds of times the salary of their lowest paid employees. There isn't really a limit to the amount they can compensate top executives.
So they can hire bodyguards?
It isn't even a secret that these positions are largely based on networking and inter-company politics, not their skills or productivity or often even any real merit. Maybe a couple bucks isn't much to you, but it is to other people. And we haven't even gotten into all the non-cash extras that are often a huge bonus on top of their actual salary. How many more doctors is 25 million dollars could that be providing? How many lives saved?
If we figure that every company involved in your $15k/year healthcare cost is paying 0.1-0.5% of their revenue to executive compensation (Cleveland Clinic as a random example pays 0.4% of revenue to the executives, $30 million) then we are talking about a small streaming video subscription worth of cost just which is allocated not on paying a productive group of administrators to keep the lights on, but instead paying excess incentives to an extremely small group of people.
In reality, if CEO compensation was capped to something reasonable like $500,000/year or 10x the pay of the lowest paid employee, there would still be CEOs and the quality of CEOs would not decline because it would still be the highest paid job on the market. Everyone involved in our economy would be just that much richer if the wealth wasn't getting unnecessarily concentrated.
And that's an argument you can certainly have, but it seems strange to make it a precondition to fixing the healthcare system, when cutting executive pay would resolve only a small fraction of the problem.
Maybe this idea is sacrilege to the hyper-capitalist brain but it is entirely reasonable to limit personal salary and assets because income inequality has known and proven negative impacts on society.
No one person should make a salary greater than ~$1 million/year nor should they be able to control more than ~$100 million in assets. Prove me wrong on that concept. What possible reason could an individual have to require such excessive wealth?
As far as your second paragraph, your argument is that we can’t fix one piece of a multi-faceted problem without fixing the other pieces, which is logically weak. Paying executives less would make non-zero progress toward cost reduction.
Uh, Blue Shield of California is a nonprofit mutual benefit corporation. There are no "unrealized capital gains."
50% of the executive incentive is based on membership targets and operating income.
Blue shield discloses that their CEO pay is about 70x their median employee. This is less than the for-profit organizations’ 250x ratio but that only serves to distort the spectrum of ethics.
We can call these organizations non-profits all day long because they fit our secular corporate law definitions but I’m not sure how a company that pays an employee enough money to own multiple homes with a Ferrari parked at each one would be considered non-profit in the eyes of God. [1]
[1] Not claiming the dude exists but you get the point I am making here.
The original poster proposed "49 cents per million dollars of unrealized capital gains per month" which is invalid not "on paper" but in reality.
1. They do actual, necessary work, and represent a relatively large and reasonably paid workforce (not grossly overpaid like executvies)
2. They fall under a different budget bucket than executive compensation entirely.
Their salaries don’t scale because they’re grossly overpaid. The fact that ~10 people in an organization get paid enough to be a separate line item in a company of 6,500 employees is insane.
The executive compensation at Blue Shield of California could employ approximately 300 nurses.
The gossip part isn't the facts of the matter, it's the deciding how much a business should pay its executives.
Their salaries don't scale because there's only one of each of them. It's nothing to do with them being overpaid. Overpaid isn't an objective word. It's just gossipy nonsense.
> The executive compensation at Blue Shield of California could employ approximately 300 nurses.
I doubt it. Think of all the overhead.
Getting paid $10-30 million a year doesn’t become reasonable just because someone else is making $100 million or $1 billion per year.
That’s like saying I’m not overweight compared to someone who weighs 600 pounds. Doesn’t change the fact that I’m overweight.
"Top healthcare companies spend 95% of profits on shareholders, study finds"
ref: https://www.healthcare-brew.com/stories/2025/02/21/top-healt...
Executives and shareholders are effectively one organism, with execs serving the function of disrupting the host for optimal extraction.
I think about the fact that everyone in the hospital gets a private room a lot. Having a private room does not increase health outcomes at all, but it costs an absolute ton of money. It does increase satisfaction so it should be available, but hospital users should be able to choose shared rooms and get a portion of the savings they create but this just isnt possible in the US because of the incentives we've created.
How can it be less than nothing? The graph is literally showing that all the entities that are not care facilities operate without any costs and without any profits. Apparently both CEO’s and workers at these organizations are volunteers.
Vertical integration.
UnitedHealthcare's (Larger insurance company in the US) profits are effectively limited by the Medical Loss Ratio rules from the Affordable Care Act.
But they are owned by UnitedHealth Group, which also owns OptumHealth (the largest network of physicians in the US), OptumRx (pharmacies), and OptumInsight (technology consulting, which goes into the COGS for UnitedHealthcare). This is where they make their profits.
UHG controls which physicians + pharmacies are in their network and what their negotiated rates for many services are (the exception being medicare + medicaid).
Here's a write up on their strategy: https://www.unionhealthcareinsight.com/post/unitedhealth-gro...
And an infographic that breaks it down: https://static.wixstatic.com/media/be1b8b_b0d4ebb04ce04b44a3...
They are a racket.
edit: and the insurance companies
they kinda have it on chart but without overhead numbers: insurance collects 1T of payments, than for business segments, they pay around 60% of that as medical expenses, and for individual plans it is more like 40% of medical expenses, meaning for individual plans insurance corps have 60% profit margin.