Make corporate executives sensitive to their own health carecosts?
The Wall Street Journal
November 28, 2006
Letters
Should Corporate Chiefs Get Lifetime Health Care?
In your Nov. 20 editorial “AHIP Hop” on the health-insurance proposal recently unveiled by America’s Health Insurance Plans (AHIP), you lament the fact that “individuals generally aren’t sensitive to the price of their treatment decisions.” For that reason, you have long supported high-deductible health insurance that puts patients’ “skin in the game,” to use the colorful metaphor for “high deductibles.”
Economists, who generally believe that fiscal incentives drive human behavior, can resonate with this prescription, but as one such I would ask: What does it tell us about the health-insurance coverage of highly paid corporate executives? Does it not imply that these executives should never have the corporation buy health insurance of any sort for them, lest these executives become too insensitive to the cost of their health care?
Instead, we find that corporate executives routinely insist that their companies purchase for them and their spouses generous health insurance for life, and many of them even insist that the company cover all out-of-pocket expenses built into such policies.
Is that at all defensible on the “skin in the game” theory you espouse?
Uwe E. Reinhardt
Professor of Political Economy
Princeton University
Princeton, N.J.
http://online.wsj.com/public/us
Comment:
By Don McCanne, MD
Corporate executives, of course, are sensitive to health care costs - of their employees. But the question they should be asking themselves is, “Should we be controlling health care spending by making beneficial services for our employees unaffordable, or should we act like the businessmen we are and support structural reform of health care financing that would make the comprehensive health benefits that we receive affordable for everyone?”
Corporate executives are businessmen, aren’t they?