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Boardroom Conflicts of Interest Raise Health Care Costs |
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Patrick O’Meara, corporate finance specialist in the AFL-CIO Office of Investment, describes how conflicts of interest in the boardroom affect our pocketbooks when it comes to health care.
With health care costs soaring, we would expect that a company would do everything it can to find less-expensive ways to provide good health care benefits to its workers and their families. If there is a generic drug that is essentially the same as an expensive brand drug, it makes financial sense for the company to include the generic drug in its coverage. If insurance costs include a hidden cost because a sensible universal health insurance plan has not been established, it seems only logical that the company would be an advocate of universal health insurance.
But it is hard for such common sense to prevail at many public corporations because their boardrooms are filled with directors who have very clear conflicts of interest. Many directors at the nation’s largest non-health care companies also are directors and senior executives at the large pharmaceutical and health insurance companies. What’s more, the value of their holdings in the health care companies often makes the value of their other holdings look like pocket change.
The AFL-CIO Office of Investment recently released a report that lists these significant board conflicts of interest involving the health care industry and many of the largest non-health care corporations. The report clearly shows the health care industry is well placed to influence the health care policies and practices of these companies.
We sent this report to Securities and Exchange Commission (SEC) Chairman Christopher Cox, along with a letter that describes the AFL-CIO’s concern that companies are often not pursuing the long-term interests of their shareholders because of these widespread conflicts of interest.
The letter cites an example that shows the potential consequences of these conflicts in GM’s decision to protect the drug Nexium within its formulary at the same time Percey Barnevik, retired CEO of AstraZeneca PLC, was a GM director and chairman of its board policy committee.
If you know of other instances when a company has exhibited this kind of strange behavior that makes you wonder if the health care industry is actually somehow calling the shots, please let the Office of Investment know. Drop us an e-mail at blognews@aflcio.org
5 Comments
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As long as the corporate greedy rats knaw away at our benefits, and without Congress stepping up and passing a single payer Health care plan, these animals will continue to profit. Congress needs to pass a single payer plan to eliminate the heathcare industry’s involvement so ALL can be insured.
The AFL CIO needs to endorse Rep. John Conyers’ HR 676, we need to pressure our House members to co-sponsor this bill (so far 80) and get it on the floor for a vote. Waiting for Hillary’s plan that will continue the profits for the HC industry, is bad business.
HR 676 has been endorsed by 325 union organizations in 48 states
including 89 Central Labor Councils and Area Labor Federations and 24 state AFL-CIOs (KY, PA, CT, OH, DE, ND, WA, SC, WY, VT, FL, WI, WV, SD, NC, MO, MN, ME, AR, MD-DC, TX, IA, AZ & TN).
Excellent point, TrueDemocrat. The AFL-CIO definitely needs to endorse Rep. John Conyers’ HR 676 Single-payer Universal Health Care for all Americans!
But I will add one further endorsement needed from the AFL-CIO, and that is for Dennis Kucinich for President. Since the mainstream media is prone to omit certain truths, few people realize that Rep. Kucinich CO-WROTE HR 676 with Rep. Conyers! And he is the ONLY Presidentail candidate advocating this type of health CARE for all. All of the other candidates are proposing Universal health INSURANCE! See the difference? With Hillary, Obama and Edwards you STILL PAY! With Kucinich, you do not.
I urge the leaders of the AFL-CIO to please do the right thing. Dennis Kucinich, the ONLY card-carrying Union member running for President needs your erndorsement!
Kucinich 2008
Thanks alhidalgo for the Kucinich plug.
I had mentioned the need for an endorsement for Kucinich for President in a posting weeks ago dealing with Health care. YES, he is the only card carrying member running. Isn’t that what the AFL CIO pushes, getting union members on the ballot? Kucinich’s policies make sense, they are direct but with little time to speak at these so-called “debates”, he cannot get his message and agenda out without sounding like a late night commercial car salesman trying to get as many words out in his little “air time”. With his time to speak, he does mention he co-wrote 676.
It killed me at the AFL CIO debate, he was given little time to talk about true Universal Health. Keith Olbermann practically ignored him throughout the night. Never was given a folow up question.
My “prediction” is Hillary will get the nomination, setting the Republicans for some scheme to steal the election again. (They are sure wanting her to win the nomination!) (The “swift boat” types will come lurking)
I have no problems with a woman running, we probably need it; we now have one insane, out of touch, dangerous dictator, but Hillary as she gets more political time under her belt, she is sounding like a “typical politician”. Remember she was a Republican before she met Bill Clinton. Turn coats don’t really impress me.
I support Kucinich and 676! In San Antonio we were successful in getting the Central Labor Council to endorse 676 and from there it went to the TX AFL-CIO convention. More recently the El Paso CLC, the TX Building Trades Council and the Corpus Christi CLC have all come on board!
Didn’t Hillary serve on the board of Wal-Mart? I don’t recall her ever addressing the fact that Wal-Mart workers having either poor or no healthcare insurance, low wages and unfair treatment by the bosses!
I, too, like Kucinich, but he gets such little press and endorsements. People don’t seem to give him much credit, but I believe he is honest and genuine, and I suspect that many people just can’t believe his sincerity. But dark horse candidates can take the White House. We shall see.
However, universal health care is a must, because the current health care situation is such a scam. The wealthy corporate heads have all the influence, and dictate everything from prices to product. It is no wonder that the people who control the situation, including the current Republican administration, do want want this to change. They make the money. The premiums for health care insurance, as well as auto insurance, homeowners, life and disability have skyrocketed out of control, and many people cannot afford to pay for all of them at the same time. This is what happens when insurances of any kind are capitalistic bureaucratic enterprises that have nothing whatsoever to do with protecting the people they were set up to protect. I believe it’s all going to crash.