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The CEOs of 70 of the largest U.S. health care companies cumulatively have earned $9.8 billion in the seven years since the Affordable Care Act was passed, and their earnings have grown faster than most Americans' during that time, according to an Axios analysis of federal financial documents.

Why it matters: The ACA has not hurt the health care industry. Stock prices have boomed, and CEOs took home nearly 11% more money on average every year since 2010 — far outstripping the wage growth of nearly all Americans. But the analysis also reveals that the pay packages for the country's influential health care executives don't give them incentives to control health care spending — something that economists, policymakers and even Warren Buffett have said is the most pressing problem in health care.

Expand chart
Data: Analysis of company filings; Chart: Lazaro Gamio, Naema Ahmed / Axios

What we found: Total earnings amount to an average of $20 million (median of $11 million) per CEO per year. A vast majority of pay came in the form of vested stock.

The largest haul: John Martin, former CEO of the pharmaceutical company Gilead Sciences, made $863 million in the ACA era — the most of any health care CEO.

The big takeaway: Health care inflation continues to blow away general economic inflation, and a big reason why is because health care executives are not paid to slow spending.

What the analysis covers: The total CEO compensation (salary, bonuses, stock, perks and retirement/severance when relevant) each year since 2010, when the ACA went into effect, based on company filings with the Securities and Exchange Commission.

These 70 corporations were chosen because they are based in the United States and are among the largest publicly traded health care companies, together encompassing more than $2 trillion of annual revenue. It did not include the generous pay packages of not-for-profit hospital CEOs.

Our unique tabulation: We calculated the actual realized gains of CEOs' stock options and awards (money that they had to pay taxes on), not the estimated fair value of their stock shown in the federal filings' summary compensation tables.

  • The estimated value of stock is misleading and does not accurately depict how much a person made in a given year.
  • Actual realized gains show that CEOs are making a lot more than headlines suggest.

William Lazonick, an economist at the University of Massachusetts Lowell, and Matthew Hopkins, a senior researcher at the nonprofit Academic-Industry Research Network, reviewed the analysis for accuracy. They have written extensively about corporate executive compensation and why actual realized stock gains matter.

"What is the relationship between their high pay and the role of stock prices in their high pay and the problems of the health care system?" Lazonick said. "There is a very close relationship, but it's not apparent to most people."

The stock story: A gigantic portion of what CEOs make comes in the form of vested stock, and those incentives drive their decision-making. The analysis shows that since the ACA was passed, health care executives routinely took measures to inflate stock prices — such as repurchasing shares or issuing dividends to shareholders — that led to higher take-home pay.

Stock-heavy pay also drives CEOs to do the exact opposite of their buzzword-laden goals of creating a "patient-centered" health system that focuses on "value."

Actions that would benefit the broader health care system:

  • Lower prices
  • Eliminate unnecessary procedures, tests or devices
  • Coordinate care

Instead, CEOs often focus on what benefits the stock price:

  • Sell more prescription drugs
  • Perform more procedures and tests
  • Create new medical therapies that may not add value to someone's life
  • Raise prices above inflation
  • Do anything to create higher earnings per share

Here are the other main takeaways from the analysis:

  • Of the 113 health care CEOs in the analysis, only four were women. Two women (Heather Bresch of Mylan and Debra Cafaro of Ventas) still lead their companies.
  • Executives made slightly less as a group in 2016 than they did in 2015 because the presidential election dangled like an ax over the stock market.
  • The richest year was 2015, when 70 health care CEOs collectively made $2 billion. That was an average of about $28.5 million per CEO and a median of about $17.3 million per CEO. The median household income in 2015 was $56,515, which the average health care CEO made in less than a day.
  • Pharmaceutical and drug-related company CEOs made up 11 of the top 20 highest earners.
  • Gilead's Martin made the most since the ACA became law. Several other executives — including John Hammergren of McKesson ($587 million), Leonard Schleifer of Regeneron Pharmaceuticals ($338 million) and Stephen Hemsley of UnitedHealth Group ($279 million) — each took home more than a quarter-billion dollars on their own.
  • A handful of lesser-known health care CEOs were among the highest earners. For example, Michael Mussallem of the medical device company Edwards Lifesciences collected $246 million since the ACA went into effect. Last year, for every dollar Mussallem's company brought in as revenue, two cents went toward his pay.
  • The analysis still underestimates how much wealth health care CEOs have. It did not include vested stock after CEOs retired, nor did it include the value of stock CEOs still hold. For example, Walgreens CEO Stefano Pessina owns more than 13% of Walgreens, which equaled about $12 billion as of June 2017.

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