Friday, May 22, 2009

Uwe, Uwe! ESHI Gotta Go!

Princeton economist Uwe Reinhardt has a piece on employer sponsored health insurance (ESHI) in the New York Times. It ends with:

"If success in this regard serves to shrink the traditional employment-based insurance system, so be it.”

It’s not the outcome, it’s the plan. The race continues to the lowest global common denominator on worker pay/benefits. Employers want to dump the employment-based insurance system. Uwe provides a nice cover in his piece.

As for Uwe, I hope he declared his conflicts of interests. He sits on a number of for-profit health care boards and owns huge chunks of stock, including options.

He just got options for 6,230 shares of AmeriGroup stock, a health insurer. They become exercisable in 2010 and last through 2016. Uwe also holds 144,558 AmeriGroup shares, 134,856 of which are options. Dr. Reinhardt has a strong incentive to see AmeriGroup's stock price grow. It would help if Obama’s "public plan" is really a public-private hybrid. AmeriGroup excels at that. Dr. Reinhardt's Board pay from AmeriGroup in 2008 was $226,531.

Uwe made $2.3 million off the sale of Triad Hospitals and has a big chunk of stock in Boston Scientific (63,625 shares of BSX). Reinhardt's 2008 Boston Scientific Board compensation was $241,740. White House Health Czar Nancy Ann DeParle sat on the Triad and BSX boards with Uwe. However, the health economist sits on other boards, even a private equity underwriter (PEU):

Dr. Reinhardt is a Trustee of the H&Q Healthcare Investors, H&Q Life Sciences Investors and Hambrecht & Quist Capital Management LLC. He is a member of the boards of directors of Amerigroup Corporation and Legacy Hospital Partners, Inc.

Nancy Ann DeParle was a PEU and sat on the Legacy Hospital Partner board, founded by ex-Triad CEO Denny Shelton. Funny, the Obama/Summers/Orzag/Emanuel lingo on health reform sounds alot like Denny circa 2007.

A little bit louder now! Hey, hey, hey hey! Uwe, Uwe! ESHI gotta go!