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CVS/Aetna's $9 billion in profits paid for a lavish party and stock buybacks. Not patients' medical claims.
CVS/Aetna's spending included trips to Disney and a John Legend concert for employees.
A few days after executives of CVS/Aetna won a resounding thumbs up from Wall Street last week, they headed south (many undoubtedly on private jets) to Disney World for a lavish “leadership” party they threw themselves.
Thanks to videos posted on social media by some of the partiers, we know the company hired John Legend to entertain them.
John Legend doesn’t come cheap. Back in 2015, he reportedly was paid $300,000 to sing two songs at a Beverly Hills wedding. Luxury wedding planner Scarlet tells clients it will now cost them $1 million (plus travel and production costs) to snag Legend for their big events. We don’t know what his corporate rate is, but I doubt he would charge the country’s fourth largest corporation anything less than that.
Meanwhile, a few miles southwest of Orlando, friends of cancer patient Jasen Garrity are trying to raise $10,000 on GoFundMe to cover the out-of-pockets Aetna made Garrity pay before his treatment could begin. As the fundraiser’s organizer wrote:
Jay currently requires an insertion of a tracheotomy to allow him increased ability to breathe. It is difficult for him to sleep. Robin (his wife) is awake most nights worrying over Jay. To get the trach inserted Jay will need to be admitted to the hospital for 6 days and the hospital requires $2600.00 to even schedule the surgery because Aetna’s family deductible has reset.
Garrity’s story is by no means unique. While CVS CEO Karen Lynch and other executives were swag surfin’ in Florida, thousands of American patients have had to turn to GoFundMe because they can’t afford the deductibles, copays, and other out-of-pockets insurers demand they pay. In fact, 100 million Americans–most of them insured by Aetna and other big insurers–are mired in medical debt. As Kaiser Health News reported in June:
In the past five years, more than half of U.S. adults report they’ve gone into debt because of medical or dental bills…A quarter of adults with health care debt owe more than $5,000. And about 1 in 5 with any amount of debt said they don’t expect to pay it off…The burden is forcing families to cut spending on food and other essentials. Millions are being driven from their homes or into bankruptcy.
While Jasen Garrity and millions of other insured Americans with serious health issues were begging for money to stay alive last year, Lynch hauled in more than $20 million, 458 times the average pay of other CVS employees.
Also know that Aetna is spending considerably less paying patients’ medical claims as a percentage of revenues this year than last year, despite the fact that CVS collected billions more from its customers during the first six months of this year than in the same period in 2021 ($157.5 billion and $141.7 billion respectively).
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That enabled the company to report making $9.3 billion in profits during the first half of 2022, $200 million more than during the first half of 2021. This year is off to such a good start for CVS that Lynch and her fellow executives told investors last Wednesday that they believe profits will be higher this year than they previously had expected.
Wall Street loved that news. By the time the New York Stock Exchange closed Wednesday afternoon, investors had bid the company’s stock up 6%, according to CNBC.
CVS execs gave no indication they’ll use any of the extra billions to help customers like Jasen Garrity stay out of bankruptcy. They did say a few months ago, however, that they will spend up to $10 billion this year buying back shares of CVS stock, a gimmick that will increase the value of the millions of shares of CVS stock that Lynch and other company executives own.
By the way, most of the company’s revenues are now coming from the pharmacy benefit manager (PBM) it owns, not from its health plans and retail stores. During the first half of 2022, its PBM revenues totaled $82.3 billion, far more than the $45.9 billion from Aetna’s health plans and the $51.7 billion from CVS stores.
As patient advocate Beth Joyner Waldron tweeted about the company’s leadership bash in Orlando:
I encourage you to read Waldron’s thread, which along with the pics and videos she found of CVS’ partying leaders, went viral. (If you have time, you might also consider reading a piece I wrote several years ago about the lavish parties insurers throw every year–using customers’ money–to reward their top sales executives. And take a look at the thread I wrote in March about the role Karen Lynch and Cigna CEO David Cordani played in creating America’s growing out-of-pocket debt crisis.)
I also encourage John Legend to donate whatever CVS paid him to help cover the outrageously high out-of-pocket expenses millions of insured Americans are desperately trying to cover.
I doubt he knew the enormous pain and suffering Aetna’s high out-of-pocket requirements are causing for so many. And based on this Twitter thread from 2020, I believe his heart is in the right place:
He went on to say:
John Legend, the work I do now is an attempt to make amends for the years I helped big insurers make Wall Street happy and for all the leadership junkets I attended. I call on you to make amends for your ill-advised private CVS concert by supporting the important work of the Lower Out of Pockets NOW Coalition. We won’t rest until we make Aetna and the rest of Big Insurance change so their customers can stay out of bankruptcy and away from GoFundMe. You can make an enormous difference if you’ll join us.