Attack of the zombie directors (or: "Whatevah. I do what I want!")
April 12, 2013 11:53 AM   Subscribe

When Shareholder Democracy Is Sham Democracy: Directors in 41 publicly traded companies remained in their posts despite "resounding votes of no confidence" from their shareholders, prompting New York City’s comptroller, John Liu to observe that the right to elect directors, "one of the few rights afforded shareholders is illusory," and “Shareowners need accountable directors who will ensure the company isn’t being run for the benefit of insiders at our expense.” Meanwhile, studies seem to back Liu up: "...firms with stronger governance exhibit a higher propensity to pay dividends and, for dividend payers, pay larger dividends."

The conventional wisdom in recent years can perhaps best be summed up, "Historically, there has been little debate about whom U.S. public companies and their boards serve. The unequivocal answer has always been: their shareholders." Or maybe not. On the other hand, "The idea that a corporation's sole duty is to stockholders is a dangerous fad with no basis in U.S. law or history."
posted by saulgoodman (43 comments total) 28 users marked this as a favorite
 
We have these findings, and we also have the fact that there is a negative correlation between executive salaries and stockholder compensation - from those wild-eyed radicals in the Wall Street Journal.

Rather than editorialize, I'll just leave it at that...
posted by lupus_yonderboy at 12:01 PM on April 12, 2013 [15 favorites]


Nothing will change as long as people are content to let their mutual fund managers outsource their corporate governance work.

Just look at the shitshow surrounding the proposal to split the Chairmanship and CEO roles at JP Morgan. And that's considered bare minimum governance everywhere in the developed world ex-the US. I don't think you could even list on the LSE without a split.

Also the CEO should not be on the nominating committee and the definition of "Independent" needs to be tightened.

That said - Cablevision is a bad example. The Dolans have the right to appoint 75% of the board despite only having a 25% economic interest via a super voting class of shares. In other words, you should have known they were going to ignore you if you bought the regular shares.
posted by JPD at 12:15 PM on April 12, 2013 [5 favorites]


From the first link:
At Iris International, a medical diagnostics company based in Chatsworth, Calif., shareholders rejected all nine directors in May 2011. In keeping with the company’s policy, they submitted their resignations. And then they voted not to accept them. The nine stayed on the board. (The company was acquired in late 2012 by the Danaher Corporation.)
That's class, right there. I guess being the one responsible for reviewing your own termination is good work if you can get it.
posted by Holy Zarquon's Singing Fish at 12:17 PM on April 12, 2013 [8 favorites]


The whole idea of "celebrity CEOs" and that anyone is worth paying the huge sums they make is completely at odds with reality; it's stealing money from the company. The job is undoubtedly demanding, but many, many of the big-dollar CEOs demonstrate they're no better at it than a TRS-80 which returns a random answer to your multiple-choice question.

The whole "the company only has a duty to their shareholders" is a huge crock of shit, both from a philosophical viewpoint, and because the barmy idea is further twisted to (a) remove culpability from individuals within the company doing unethical or illegal things and (b) be used as an enforcement mechanism to silence opposition to any policy the executive staff and board come up with.
posted by maxwelton at 12:20 PM on April 12, 2013 [9 favorites]


I'm surprised that shareholders can legally be outright ignored, but there it is.

Even if shareholder voting wasn't a sham, why would we call it a democracy? Owning more shares means having more votes. That's an oligarchy.
posted by justsomebodythatyouusedtoknow at 12:27 PM on April 12, 2013 [2 favorites]


Aren't these more "tyrant directors" than "zombie directors"? I get that zombies are the fun horror monster of the day, but it's a bit soft on those directors. They're not reanimated after death, brought back from the grave by some mysterious forces. They're tyrants, who refuse to follow the laws of their corporation. There's no need to refer to mythical creatures when there are better analogies to real-world monsters.
posted by filthy light thief at 12:28 PM on April 12, 2013 [7 favorites]


"Zombie" in that you kill (well, fire) them and they just keep trying to eat your brains.
posted by Holy Zarquon's Singing Fish at 12:33 PM on April 12, 2013 [1 favorite]


actually the board of a company really does legally have a fiduciary responsibility only to shareholders. The way that article is titled is misleading though. What the misconception lies is that fiduciary responsibility to shareholders /=/ profit maximization.

Chancery courts have found that under certain situations there is a requirement to maximize profit, but thats really about selling the entire company and having competing bids.

In some countries outside of the US that fiduciary responsibility is extended beyond the shareholders to labor as well, and in those countries there are usually labor representatives on the board, although they are <50% of the directors, so the capitalists still control the board.
posted by JPD at 12:33 PM on April 12, 2013 [1 favorite]


I had this argument with my corporations professor. He said that the US's barely-there laws on things like minimum capitalization and corporate governance were proven wise by the success of American corporations. I said that companies here succeeded in spite of those flaws, and that recent scandals proved that once a board found a way to milk the company for its own benefit it would do so, damn anyone else with an interest in keeping the enterprise as a going concern. I guess I was right, but it's hard to celebrate considering the consequences for real people who actually work for a living.

The CEO and director class must be disposed of. When I get shareholder ballots I see that the nominated directors are always cut from the same rotten cloth, went to the same tiny set of rotten schools, and all serve in an incestuous web of other boards. Nuts to the lot of them.

There's a possible way out of this. Other states can change their conflicts laws to ignore the formal jurisdiction of incorporation if the enterprise in question has no links to that state. Delaware is a pissant little place that's been screwing over the entire rest of the country to collect its little fees. Screw 'em. Let them charge sales tax like most other states do instead.
posted by 1adam12 at 12:36 PM on April 12, 2013 [8 favorites]


Delaware actually has better and fairer rules than other major incorporation venues in the US.

Places like Indiana for example allow a board to rob people blind.
posted by JPD at 12:40 PM on April 12, 2013


The CEO and director class must be disposed of. When I get shareholder ballots I see that the nominated directors are always cut from the same rotten cloth, went to the same tiny set of rotten schools, and all serve in an incestuous web of other boards. Nuts to the lot of them.

I assure you this is a global phenomenon.
posted by JPD at 12:41 PM on April 12, 2013 [1 favorite]


“Shareowners need accountable directors who will ensure the company isn’t being run for the benefit of insiders at our expense.”

I'm surprised that shareholders can legally be outright ignored, but there it is.


The means by which directors are selected--and removed--is a function of corporate bylaws. Those can say basically whatever. One size does not fit all, because no two corporations are the same. GE is not the same as Citigroup is not the same as the family-owned hardware store down the block, and there's no reason to expect that their corporate governance should operate in the same way.

The problem here is that the normal solution for dealing with unsatisfactory directors--removal by shareholders--doesn't seem to be working, probably as a function of corporate bylaws. The solution? But this is a problem with a built-in solution: investors can invest their money elsewhere. Shareholders are supposed to take things like their ability to reign in wayward directors and executives into account when they make their investment decisions. A corporation with bylaws that make it difficult to remove directors ought to be required to provide more in the way of returns for investors to make up for that downside structural risk. If they don't, investors can go elsewhere. Problem solved.

Delaware is a pissant little place that's been screwing over the entire rest of the country to collect its little fees.

Uh, the hell now? Delaware has the single most sophisticated corporate legal system in the country, and everybody knows it. The reason companies incorporate there isn't to avoid local fees--which really are pissant amounts in most cases--but to take advantage of the strong Delaware corporate statutes and the Court of Chancery. And as to this drivel. . .

Other states can change their conflicts laws to ignore the formal jurisdiction of incorporation if the enterprise in question has no links to that state.

No, they can't. And I quote: "Full faith and credit shall be given in each state to the public acts, records, and judicial proceedings of every other state." U.S. Const., Art. IV, Sec. 1, cl. 1.
posted by valkyryn at 12:49 PM on April 12, 2013 [3 favorites]


The whole idea of "celebrity CEOs" and that anyone is worth paying the huge sums they make is completely at odds with reality; it's stealing money from the company.

I'll give you one exception. Steve Jobs.

Look at the value of Apple Inc. before he became the interim CEO (later, permanent CEO) and the value of Apple Inc. when he left the position.

In most cases, you are correct. But there are times when a CEO can, in fact, earn a multi-million dollar salary, and taking a company that was losing money hand over fist and had negligible market share into an enormously profitable market leader is one of the rare cases where the CEO who pulled that off deserves the money.

Just look at the shitshow surrounding the proposal to split the Chairmanship and CEO roles at JP Morgan.

Note that the usual check-and-balance in the US is not the CEO vs. Chairman of the Board, which is why in many cases these are the same people. The check-and-balance is supposed to be the CFO vs. the CEO.

Not that this always works, of course.
posted by eriko at 12:50 PM on April 12, 2013


Note that the usual check-and-balance in the US is not the CEO vs. Chairman of the Board, which is why in many cases these are the same people. The check-and-balance is supposed to be the CFO vs. the CEO.

Not that this always works, of course.


Uh - no sir. This is not correct. Not even remotely close to it.
posted by JPD at 12:53 PM on April 12, 2013 [1 favorite]


Ah, regulatory arbitrage... Of course Delaware just objectively has the best corporate legal structure. Just as the Caymen Islands have the best tax regs. Of course that's it. Good times.
posted by saulgoodman at 12:57 PM on April 12, 2013




prompting New York City’s comptroller, John Liu to observe that the right to elect directors, "one of the few rights afforded shareholders is illusory,"

If anyone knows about attempts to undermine the electoral process, it's John Liu.
posted by Inspector.Gadget at 12:58 PM on April 12, 2013 [1 favorite]


Ah, regulatory arbitrage... Of course Delaware just objectively has the best corporate legal structure. Just as the Caymen Islands have the best tax regs. Of course that's it. Good times.

It is not remotely the same argument. Delaware has laws that are actually much more fairly balanced between the Shareholders and the Board than in pretty much every other state that attempts to appeal as a place of incorporation.

I'm not attempting to defend the tax advantages of incorporating in Delaware, but from an investors prospective you would much rather have Delaware than most of the other options.
posted by JPD at 1:02 PM on April 12, 2013


Maybe you're right, JPD. I'm not an expert on the subject, to be sure, but as an investor I might not like this:

State law controls board governance, and Delaware has long tolerated plurality voting. The Delaware Supreme Court has also affirmed the power of boards to reject the resignations of directors who fail to gain a majority of votes.
posted by saulgoodman at 1:05 PM on April 12, 2013


Im not saying its perfect at all. I dislike plurality voting, I dislike staggered boards, I dislike the 14.9% voting rights rule. There are plenty of things to dislike about the DE Chancery Courts decisions.
posted by JPD at 1:08 PM on April 12, 2013


It is basically impossible to proxy fight a company incorporated in some states.

The reason why the plural voting thing is an issue is because these are unopposed directors elections. If they were opposed by an independent slate than it wouldn't happen.
posted by JPD at 1:11 PM on April 12, 2013


I'm not an expert on the subject, to be sure, but as an investor I might not like this: . . . The Delaware Supreme Court has also affirmed the power of boards to reject the resignations of directors who fail to gain a majority of votes.

You find me a state with a different outcome, then we'll talk. It's not enough to say that Delaware corporate law isn't what you'd like. You also need to show that the law elsewhere is more to your liking.
posted by valkyryn at 1:14 PM on April 12, 2013


Well, forgive me for my cynicism. Either way, whether or not Delaware's laws are the best we've got seems a bit beside the point anyway.
posted by saulgoodman at 1:35 PM on April 12, 2013


You also need to show that the law elsewhere is more to your liking.

But what if one dislikes the law in every state? Must we choose the least of 50 evils?
posted by Ice Cream Socialist at 1:35 PM on April 12, 2013


> The solution? But this is a problem with a built-in solution: investors can invest their money elsewhere.

These companies are simply being looted by their management and board of directors. "The invisible hand" is simply not working here.

Your suggestion amounts to, basically, "They stole my money, guess I'll go somewhere else." The net result is that the stockholders all lose, and the management wins.

The question also arises where "elsewhere" might in fact be if this is such a ubiquitous management practice.

When it comes down to it, "the stockholders" don't get a say because the big stockholders are pension funds playing with other people's money. The fund directors end up on the board of directors, they stay invested in the firm despite poor performance while they and management divvy up the loot, and everyone's happy (except for the 99%, and they're used to suffering).
posted by lupus_yonderboy at 1:51 PM on April 12, 2013 [2 favorites]


Your suggestion amounts to, basically, "They stole my money, guess I'll go somewhere else."

More like "Check the corporate governance bylaws before you invest in a company. Failure to do that is kind of your own lookout."
posted by valkyryn at 1:58 PM on April 12, 2013 [1 favorite]


It's my understanding that a LOT of obscure corporation law has been decided in Delaware, and thus such decisions are somewhat predictable because of precedent. In many other states the courts might not have well defined precedent and therefore are unpredictable.
posted by ryanrs at 2:04 PM on April 12, 2013


Or, in other words, capitalism is great. . . for capitalists. But most of us aren't capitalists. The problem with "capitalism" as currently practiced is that the law treats and society thinks of individuals as capitalists rather than what most of us actually are: only a step or two removed from peasants.

With one gaping exception, the system as it exists does just fine by savvy investors. We'll get to that exception with a bit, but I think it's important to grant that point. In my mind, the kind of people who can afford to invest and lose millions of dollars on a throw of the dice should basically be permitted to invest their money how they choose. But those of us who really can't afford to lose our nest eggs--assuming we even have them--really shouldn't be permitted to play in that game. Stakes are too high. Casinos don't let the people playing the penny slots into the VIP room. Wall Street shouldn't let individual investors--or the people managing individual investors' money--on to the trading floor.

Of course, the gaping exception is that the system has been effectively rigged so that the people who can afford to invest and lose millions are now shielded from their losses by "too big to fail" and political incentives. Bailouts and subsidies are poison to markets. Of course, if individual investors hadn't been so badly exposed to capital markets in the form of retirement accounts and access to mortgage they never should have been able to afford, the need for bailouts would have been a lot less, so fixing one problem will do a lot to fix the other.

The main upshot of this? Retirement planners, and especially public/union pension funds, must not, under any circumstances, be permitted to count on constant, unrealistic rates of return. You want to provide retirement benefits? You pay for them, up front, by setting aside 20-30% of each employee's annual income. No other way to do it. The massive unfunded liabilities state and local governments are facing in their pension funds? We're here because legislatures, at the request of their big labor patrons, decided that we could minimally fund pensions with actual revenue because we'd see 10%+ returns on every dollar, every year, forever. I say we make that illegal. Pensions must be fully funded up front, and the money kept in CDs. Any surplus should be split between the employee and the company/government funding the plan.

Do that and you basically gut the financial sector. I'm totally okay with that.
posted by valkyryn at 2:35 PM on April 12, 2013 [9 favorites]


I was just arguing with an MBA colleague about this the past few days. (Just finished! Woohoo!)

He is very much of the "shareholder primacy" view, and goes full bottle on the idea of improving ROE as the sole measure of whether the company is well run or not. He works for a Big Consulting firm, so he's immersed in the Kool-Aid, so I can understand why.

But I cannot agree, and I've not yet heard a well reasoned argument as to why shareholder primacy is correct. However, this paper by Lynn Stout lays out very clearly that at law shareholder primacy is utter bollocks.

The argument pro-shareholder seems to boil down to a mis-reading of Jensen and Meckling's Theory of the Firm paper [pdf] by the Friedman-led Chicago school, who then extrapolated it to mean that increasing returns to shareholders is the only correct moral choice, which is appealing because it simplifies decision making. Should I do this? Well, does it have positive Net Present Value? If yes, then do it. If not, then don't.

But that's a ridiculously simplistic idea of how to run a company. And it ignores the entire history of why corporations exist in the first place.

Corporations don't exist purely to make money. They exist because a bunch of people wanted to get together and limit their individual risk in order to make some sort of risky undertaking. Sail the seas and discover new lands! Bring back exotic and valuable spices! Build useful gadgets and devices that will improve people's lives! That is why a corporation gets created. The joint-stock corporation exists so that if this undertaking fails utterly (ship sinks, gadget is actually useless and no one buys it) then the founders don't lose everything they own. Their risk is limited, so they are able to take a punt.

Money is just a tool to help you with your undertaking. You need to earn back the cost of capital because otherwise people would be better off investing in a different idea, and will withdraw their money. You need the money to keep the company alive so that you can continue with its undertaking.

To clarify this point even further, look at Not-For-Profits. They should make money, yes, but that's not why they exist. They have some purpose - finding a cure for cancer, educating the underprivileged, planting trees - and profits enable them to keep doing that. Lack of profit means they can't buy seeds, or pay for chalk, or pay the people doing the good works. And without those things, the company cannot fulfil its purpose.

The directors' fiduciary duty is to the corporation. That's what it is under Australian law, and, from what I can tell, US law, particularly Delaware, is very similar.

Duty to the corporation. Not its shareholders. Not its employees. The corporation. Which means you act in service to the corporation and its reason for existing. This implies that shareholders and employees and suppliers and customers are all important and need to be taken into consideration so that the corporation can better fulfil its purpose.

If anyone can point to a cogent and well argued case for shareholder primacy, I'd love to read it. All I've seen so far seems to boil down to "making money is the only morally correct choice" which is sociopathic and wrong.
posted by But tomorrow is another day... at 3:33 PM on April 12, 2013 [5 favorites]


The fund directors end up on the board of directors, they stay invested in the firm despite poor performance while they and management divvy up the loot, and everyone's happy (except for the 99%, and they're used to suffering).

Not actually true. Very few fund managers serve as directors of the companies their funds own. It creates a massive compliance issue as you are essentially an insider and it become impossible to buy or sell the shares. There are activists who go on boards, but actually those guys are usually being aggressive about forcing change, and while can problematic in the bigger picture wrt to the issue being discussed here, are actually pretty positive. The whole outsourcing proxy voting is driven by risk aversion more than anything else. It prevents you from getting sued by your mutual fund shareholders basically. Its cover your ass stuff.

Again - no one in this thread has contested the argument that boards are not required to maximize shareholder value. We all agree.

Ask yourself what is the difference in interests between a corporation as an entity and its shareholders. They should be aligned. What saying the duty is to the corporation means is that your responsibility is the entire aggregate capital in the business, not just the guy with the most votes at the annual meeting. Its why the board of a company where an entity that controls 50%+1 of the voting rights cannot just do what that entity wants, it has to consider what is best for the business and all of the shareholders. It might be putting a man on the moon. Who knows? That's why you vote for the BoD.

BTW you should read most corporate charters. Here is the standard line in a Delaware Charter for purpose:

The purpose of the corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.
posted by JPD at 4:23 PM on April 12, 2013


Man, and I just showed my 77-year-old mother how to vote her shares on the internet yesterday. Should not have bothered.
posted by immlass at 5:13 PM on April 12, 2013


Nothing will change as long as people are content to let their mutual fund managers outsource their corporate governance work.

You mean as long as reluctant investors are forced into mutual funds as retirement plans so the financial sector can loot them both via fees and by gaming the stock market because there is no decent pension system or meaningful government oversight?

I'm not interested in being an investor but I have no bloody choice if I want the company contribution for my retirement and the tax break.

I might as well put it all on red even though I know the wheel has magnets in it.
posted by srboisvert at 6:28 PM on April 12, 2013 [1 favorite]


What do you think your pension would be invested in?
posted by JPD at 6:45 PM on April 12, 2013


You pay for them, up front, by setting aside 20-30% of each employee's annual income.

But then, employers who offer this benefit will be at a competitive disadvantage to those who don't (because they'll be able to offer higher base-pay if they don't offer the benefit), and so the public and the private sector will eventually demand the program be made mandatory to level the playing field.

And then in 50 years, the usual idiots will convince the American public that the 20--30% put aside in deferred compensation is actually an unfair tax on employers, convince large swaths of the public that this new system only exists to support parasitic welfare exploiters, and demand that the whole system be scrapped.

The unemployment system, for example, began more or less this way. And now a significant swath of the population views it as a welfare program and fully support the idea of requiring mandatory drug testing for anyone seeking to receive the benefits of their own deferred compensation.

No thanks.
posted by saulgoodman at 7:51 PM on April 12, 2013 [3 favorites]


JPD: "Again - no one in this thread has contested the argument that boards are not required to maximize shareholder value. We all agree."

Someone apparently disagreed because several states have statutes creating "low-profit limited liability entities" or "social purpose corporations" which expressly state that this these entities are exceptions to the normal case:
The mission of this social purpose corporation is not necessarily compatible with and may be contrary to maximizing profits and earnings for shareholders, or maximizing shareholder value in any sale, merger, acquisition, or other similar actions of the corporation.
- RCW 23B.25.050(1)(e)

Or did I completely misread the purpose of these? (It's certainly possible.) I just found it interesting that states are now creating corporate forms that distinctively do not place shareholder value or overall profit ahead of all other goals.
posted by fireoyster at 10:16 PM on April 12, 2013


Shareholders are supposed to take things like their ability to reign in wayward directors and executives into account when they make their investment decisions.

The majority voter is in the same economic class and same social class as the looters. The individual investor is by comparison a worthless pimple on the market's ass.

Good luck demanding wage and bonus accountability from people who demand great personal wealth.
posted by five fresh fish at 11:22 PM on April 12, 2013 [1 favorite]


that increasing returns to shareholders is the only correct moral choice

All of these points don't define what the shareholder interest is. Long term or short term?
posted by Ironmouth at 12:39 AM on April 13, 2013


A good point, Ironmouth, and my view is that the "shareholder interest" is a vague and useless concept. If you assume that shareholders will sell stock that isn't aligned with their own interest, then the directors should be free to concentrate on what is best for the corporation and the reason that corporation exists.

And very few corporations exist purely to "make money".
posted by But tomorrow is another day... at 1:32 AM on April 13, 2013


But then, employers who offer this benefit will be at a competitive disadvantage to those who don't (because they'll be able to offer higher base-pay if they don't offer the benefit), and so the public and the private sector will eventually demand the program be made mandatory to level the playing field.

But what if that's the only kind of retirement saving available? No defined benefit programs, and defined contribution required to be at that level or nothing at all? Program still isn't mandatory, but if the choice is between this kind of program and nothing, it's hard to argue that the latter puts anyone at an advantage.

Also, it's hard to view it as a tax on employers if the money goes into an individual's private account. They can't necessarily touch it, but they can watch it grow. Maybe they can even borrow against it for certain things. I dunno. I'd agree that having the money vanish into some inscrutable system would probably be unpopular, but having it go to an account that individuals can check would do a lot to mitigate that, I should think.

And another thing: just like it's completely irrational to have employers involved in health care,* why should they be involved in retirement planning? As it is, every time you change employers you can potentially wind up with a different kind of retirement savings account with a different financial institution. This is ridiculous. Individuals should have one such account, created by them, where they put all the money that they save or is contributed on their behalf.

*Individuals do not benefit from having their health insurance linked to their employment, and businesses sure as hell don't like dealing with the hassle.
posted by valkyryn at 4:37 AM on April 13, 2013


*Individuals do not benefit from having their health insurance linked to their employment, and businesses sure as hell don't like dealing with the hassle.

And yet I doubt the insurance companies mind a system where subscribers don't see most of their bill and don't have a meaningful choice of plans, while the businesses that do get to choose which company they go with will pick on the basis of "hassle" rather than quality of coverage. It's win-win! Y'know, for them.
posted by Holy Zarquon's Singing Fish at 5:46 AM on April 13, 2013 [1 favorite]


And yet I doubt the insurance companies mind a system where subscribers don't see most of their bill

And we wonder why health care is expensive...
posted by valkyryn at 10:25 AM on April 13, 2013


Individuals don't have enough leverage to exert meaningful pricing pressure when it comes to many forms of medical care though, valkyrn.

When it comes to the life-or-death stuff, this is just obvious: As consumers of health care, we can't opt-out of buying the service, regardless of how much we might think we're being bilked.

Even non-life-threatening medical conditions can have serious personal consequences.

That's why health care will always represent a market failure that needs to be attenuated by public policy: we aren't qualified, as consumers, to understand what we're buying in the first place, and the personal costs of not buying will always be too high.
posted by saulgoodman at 8:04 AM on April 15, 2013


As consumers of health care, we can't opt-out of buying the service

Flat out wrong. We absolutely can. Both of my late grandfathers opted for minimal treatment in their last illnesses because the treatments involved would have been horribly invasive, involved terrible side effects, and would have maybe extended their lives by a few months. They would have been hideously expensive to boot, but they were both well-insured on top of being on Medicare, so that wasn't actually much of a consideration.

But the result was that they wound up consuming a mere fraction of what many dying Americans consume in terms of health care dollars. I'd call that "opting out". And that, right there, is what is driving up health care spending. Americans insist on extravagant, expensive treatments where there is little chance that such treatments will have good outcomes. Eliminate that kind of thing and you could probably cut health care spending by 20-40%, right off the top.

But go a step further. Give Americans the ability to make meaningful choices about their health care at every stage. I recently started taking new medication. The first month they had me on this new designer drug. The pharmacy charged me $140 in December, but I was having an issue with my insurance at the time, so I just paid it and hoped it would be cheaper next time. It went up to $220 in January. So I called my physician's office and told them this was for the birds, and I wanted on the generic. I now take two pills every day instead of one, and I pay $10 a month. There's "bending the cost curve:" consuming less health care. If health care providers were required to give accurate information about what services cost, I'd be willing to bet that people would choose more cost-effective treatments. But as even most physicians have no idea what they actually bill or get paid for for their services, this kind of thing is currently impossible.
posted by valkyryn at 3:20 AM on April 17, 2013


« Older Nuit et Brouillard   |   I couldn't wait for success, so I went ahead... Newer »


This thread has been archived and is closed to new comments