Boardroom Conflicts of Interest Raise Health Care Costs

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.

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