There has been enormous sums spent on mergers and acquisitions. When NASW joined in the anti-trust lawsuit, it was against the nine behavioral managed care companies. Right now there are about 6 still in the suit, proving the point of the suit. With mergers, costs are not spent on direct health care services, but on lawyer fees and golden parachutes for corporate executives who agree to these buyouts. Golden parachutes are large payments to the boards of directors to approve these mergers.
Money is spent on the intangible asset of goodwill, paying for the good name of the company.
These are large sums of money for an intangible investment. The health care dollar is being shared with stockholder dividends. One of the most onerous cost is the exorbitant salaries paid to the corporate executives. When we look at these salaries we are witnessing a redistribution of wealth from provider groups, namely MD's, to corporate executives. The President of Travelers had a 1998 compensation of 288 million dollars.