Health industry breeds fat cats

Britain's health sector now has its own fat cats, with the bosses of Bupa and PPP, the private health insurers, each earning more than half a million pounds a year in pay and benefits.

The pay packages of Peter Jacobs, 53, chief executive of Bupa, and Peter Owen, 47, chief executive of PPP, are attracting mounting censure. Last year Mr Jacobs, boss of Bupa since 1991, received a total of pounds 623,000, while Mr Owen, PPP's boss since 1994, got pounds 505,000.

The criticism is all the more pointed because both companies are provident associations: not-for-profit organisations set up to provide subscribers with mutual cover for private health care.

Yet since 1990 the earnings of their chief executives have soared, by 173 per cent in Bupa's case and by 145 per cent at PPP. In that time the subscription income of both companies rose by less than 50 per cent, average earnings increased by 24 per cent, and the health insurance market remained virtually flat.

That scale of remuneration - coming on top of fresh protests last week over bosses' pay levels, in particular the pounds 10m five-year deal for George Simpson, the new chief executive of GEC - is causing anger in both the private and public health sectors. John Randle, former chairman of the Independent Hospitals Association and now head of the Hospital Management Trust, which runs two private hospitals and nursing homes, said: "If I were a subscriber of Bupa and PPP, I would be very worried at these levels of directors' income."

Bob Abberley, of the health workers' union Unison, said: "These are clearly the fat cats of the health care industry. These figures lift the lid on the people making profits from health care."

Prof Alan Maynard, of York University, an expert on provident associations, said the pay packages "seem reminiscent of the big increases we have seen in the privatised utilities ... questions need to be raised about that."

Full report, page 4