[Platform] health insuance bosses make bigtime bucks - herald article

[Jill Stein]

In case you haven't seen this yet. -jill
 
  _____  

 
Health insure bosses make bigtime bucks
Nonprofits defend execs' pay 
By Casey Ross, Boston Herald, Wednesday, March 12, 2008
 
Bay State health insurance bosses are raking in multimillion-dollar pay
packages - and politically wired powerbrokers get tens of thousands as
part-time directors - even as the state and its taxpayers struggle to
pay skyrocketing health care costs, a Herald review shows.
 
Blue Cross Blue Shield, by far the state's largest insurer, paid nine
million-dollar pay packages - including base salary, bonus, retirement
and health care benefits, parking allowances and other perks - to its
top executives in 2007. The nonprofit firm's CEO, Cleve Killingsworth,
was paid $3.6 million, including a bonus of $1.8 million, according to
compensation records filed with the state Division of Insurance.
 
Blue Cross also paid significant sums to its politically connected board
of directors. Among them:
. The board's vice chairman, Robert Haynes, head of the Massachusetts
AFL-CIO: $70,900;
. Greater Boston Chamber of Commerce chief Paul Guzzi: $55,900;
. Ralph Martin II, former Suffolk district attorney: $54,957;
. Philip Johnston, former head of the state Democratic Party: $50,844;
. Marian Heard, former United Way of Massachusetts Bay CEO: $48,444;
. Gloria Larson, Foley Hoag partner and chairwoman of the Massac husetts
Convention Center Authority: $44,700.
 
In all, the state's three biggest health insurers paid 11 executives
more than $1 million each in total compensation last year, and more than
two dozen senior managers got bonuses upward of $100,000.
 
"These salaries are out of control," said state Sen. Mark Montigny
(D-New Bedford). "They don't pass the smell test or the laugh test.
These insurers are hiding behind the veil of their not-for-profit
status."
 
Through a spokesman, Guzzi referred questions to Blue Cross. The other
directors did not return phone calls seeking comment.
 
Blue Cross holds seven board meetings a year, but company
representatives said board members also serve on subcommittees that help
make significant policy decisions.
 
"Directors have a lot of responsibility for shaping and implementing t
he CEO's vision," Blue Cross spokesman Chris Murphy said. "It's not just
showing up for an occasional meeting."
 
The pay packages are drawing increasing scrutiny on Beacon Hill as
lawmakers debate ways to curb the exponential growth in health-care
costs. Legislation being considered today would force insurers and
health providers to publicly document reasons for increasing costs of
insurance and medical procedures.
 
Industry officials said such documentation would show that executive
salaries account for a small fraction - less than 10 percent - of
overall health-care costs.
 
Representatives of insurers said they must offer competitive
compensation to attract executives who could earn millions more in stock
options in the private sector.
 
"Paying for premium talent keeps us financially stable, it keeps us
innovative and it keeps health ca re as affordable as possible," said
Murphy, noting that executive pay at Blue Cross is based largely on
performance incentives meant to make the company run within tight
financial margins.
 
Still, some lawmakers argue that insurers are contradicting the nature
of their nonprofit status when their executives are profiting handsomely
from their work. In addition to Killingsworth at Blue Cross, Harvard
Pilgrim CEO Charles Baker was paid $1.3 million last year and Tufts CEO
James Roosevelt got $1.1 million.
 
"It's egregious," said state Sen. Steve Baddour (D-Methuen). "Here we
are, fighting to keep down costs amid double-digit increases, and how
many millions are these nonprofits giving out? They should add it all up
and return it in rate relief."
 
Experts in executive compensation said, however, that the increasing pay
is driven by dramatic inflation in salaries paid t o CEOs in general.
 
"People have a hard time reading that the guy at the health plan is
being paid $1 million a year, but (insurers) have to use a benchmark
based on other for-profit firms conceivably interested in these
executives," said Fred Foulkes, professor of organizational behavior at
the Boston University School of Management.
 
"It's the market, and that's how people keep score."
 
Article URL:
http://www.bostonherald.com/news/regional/general/view.bg?articleid=1079
694 
 
  _____  

How well do you know your celebrity gossip? Talk
<http://originals.msn.com/thebigdebate?ocid=T002MSN03N0707A>  celebrity
smackdowns here.