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  • Lets see some outrage here

    Globe Staff / February 28, 2009


    The salary and bonus paid to Cleve L. Killingsworth, chairman and chief executive of Blue Cross and Blue Shield of Massachusetts, increased 26 percent last year, to $3.5 million, even though the health insurer's membership declined and its net income fell 49 percent.

    Blue Cross profits, exec pay spark criticism



    Posted: Mar. 4, 2009
    Updated: Mar. 9, 2009
    Chapel Hill, N.C. — Blue Cross Blue Shield of North Carolina, the state's largest insurer, earned $186 million last year while raising premiums on customers as the economy slid into recession.



    The top six executives at Blue Cross each made more than $1 million last year, topped by Chief Executive Bob Greczyn at close to $4 million. Greczyn's annual income included a $3 million bonus and was a 23 percent increase over 2007.


    And the best is Michigan. You remember Michigan.


    LANSING, Mich. (AP) -- Blue Cross Blue Shield of Michigan reported pay increases for its top executives in 2008.

    Blue Cross says it lost nearly $145 million in 2008, mostly on its health insurance policies sold to people who aren't covered by employer or government plans. Blue Cross wants the Michigan Legislature to change state law covering the individual market.
    Blue Cross President and Chief Executive Dan Loepp's total 2008 compensation was reported at nearly $1.8 million, up from about $1.66 million in 2007.


    Top executives at Blue Cross Blue Shield of Michigan were paid hundreds of thousands of dollars in bonuses in 2008 months before the state’s largest insurer announced layoffs and premium increases to policyholders.

  • #2
    Re: Lets see some outrage here

    Bah.

    Executive pay is an issue between management and shareholders. If shareholders have a problem with executive compensation, they should do something about it. I'm not a shareholder, so why should I care? But the point of the article isn't to inform shareholders -- it's to fan the flames of class conflict.

    And while rising premiums are objectionable to current policy holders, they may be necessary. The only way to test whether they are reasonable or not is to look to the competition. If BCBS is making so much easy money, then competitors and investors ought to to be rushing out to get a piece of that action. But they mostly aren't. They aren't because it isn't easy money.

    Most recently a friend complained about the greed of the owner of a nearby paper mill that had some time ago closed up in response to a strike.

    I asked, if it's so damned easy to make money running a paper mill, where are the investors stepping up to take over? Why was the mill shutdown instead of being sold to some willing investor?

    The answer of course is that it's not easy. And in this case, when labor made themselves a pain in the ass, it just wasn't worth the effort.

    Whenever someone around me has complained about the profitability of some long established company in some long established industry, I've said the same thing: if the money is so easily made, where's the gold rush? Where are the startups? Where are the competitors?

    But back to BCBS: most of these numbers being thrown around are small change compared to the total money moving through companies like BCBS. Last year BCBS had over $21 billion in revenue. The top 6 executives collectively made less than $24 million. That's less than 0.12% of revenues.

    Is executive compensation really making that much of a difference in premiums? Of course not.

    Comment


    • #3
      Re: Lets see some outrage here

      Originally posted by Scot View Post
      Bah.

      Executive pay is an issue between management and shareholders. If shareholders have a problem with executive compensation, they should do something about it. I'm not a shareholder, so why should I care? But the point of the article isn't to inform shareholders -- it's to fan the flames of class conflict.

      And while rising premiums are objectionable to current policy holders, they may be necessary. The only way to test whether they are reasonable or not is to look to the competition. If BCBS is making so much easy money, then competitors and investors ought to to be rushing out to get a piece of that action. But they mostly aren't. They aren't because it isn't easy money.

      Most recently a friend complained about the greed of the owner of a nearby paper mill that had some time ago closed up in response to a strike.

      I asked, if it's so damned easy to make money running a paper mill, where are the investors stepping up to take over? Why was the mill shutdown instead of being sold to some willing investor?

      The answer of course is that it's not easy. And in this case, when labor made themselves a pain in the ass, it just wasn't worth the effort.

      Whenever someone around me has complained about the profitability of some long established company in some long established industry, I've said the same thing: if the money is so easily made, where's the gold rush? Where are the startups? Where are the competitors?

      But back to BCBS: most of these numbers being thrown around are small change compared to the total money moving through companies like BCBS. Last year BCBS had over $21 billion in revenue. The top 6 executives collectively made less than $24 million. That's less than 0.12% of revenues.

      Is executive compensation really making that much of a difference in premiums? Of course not.

      You miss the point Blue Cross and Blue Shield are non profits.

      Comment


      • #4
        Re: Lets see some outrage here

        Originally posted by cjppjc View Post
        You miss the point Blue Cross and Blue Shield are non profits.
        All of the 38 BCBC entities want to be for profit.

        "If successful, New Jersey's Blue Cross would be the 14th to make the shift to for-profit status. Four states -- Maryland, Washington, Alaska and Kansas -- rejected conversion petitions, Ryan said."

        And they already are for all practical purposes. They take in big supluses and hoard them.

        BCBS is one of the better arguements for single payer healthcare reform.

        Executive pay is a big issue, even if it is one tenth of one percent of the money flowing through a company or non-profit.

        No one working for BCBS should be making a million dollars. Unless police chiefs are making two million, and teachers 200,000.
        Last edited by Thailandnotes; 03-23-09, 06:32 AM.

        Comment


        • #5
          Re: Lets see some outrage here

          Yes. Fine all should become for profits. There is an assumption about non profits. I wouldn't want to get into the subject of how much any certain profession should be making. I was just pointing out the hyporicy.
          You know nowhere has there ever been a discussion about how much is enough.

          Comment

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