Blue Cross and Blue Shield of Minnesota may be calling for providers to tighten their belts, but the wallets of its top executives are even fatter than previously thought.
The not-for-profit health insurer revealed recently that President and CEO Mark Banks, M.D., is paid nearly $3 million per year-three times more than the $1 million the company had disclosed in prior years. Senior Vice President Richard Niemiec receives about $1.1 million per year, versus the $350,000 originally made public.
The revelation came just two months after the Eagan, Minn.-based Blues, which has been clamping down on reimbursement rates, issued a report blaming excessive construction by the state's hospitals for rising healthcare costs.
"In today's environment, where executive compensation is being thoroughly scrutinized because of accounting scandals and mismanagement, consumers are asking for more information about all companies," the health plan said in a written statement. "We agree with those calls for greater disclosure."
Banks' 2001 compensation package was $2.8 million, of which $948,000 was paid to him as salary and an annual bonus. Another $1.9 million was deferred and will be paid to Banks if he stays with the company and meets certain performance goals set by the board. Roughly $766,000 of Niemiec's 2001 pay package is deferred compensation.
The Blues plan said it had initially decided not to disclose the deferred components because they have not yet been paid and could potentially shrink. The company also said two independent studies had found that its compensation packages were below those of comparable insurers.
But Minnesota Attorney General Michael Hatch called Banks' $2.8 million compensation "absolutely appalling" at a time when healthcare costs are rising steadily, and said he may consider moving up his planned audit of the Blues.
Top executives at two other major health plans also earned more than previously disclosed. HealthPartners paid former CEO George Halvorson $1.1 million in 2001, of which $250,000 was classified as deferred compensation. Medica CEO Jane Rollinson received $609,000, with $71,000 of that deferred.
David Pitts is well-known in healthcare circles, but until recently for the usual reasons. He runs his own consulting company, Pitts Management Associates in Baton Rouge, La.; serves as president of a prominent think tank; sits on the boards of many companies; and is active in his church. Earlier this month, he was elevated into a more rarified atmosphere.
Pitts was inducted, by sanction of Britain's Queen Elizabeth II, into the Most Venerable Order of the Hospital of Saint John of Jerusalem, a 900-year-old order associated mostly with charitable work. In a ceremony at the British Embassy in Washington, he was knighted with three others (one couldn't make it because he was sick) and, afterward, got treated to a fancy dinner at the Corcoran Gallery of Art.
After many years of service to the Episcopal Church, Pitts suspects it's his ties to the Anglican Church that have earned him the honor. But he still finds it hard to believe: "The whole time, I expected (former American Hospital Association Chairman) Don Wegmiller and (Lifespan Corp.'s) Bill Kreykes to jump out from behind a pillar and say, `Gotcha.' "
In giving nurses and other staff members the respect they're demanding as necessary for staying in their fields, employers are wooing healthcare workers to their hospitals with a perk usually reserved for the top brass-the gift of time.
"Baylor Butler," a concierge program run by Boston-based Circles, is the newest recruitment and retention effort at Baylor Health Care System in Dallas.
Like any good personal assistant, the program offers well-informed and timely help, putting together tasks such as shopping for airfare, securing tickets for the hottest shows or planning for home plumbing repairs. Researching and arranging for any of the tasks, usually turned around in a day or two, are free to employees. Optional for a nominal fee, usually $10 per hour, are more personalized services such as having someone drop by the hospital for house keys and wait at the house for the plumber.
Supervisor Laura Capehart, a registered nurse who works 12-hour shifts on a transplant floor at Baylor, says it's the best perk she's gotten so far. "It's a real timesaver," she says. She's currently looking for the "coolest toys to give a 10-year-old boy." With the program, she can spend more time with her children, rather than running errands in her free time, she says.
At a cost of $100,000 annually, it's cheaper than taking the more than 15,000 employees out for dinner, says Fiona MacLeod Butts, director of employment at Baylor.
"Research shows that 44% of employees want a good balance of work and life. In fact, it is the most important factor in considering a job offer," Butts says. "With Baylor Butler, we have the opportunity to give every employee a personal assistant."
"I'm acutely aware that when a doctor refers to a patient as a customer, an angel dies."
-Harvard's David Shore, an authority on healthcare marketing and branding, at the Harvard School of Public Health symposium on trust in healthcare in Boston earlier this month.