Health Insurance CEOs Get Big Raises
Pay Spikes Come As Insured Face Rising Costs
POSTED: 5:35 pm EST January 9,
2009
UPDATED: 6:34 pm EST January 9,
2009
Email
Print
BOSTON -- Team 5 Investigates Janet Wu has learned that CEOs of the state's three biggest health insurance non-profit companies have all received double-digit raises in recent years, while patients face eight to twelve percent annual premium increases.
Health Care Exec's Pay Examined A review of documents filed with the state show that Cleve Killingsworth, chairman and CEO of Blue Cross Blue Shield of Massachusetts, earned more than $3.6 million in 2007, including salary, benefits and incentives. Since 2005 his total compensation has jumped 38 percent."We pay competitive compensation sufficient to recruit and retain high performing employees," said BCBC spokesman Jay McQuaid.Two of Killingsworth's senior management colleagues also saw impressive growth. Dr. John Fallon's $1.2 million compensation for his job as senior vice president and chief physician executive doubled between 2005 and 2007.Andrew Dreyfus, BCBS's executive vice president of health care services, saw a 58 percent hike in his salary and bonuses over the same time.Smaller but competing insurers also pay their CEOs more than $1 million a year. James Roosevelt, CEO at Tufts Health Care, received more than $1.6 million in 2007, a 110 percent jump over his $785,013 compensation in 2005.Charlie Baker, President and CEO of Harvard Pilgrim, earned just under $1.4 million in 2007, a 26 percent hike since 2005."With premiums going up 8 to 12 percent in a period of recession, with thousands of people losing their jobs, what did they do to earn those salaries," asked Harvard Business School economist Regina Herzlinger, who authored the book, 'Who Killed Health Care.' Seventy percent when we're in a recession, the worse since the great depression, seems a little out of line."Insurers told Team 5 Investigates that only 10 percent of their budget goes towards administrative costs."If everyone at Blue Cross Blue Shield, from the CEO on down, worked for free, the impact on premiums would be 4 cents on a dollar," said McQuaid.McQuaid: "We will feel the effects of the economic downturn. Our bonuses will be lower than they have in the past."Wu: "But at a time when most people are getting no bonuses and in fact, salary cuts, how do you justify that?"McQuaid: "I can't characterize if it's fair or not. The compensation of the 10 highest paid executives at Blue Cross Blue Shield is 0.2 percent of premiums."Gov. Deval Patrick has named a five-member commission to figure out how to contain health care costs. On Monday, he will meet with the heads of the largest insurance companies and hospitals.Harvard Pilgrim spokesperson Sharon Torgerson said in a statement that, "Mr. Baker's compensation is reviewed annually by Harvard Pilgrim's Board of Directors and is consistent with what CEOs at similar organizations receive."
Health Care Exec's Pay Examined A review of documents filed with the state show that Cleve Killingsworth, chairman and CEO of Blue Cross Blue Shield of Massachusetts, earned more than $3.6 million in 2007, including salary, benefits and incentives. Since 2005 his total compensation has jumped 38 percent."We pay competitive compensation sufficient to recruit and retain high performing employees," said BCBC spokesman Jay McQuaid.Two of Killingsworth's senior management colleagues also saw impressive growth. Dr. John Fallon's $1.2 million compensation for his job as senior vice president and chief physician executive doubled between 2005 and 2007.Andrew Dreyfus, BCBS's executive vice president of health care services, saw a 58 percent hike in his salary and bonuses over the same time.Smaller but competing insurers also pay their CEOs more than $1 million a year. James Roosevelt, CEO at Tufts Health Care, received more than $1.6 million in 2007, a 110 percent jump over his $785,013 compensation in 2005.Charlie Baker, President and CEO of Harvard Pilgrim, earned just under $1.4 million in 2007, a 26 percent hike since 2005."With premiums going up 8 to 12 percent in a period of recession, with thousands of people losing their jobs, what did they do to earn those salaries," asked Harvard Business School economist Regina Herzlinger, who authored the book, 'Who Killed Health Care.' Seventy percent when we're in a recession, the worse since the great depression, seems a little out of line."Insurers told Team 5 Investigates that only 10 percent of their budget goes towards administrative costs."If everyone at Blue Cross Blue Shield, from the CEO on down, worked for free, the impact on premiums would be 4 cents on a dollar," said McQuaid.McQuaid: "We will feel the effects of the economic downturn. Our bonuses will be lower than they have in the past."Wu: "But at a time when most people are getting no bonuses and in fact, salary cuts, how do you justify that?"McQuaid: "I can't characterize if it's fair or not. The compensation of the 10 highest paid executives at Blue Cross Blue Shield is 0.2 percent of premiums."Gov. Deval Patrick has named a five-member commission to figure out how to contain health care costs. On Monday, he will meet with the heads of the largest insurance companies and hospitals.Harvard Pilgrim spokesperson Sharon Torgerson said in a statement that, "Mr. Baker's compensation is reviewed annually by Harvard Pilgrim's Board of Directors and is consistent with what CEOs at similar organizations receive."Copyright 2009 by TheBostonChannel.com. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
