Posted tagged ‘wellpoint’

What Near Depression? Healthplan Executive Comp. Jumps 26% In 2009

May 3, 2010

With the nation in a deep recession, in the midst of a financial crisis, with 2 million+ homes in foreclosure and unemployment at nearly 10% the compensation of the top executives and directors at the nation’s 7 largest publicly traded healthplans – Aetna, Cigna, Humana, Wellpoint, United Healthcare, Coventry and HealthNet – increased 26% over 2008 – rising from $180 M to $225 M.

The 7 combined for $12.4 Billion in profits and their stocks gained an impressive $19.7 Billion in market value even as the supposed evil specter of healthcare reform loomed.

Click the Piggy Bank for the Summary Chart.

Click Here to See 2009 Details by Company

Once again the total compensation of these executives ($224.7 M) add up to nearly  2 1/2 times the total salaries paid all of the 561 leaders of the 3 branches of the United States government ($100.3 M).

If the executive teams from the “non profit” Blues plans were included the total jumps nearly another $100 Million to over $325 Million led by Healthcare Service Corp (BCBSIL, BCBSTX et al).

In fact the “golden parachute” packages for 6 Wellpoint executives ($98.3 M) nearly equalled the total of the 561 government leaders salary alone.

While Aetna, Cigna and HealthNet CEO’s saw a decrease year over year in their total compensation Ron Williams of Aetna was still the highest paid of the group at $18M.

The largest percentage increases for CEO’s  were:

  • Coventry – Alan Wise -$17.4 M up from $9 M
  • United -Stephen Helmsley – $8.9M up from $3.2 M
  • Wellpoint – Angela Braly – $13.1 M from $9.8 M
  • Humana – Mike McCallister – $6.5 M from $4.8 M

Source – Reuters Finance / Company Proxy Statements

The Industry Radar has been publishing a summary of executive compensation for the last 3 years ever since the Dr. William McGuire options backdating scandal in 2007 and one area we looked at in more detail this year was the value of stock options held by healthplan executives.

You may recall Dr. McGuire in a CBS News interview famously stated that his $1.8 Billion in options did not impact the rates that were charged to their policyholders. He subsequently was forced to relinquish nearly $600 Million in options and United Healthcare paid over $900 Million to settle shareholder lawsuits.

Nearly $1.5 Billion of options are held by only 26 executives led by United Healthcare’s CEO once again:

  • United Healthcare – Stephen Helmsley – $843 Million
  • Aetna – Ron Williams – $227.3 Million
  • United Healthcare – David Wichmann – $81.6 Million
  • Humana – Mike McCallister – $71.8 Million
  • HealthNet – Jay Gellert – $62.3 Million
  • Coventry – Allen Wise – $26.4 Million

Source – Reuters Finance / Company Proxy Statements

Just the options held by these 6 executives could pay the salaries of the entire leadership of our government until 2022.

Clearly the job of executives in any public company is to increase shareholder value and that is what they are paid to do.

To see these types of rewards in the worst economic year in half a century coupled with the options listed above raises questions as to our healthcare system and its relationship to what is going on in society.

I would hope in the future that if companies are going to pay these types of compensation that the growth of their companies, and how they get rewarded will be based on running tight operational businesses that measurably increase the health and well being of their customer base – which thanks to PPACA will be 32 million more people – the largest legislative gift ever to any industry in the world.

At Least the Healthplan CEO’s Haven’t Flow in on Their G-5’s…Yet

June 11, 2009

Did the major health insurers hire the PR folks that worked for the Big 3 Auto companies?

As healthcare reform heats up the facts about absurd executive pay at the public and largest private health plans is coming out and it is not a pretty PR story.

In fact it  is almost more laughable (in a perverse way) than the Big 3 auto CEOS flying in on their G-5’s to beg for money or the baloney about the AIG bonuses. Here is how it breaks down

How does that compare to the reformers?

Well the President, Vice President, their Cabinet, The Supreme Court Justices, the House and Senate – 660 People – combined to earn around $100,000,000 to run the country.

I am no fan of a lot of government or many in Congress but healthcare execs making 3++ times what we pay for the entire leadership of the country is bizarre, with half of it coming from “Non-Profits” .

In the middle of health care reform, where the the for both the for profit plans and the nominally not for profit Blues plans are fighting tooth and nail to defeat real reform let’s hope that we see some attention to this absurdity.

What a PR nightmare. Maybe the laid off PR teams from the Big 3 or AIG can help them as we move forward ot shoot themselves in the foot some more.

Survey – Health Plans Deliver The WORST Experience!

June 10, 2009

And now from Forrester Research, Health plans rate the lowest of any industry:

In Forrester’s 2008 Customer Experience Index (CxPi), we ranked 113 companies across 12 industries. I recently published a snapshot of the health plan industry looking at the results from the eight plans on the list (Aetna, Anthem (BCBS), CIGNA, Kaiser, Medicaid, Medicare, TriCare, and United Healthcare). Here’s some of what we found:
Experiences are “very poor” and getting worse. As a group, the eight health plans ended up with a “very poor” rating of 51%; the lowest score of any of the 12 industries we examined. Making matters worse, the industry dropped three percentage points from the 2007 CxPi results.
Kaiser led the pack. With an “okay” score of 70%, Kaiser led all health plans. All of the other plans ended up with ratings of either “poor” or “very poor.”
Medicaid is as bad as it gets. With a terrible rating of 38%, Medicaid was the lowest scoring plan. It also ended up in next to last place across all 113 organizations in our rankings.
Only Kaiser improved. When we compared the 2008 results with those from 2007, only Kaiser showed an improvement. CIGNA and Medicaid, on the other hand, declined the most.
Some big shifts in CxPi components. There were five double-digit changes in the scores for the three underlying elements of the CxPi: Kaiser’s improvement in being easy to work with and enjoyability, Anthem’s decline in enjoyability, and both CIGNA’s and Medicaid’s drop in being easy to work with.

The bottom line: Put customer experience on the health care reform agenda.

Read the whole survey here.

32 Execs from 6 Health Insurers Out Earn All US Govt. Leaders Again in 2008

June 9, 2009

In what was a bad year for the health insurance industry and a disastrous one for the US economy the 32 top executives of Aetna, Cigna, Wellpoint, United Healthcare, Humana and Coventry earned $144,000,000 combined.

This total fell dramatically from 2007 when these same companies had  total executive comp. of $278,000,000, though there were numerous severance packages in that figure.

By comparison the total salaries of the President, Vice President, 15 Cabinet Secretaries, 9 Supreme Court Justices and 535 members of the US House and Senate were just under $100M last year.

The Boards of these 6 profit healthplans earned another $21,400,000 for attending a few board meetings annually.

In the past 5 years the executives of these 6 companies and their Board members have been paid over $925,000,000 plus the approximately $450,000,000 million in stock options that former United Healthcare CEO William McGuire was allowed to keep of the $1,800,000,000 that he had been awarded in his questionable options dating scandal.

Right, wrong or indifferent, the for profit healthcare plans have a major PR issue that this compensation issue is just part of.

Earlier this week Forrester Research relased the results of its industry customer satisfaction statistics and for the seconmd straight year the health insurers came in dead last, actually losing ground from 2007.

In April J.D. Powers released their healthplan rankings by region and the results for Aetna, Cigna, Wellpoint, and especially United Healthcare, were downright embarassing in comparison to the regional players and BCBS plans that won in every region. Only Humana scored reasonably well in those surveys.

So an industry with abysmal customer satisfaction results continues to raise prices at will and compensate its leadership based on what criteria? This dog doesn’t hunt in any other part of our lives and may not in the future as healthcare reform progresses.

Wellpoint’s Board Paid More than Executive and Judiciary Branches Combined

June 9, 2009

Wellpoint’s 16 member Board, the most highly compensated of the 6 largest health insurers, makes  $1M more than President Obama, Vice President Biden, all 15 Cabinet Secretaries and the 9 Supreme Court Justices combined.

At over $325,000 each this is nice pay for a few board meetings a year…another PR problem for the for profit insurers. Their Boards, not just their execs, are too highly compensated.

6 Health Insurers Boards Paid More than Senate and SCOTUS Combined

June 9, 2009

In updating our annual review of the executive salaries of the 6 largest publicly traded health plans , Aetna, Cigna, Wellpoint, United Heatlhcare, Humana and Coventry, we decided to look at the Boards of these firms and the compensation paid to their members.

As one would expect the 69 Board members of these six insurers are highly compensated averaging nearly $275,000 annually. All for sitting in on a few board meetings.

In fact in total the compensation paid them is greater than total salaries paid the the 1oo members of the US Senate and the 9 Supreme Court Justices combined.

Wellpoint’s 16 member Board, the most highly compensated, makes  $1M more than the President Obama, Vice President Biden, all 15 Cabinet Secretaries and the 9 Supreme Court Justices combined.

The value comparisons are obvious and this represents another obvious PR problem that the for profit insurers face.

More on this in upcoming posts..