Are WellPoint execs greedy?

September 19, 2008
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Three activist groups dropped off a wallet and handbag crammed with play money at WellPointâ??s front door this week to protest what the groups say are outrageous salaries pulled down by company executives.

The groups â?? Health Care for America Now, Hoosiers for a Commonsense Health Plan and Central Indiana Jobs With Justice â?? also inducted CEO Angela Braly and her predecessor, Larry Glasscock, into their first â??Hall of Shameâ?? for accepting huge compensation at a time many Americans canâ??t afford health insurance.

Braly knows that if she doesnâ??t thicken WellPointâ??s bottom line and ultimately its stock price, the directors will find someone else who will. Execs also have defended their freedom to receive compensation in line with market norms.

In other words, companies and executives are reacting to market forces. And they might be able to build a case that paying for top talent is helping hold down health care costs.

Is it unfair for executives to make a lot of money at a time when health insurance has become prohibitively expensive for many? Moreover, do you see a link between executive compensation and the cost of health insurance?
  • The Wellpoint board of directors must think that their CEO is worth the money she is paid. What incentive would they have to pay the CEO more money than she is worth? That hurts the profits of the company and therefore hurts their shares.

    Why do people get upset that a CEO makes so much money? They run a huge corporation and are under tremendous pressure by their stockholders to continue to make this company profitable. If they don't they get ousted.
  • It is absolutely impossible to expect these CEOs and insurers in general to serve two masters - insureds and stockholders. What is good for one in inherently bad for the other. Unfortunately, the emphasis is always on the stockholders. As long as insurers are private, for-profit entites being publically traded the goal will continue to be generating huge profits rather than providing meaningful health benefits at a reasonable cost. It is absurd to think that the excessive salaries and compensation plans being given to these executives does not have a direct impact on the high cost of healthcare. Where to you think the money comes from, Santa?
  • Wellpoint employees generally fill the top of the list of best-paid Hoosier workers. Maybe that's why.
  • What is absurd is that some people think that this is a zero-sum game. There must be losers and winners. But Wellpoint became successful because people purchased its insurance. So people must have been happy with this company in order to do so. These people benefited by purchasing insurance they felt was worth the costs. People don't buy things if they think something is priced too high. Wellpoint benefits because they sold the inruance at a profit that other people were willing to buy. Companies don't sell products if people think they are priced too high. Therefore both buyers and sellers benefited from this mutual exchange of resources in the marketplace.
  • The problem is when a health insurance company becomes for profit and that encourages them not to pay claims. They will deny a claim for no reason in hope the providers office will not fight or appeal the denial. They will approve a procedure and then pay all services surronding the procedure but not pay the biggest part. ANN TRUST ME, it is not a modifier issue. Some payers actually have a percentage of denials they shoot for in hopes they are not fought. Or they will say after the claim was sent via EDI and then via paper they NEVER received it!

    Give me a break, it is greed! Just fight their denials or find someone with the expertise that can help you.

    We increase premiums 20-30% per year even though we had a billion or more in profits! Then they buy more companies so they can continue the trend. If you think the oil companies are greedy how can you not thing the insurance companies are not greedy?????

    Let's make billions off the back of the sick and that is ok to some of you? I wonder if you are paying your premiums in full without employer assistance?

    I have worked inside those big glass building and I have heard how it works so say what you want but it is greed. I do not beleive an insurance company should be a publically traded company!
  • Norm, do you honestly feel that any company in this day and age has owners or CEOs that are not greedy? I will challenge you to find one. That is your challenge this week. Find one CEO or owner who is not greedy. This is why Obama's message of wealth redistribution is so popular to the average working American. Norm, who ever you work for or whoever owns the IBJ is undoubtedly of the same greedy mindset as Wellpoint management. You don't have to look that far from home.
  • Glascock and Braly seem to be small compared to what Schaeffer walked away with when he left Wellpoint. See clips below.

    WellPoint Chair and CEO Leonard Schaeffer had a change of control clause in his contract in case of a merger. Although Schaeffer would stay on for two years with the newly merged company as chair, he would lose the CEO role to Anthem's Larry Glasscock, thus opening his golden parachute.

    According to SEC filings, Schaeffer would receive $27.5 million in severance pay and a special executive pension with an added boost of $10.5 million. He could cash in stock shares and options estimated at about $250 million, with early vesting as soon as the merger closed.

    His special executive retirement plan (SERP), valued at about $45 million, would be paid all at once soon after he left WellPoint. Schaeffer would also get country club memberships for 48 months and financial counseling, office space and secretarial support for five years.
  • I know that some people out there feel You Earn it - You Keep it. and that is not just the rich. Some people i know (like my barber - who has to work two jobs to keep afloat) also feels the same way.

    I am not saying that we should tax the rich to death. I just would like some equality. If we tax the middle and poor classes, lets also tax the rich an equal percentage. If you get X amout/yr (including bonus) you should not be able to avoid taxes. Considering that you fill atleast (1 million) amount or more in for X.

    And Honestly, who really needs a million or more to live?
  • Just keep drinking the Obama kool-aid and we'll all be socialists before we know it. The incentives that used to exist will begin to disappear. But remember, those at the top (Obama) will always find a way to take care of themselves.
  • Pete: The IBJ is not about sick people needing medical care. Many companies cannot afford medical care for their employees because of the high premiums and it appears a lot of those dollars go to pay the high price executives. And individuals our lucky if they can get covered even if the have the smallest of illness. The pressures someone spoke of come above more from being publically traded that spending time helping their premium payers with their health issues and how to get them the best care. Or examinig the physicians they let in thier networks who can't run the appropriate test and then analye them and help find the issues. They all want to push antidepressants if you say you say you hurt but they cannot quickly find the answer. Our medical schools do not appear in most cases to be preparing the new graduates to be problem solve. I had high blood pressure from 22-43 until a nephrologist sugeested adding a scond medication. He was the first to do so as I guess I was too young to have uncontrolled HBP!

    There are many issues but insurance prices and trick like random denials make it even worse! To program a computer tpo automatically reject certain claims or to close the claims line during the day to train the claims personal how to deny certain claim in hopes they will not be appealed is a crime.

    Take them off the stock market as public companies and DO NO let the goverment take them over but give the common person a place to go when a certain insurance company continues poor practices!

    They should consider putting together a special team of doctors for unique issues and allow the necessary tests be run without question instead of the clueless running hundereds of tests with little results. Many doctors refuse to beleive a test unless they perform it pushing the prices higher as well.

    On the other hand, most doctor are paid poorly and people do not beleive it because they are clueless. Price malpractice insurance which goes up every year with rent while their reimbursement continues to be cut every year so insurance profits look even better.

    Yes, I have been around the industry in many capacities for years so I know much of this if not all to be factual.

    I am done for now!
  • leave town

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