How ironic that this news item pops up the week of the supposed deadline to buy insurance:
BOSTON, Mass. – November 16, 2007 – The former CEO of the state's largest health insurer walked away with $19.4 million last year.
When he left Blue Cross and Blue Shield of Massachusetts, William van Faasen received most of that money – $16.4 million – in a retirement package. He got the balance for his work as Chairman of the Blue Cross Board.
Just goes to show: Out-of-control health care costs for most of us = big windfall for someone else. Nowadays, the great sucking sound we hear is money going up the health care food chain. We pay ever-higher premiums, and property taxes to pay for muni employees' health care, and so forth; van Faasen hits paydirt. Yeah, it's that simple.
Do listen to the audio clip to hear BCBS's flack talking about a.) what a great job Van Faasen did controlling costs (hah!), and b.) how you've got to pay through the nose to attract “top CEO talent” or some such.
Well, first of all, it's not all that clear that you get that much better talent with that much more money. Costco's CEO disputes that, for instance. What's the marginal value of, say, the last $15 million of that payout? Was van Faasen that much better than someone who would have taken, say, $4 mill to go away?
Even more to the point, all the big health care plans in MA are not-for-profits, supposedly structured to provide a public service, not provide shareholder value. Blue Cross is paying for the wrong kind of person by throwing around that kind of megabucks. By flashing big bling, guess whom you're going to attract? The kind of person who really, really likes big bling. You're not necessarily going to attract people who are interested in providing a valuable public service — which is what being a non-profit is all about, right? I can understand a salary that provides for a quite comfortable life, but people are motivated by different things. And after all, we seem to have no shortage of people running for President, even at a measly $400,000 a year.
I'd just like to see if we could get away without our health plans buying into executive compensation insanity. I really wonder if things would fall apart.