By Brian McGrory
Globe Columnist / March 4, 2011
And now it comes down to Martha Coakley to stop the insanity, to prevent otherwise pretty good people from further embarrassing themselves in the health care debacle that has unfolded in Boston this week.
Specifically, it came to light yesterday that the 18 members of the Blue Cross Blue Shield of Massachusetts board of directors are paid anywhere from $58,000 to $90,000 a year — nice work if you can get it, though “work’’ is probably a stretch, given that it’s generally a meeting a month. Blue Cross is, of course, a nonprofit. That board just paid $8.6 million to the recently departed chief executive deemed unworthy of his job, with close to $3 million more to come.
But really, let’s keep blaming pharmaceutical firms for soaring health costs.
The problem goes beyond Blue Cross, to include all four major health insurance providers in Massachusetts. All four are not-for-profits. All four pay their boards of directors. They are, but for the exception of one utility, the only nonprofits in Massachusetts to pay their boards.
Let’s not mince words here. What they’re doing is taking your co-pay money, your payroll deductions, your hospital deductibles, and whatever government money, and giving it to a group of downtown types whose expertise on health care, for the most part, goes no further than their regular trips to the spa.
Even more infuriating is the fact that, in paying the outrageous director fees, these providers are putting tens of thousands of dollars into the bank accounts of key decision makers all over Boston — money being a time-proven lubricant to an awful lot of good will. All this is set against the backdrop of our governor launching a discussion about containing health care costs in a state where health care is a dominant industry.
So the senior members of the Massachusetts AFL-CIO, Bob Haynes and George Alcott, are collecting $72,000 and $62,000 respectively to serve on the Blue Cross board — a revelation first reported in yesterday’s Herald. The chairwoman and chief executive of the Greater Boston Chamber of Commerce, Gloria Larson and Paul Guzzi, are getting even more. As part of their pay package, directors at Blue Cross also get the option of heavily subsidized health insurance.
Blue Cross is but the most brazen in terms of the pay and the prominence of the directors. But Harvard Pilgrim Health Care, Tufts Health Plan, and Fallon Community Health Plan are in on the act. Harvard Pilgrim, for example, pays between $22,000 and $68,000 a year for Barry Shemin, the board chairman. Tufts pays between $19,500 and $36,500. Among its board members: strategist Thomas P. O’Neill III and Wheelock College president Jackie Jenkins-Scott.
In contrast, no college or university in Massachusetts pays its board. No hospital pays its board. The health plans, though, say they’re different.
“We compete for directors with other large similar-sized companies in Massachusetts, which pay their directors,’’ said Jay McQuaide, a Blue Cross spokesman. “Paying compensation allows us to attract and retain the highly skilled and savvy professionals that we need.’’
Skilled and savvy? They gave departing CEO Cleve Killingsworth, a guy deemed not worthy of the job, $11 million — the equivalent of $500 from 22,000 members.
Therein lies the problem with boards. They’re supposed to provide oversight, but too often it’s the same people tossing money at each other to serve on the boards of each other’s companies, the operative word always being, “Yes!’’
Enter Coakley. Two years ago, her investigators were looking at the obscene pay package given to departing Blue Cross CEO William Van Faasen when they took note of director pay. The AG’s office has forcefully asked each provider to justify it, and so far, according to one official, Coakley is not happy with the answers.
Two weeks ago, the four plans were given one final chance to state their case before Coakley takes action. Here’s their problem, though: Money talks, and it doesn’t always say nice things.
Brian McGrory is a Globe columnist. He can be reached at mcgrory@globe.com.
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