
{"id":59,"date":"2007-03-29T09:55:25","date_gmt":"2007-03-29T17:55:25","guid":{"rendered":"http:\/\/www.carrborocitizen.com\/main\/2007\/03\/29\/flux-up-yonder\/"},"modified":"2007-03-30T05:33:05","modified_gmt":"2007-03-30T13:33:05","slug":"flux-up-yonder","status":"publish","type":"post","link":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/2007\/03\/29\/flux-up-yonder\/","title":{"rendered":"Time for Blue Cross to act like a non-profit"},"content":{"rendered":"<p><strong><em>By Adam Searing<\/em><\/strong><br \/>\nN.C. Justice Center&#8217;s Health Access Coalition<\/p>\n<p>Nearly $190 million. That\u00e2\u20ac\u2122s the just-released annual \u00e2\u20ac\u0153profit\u00e2\u20ac\u009d of \u00e2\u20ac\u0153nonprofit\u00e2\u20ac\u009d NC Blue Cross Blue Shield, NC\u00e2\u20ac\u2122s largest health insurer. $3.1 million. That\u00e2\u20ac\u2122s the latest annual compensation for Blue Cross CEO Bob Greczyn. In fact, when you add in this year\u00e2\u20ac\u2122s nearly $600,000 raise, Mr. Greczyn has seen a 261 percent rise in his income at Blue Cross since the year 2000. The typical North Carolina worker, whose premiums make Mr. Greczyn\u00e2\u20ac\u2122s outsize salary and profits possible, has seen a 1.7 percent drop in yearly wages over the same period of time.<\/p>\n<p>NC Blue is hardly acting like a nonprofit organization anymore. Compare Mr. Greczyn\u00e2\u20ac\u2122s pay with three much larger for-profit companies: Whirlpool, UPS and GlaxoSmithKline.  NC Blue Cross operates only in North Carolina and employs about 4,500, mostly in Chapel Hill and Durham. Whirlpool, the global manufacturer of home appliances, had sales of $19 billion and employs 80,000 people worldwide. Whirlpool CEO Jeff Fettig made $3.2 million in 2005. UPS made $42.6 billion delivering packages in 2005 and employs 427,700 people worldwide. UPS CEO Michael Eskew made $3.1 million in 2005.<\/p>\n<p><!--more--><\/p>\n<p>Super-profitable drug maker GlaxoSmithKline, whose worldwide operations employ over 100,000 people, paid CEO Jean-Pierre Garnier $5.4 million in 2006.<\/p>\n<p>Despite appearances, NC Blue Cross is still a nonprofit organization that was created\u00e2\u20ac\u201dto quote a line from a 1968 history published by the company\u00e2\u20ac\u201das a \u00e2\u20ac\u0153community project whose motive was never pecuniary gain for those who promoted it.\u00e2\u20ac\u009d  In fact, the Duke Endowment, now the largest philanthropy in North Carolina, thought the idea of Blue Cross so worthy that it contributed the original $25,000\u00e2\u20ac\u201dan enormous sum in 1935\u00e2\u20ac\u201dto start the organization. Over the years, a governor championed the Blue Cross cause and state taxpayers chipped in with direct help, in addition to enormous tax breaks, to help the nonprofit acquire more members. Other important North Carolina philanthropists made huge contributions.<\/p>\n<p>What would the public-spirited community leaders who created the company in the 1930s to help folks pay their hospital bills think of the organization now?  Certainly the Duke Endowment wouldn\u00e2\u20ac\u2122t dream of making another grant today to boost Mr. Greczyn\u00e2\u20ac\u2122s salary and other executive compensation even more. Can one imagine a North Carolina governor encouraging North Carolinians to join Blue Cross so that their profits could reach even higher historical levels? And what about state taxpayers?  Although the tax breaks given to NC Blue are now gone, can one imagine taxpayers wanting to contribute even more money beyond their premiums to fund an executive suite that now boasts four executive salaries that crack the million\u00e2\u20ac\u201cdollar level?<\/p>\n<p>Blue Cross\u00e2\u20ac\u2122s response to this criticism?  \u00e2\u20ac\u0153We are now taxed like any other for-profit health insurer,\u00e2\u20ac\u009d they say.  They then argue they can\u00e2\u20ac\u2122t be held to a higher nonprofit standard because \u00e2\u20ac\u0153the company has changed.\u00e2\u20ac\u009d  Putting aside whether Mr. Greczyn\u00e2\u20ac\u2122s compensation even makes sense in the for-profit world, this argument avoids a central truth about Blue Cross.<\/p>\n<p>The company didn\u00e2\u20ac\u2122t become the largest insurer in North Carolina by accident.  It is so huge and so strong today precisely because of those years of work and contributions by the public and community leaders. Without decades of help from the public and nonprofit institutions, Blue Cross would not have a virtual monopoly on the individual insurance market and a near-monopoly in the small-business market.  Blue\u00e2\u20ac\u2122s market position enables the huge profits and gigantic compensation packages.<\/p>\n<p>While Blue Cross remains a nonprofit, the spiraling profits and outrageous executive compensation packages cry out for legislative intervention. The North Carolina General Assembly should move to give state Commissioner of Insurance, Jim Long, authority to rein in unreasonable executive compensation and the ability to direct excess profits back to Blue Cross policyholders in the form of premium rebates. While this is no panacea for the overwhelming health care problems facing our state, it at least is a move to correct one of the most blatant examples of health care profiteering by a company whose founders would shudder in horror if they could see what their efforts have created.<\/p>\n<p><em>Adam Searing is the project director of the N.C. Justice Center\u00e2\u20ac\u2122s Health Access Coalition. He was resident of Carrboro until last year, but swears he\u00e2\u20ac\u2122s moving back someday. <\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Adam Searing N.C. Justice Center&#8217;s Health Access Coalition Nearly $190 million. That\u00e2\u20ac\u2122s the just-released annual \u00e2\u20ac\u0153profit\u00e2\u20ac\u009d of \u00e2\u20ac\u0153nonprofit\u00e2\u20ac\u009d NC Blue Cross Blue Shield, NC\u00e2\u20ac\u2122s largest health insurer. $3.1 million. That\u00e2\u20ac\u2122s the latest annual compensation for Blue Cross CEO Bob Greczyn. In fact, when you add in this year\u00e2\u20ac\u2122s nearly $600,000 raise, Mr. Greczyn has&#8230;<\/p>\n","protected":false},"author":12,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-59","post","type-post","status-publish","format-standard","hentry","category-opinion"],"_links":{"self":[{"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/posts\/59","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/comments?post=59"}],"version-history":[{"count":0,"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/posts\/59\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/media?parent=59"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/categories?post=59"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/tags?post=59"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}