health insurers

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Nonprofit Health Executives Reap Hefty Bonuses

WBUR’s Martha Bebinger reports that executives at the top three health insurers in the state have all won generous bonuses, some up to 245 percent of their salaries.

In the past three years, executives at the state’s three largest health insurers — all nonprofits — have received bonuses that range from 14 to 245 percent of their salaries. The payments are generally less than bonuses paid by for-profit insurance companies. But amid an outcry about paying nonprofit insurance board members, these bonuses are raising more questions about what it means to be a nonprofit health insurance company in Massachusetts.

The Massachusetts Hospital Association says the average bonus for hospital executives across the state is under 20%.

Here, you can see compensation for executives at Blue Cross Blue Shield, Harvard Pilgrim Health Care and Tufts Health Plan from 2008-2010:



Cost Hike: Levy Blames Insurers For Lack Of Efficiency, Insurers Fight Back

Paul Levy, the perpetually newsworthy CEO of Beth Israel Deaconess Medical Center, makes a crisp argument today blogging about the rising cost of health care.

Levy says while insurers often whine about the “underlying rise in medical costs” as the key driver of higher health insurance premiums, there is, in fact, another critical culprit: outsized administrative expenses racked up by the major health insurers, on average about 9.3 percent annually.

Levy’s Exhibit A is a February 2010 report issued by the state Division of Health Care Finance and Policy on premium levels and trends in the private insurance market:

“How can this be the case?” Levy wonders. “In other financial services industries, unit costs of transactions have gone down, not up. What is it about health care that suggests the opposite should be the case?”

Not to be outdone, the Massachusetts Association of Health Plans gave me a fairly lengthy response. Touche:

Reducing administrative expenses in health care is important and efforts are underway, but those costs are not what is driving health plan premiums. More to the point, talking about administrative costs distracts from focusing on the the major cost driver, which is escalating medical expense. Continue reading