Blue Cross Board Members' Pay Suspension Will Not Fix Rising Healthcare Costs

The decision by Blue Cross Blue Shield of Massachusetts board members to suspend their payments will do little to fix soaring healthcare costs, according to a Boston Globe report.

Blue Cross Blue Shield of Massachusetts "substantially reduced" the compensation of its new CEO and indefinitely suspended the fees paid to its board of directors following massive criticism over the $11 million severance package paid to former CEO Clive Killingsworth.

According to the report, U.S. healthcare spending increases have been driven by three main areas in recent years: hospitals, physicians and prescription drugs. The three areas accounted for 62 percent of the cost increase from 2004-2009. Administrative costs such as board pay, on the other hand, accounted for 5 percent of the cost increase — and Massachusetts health insurers spend less on administrative costs than the national average.

Blue Cross CEO Andrew Dreyfus told the Boston Globe he is worried that a focus on executive and director pay will distract providers, policy makers and insurers from addressing the real problem areas — those factors that account for two-thirds of healthcare cost increases. Massachusetts Attorney General Martha Coakley found in a report last year that price increases by providers accounted for 90 percent of the growth in Massachusetts healthcare costs from 2006-2009.

Read the Boston Globe report on Blue Cross pay.

Read more on the decision to suspend Blue Cross pay:

-Two More Health Insurers Rethink Board Pay Following Blue Cross Decision

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