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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