PDF: BlueCross compensation chart
By the numbers
$59.4 million — Net gain for 2008
$29 million — Investment loss last year
$16.5 billion — total claim dollars paid out
59.5 million — Number of claims paid
3 million — Number of Tennesseans served
Source: BlueCross BlueShield of Tennessee
Investment losses bled $29 million from Tennessee’s biggest health insurer in 2008, cutting the profits for BlueCross BlueShield of Tennessee to the lowest level since 2001.
But according to company filings with state insurance regulators, BlueCross’ top brass took home bigger paychecks in 2008.
Last year’s bonuses and pay raises reflect the near-record year for profits at BlueCross in 2007. After boosting BlueCross statutory reserves above $1.2 billion at the end of 2007 — $443 million above the state-required minimum — the pay for BlueCross CEO Vicky Gregg rose nearly 40 percent last year to more than $2.1 million.
Other BlueCross executives got smaller, double-digit increases in pay, according to filings with the Tennessee Department of Commerce and Insurance.
BlueCross spokeswoman Mary Thompson said executive compensation at the Tennessee BlueCross plan is set by outside directors based upon comparisons with other health insurance companies.
“It is critical to our state — and Chattanooga — that BlueCross performs well,” Ms. Thompson said. “BlueCross has compensation levels that are in line with the national average.”
Chattanoogan Lamar Partridge, chairman of the 16-member BlueCross board, praised Ms. Gregg’s leadership of BlueCross, which is Chattanooga’s biggest private employer and the medical insurer for nearly one of every two Tennesseans.
“During her six years at the helm, Vicky has assembled a talented and high -performing senior leadership team, which has doubled revenues and market share,” Mr. Patridge said. “These are accomplishments which have made BlueCross financially strong and positioned it to serve the long-term needs of our customers."
But like other insurance companies, BlueCross fiscal health was hurt by the drop in stock and real estate markets last year. The Chattanooga-based firm made more than $101.5 million on its investments in 2007, helping to boost BlueCross profits in 2007 to $172.8 million. But last year, BlueCross ended up losing $29 million on its investments, lowering the company’s net income in 2008 to $59.4 million.
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Staff Photo by Dan Henry Work continues on "the forest", a green space that includes a reflection pond and shrubbery located between buildings 3 and 4 at the new Blue Cross Blue Shield campus on Cameron Hill.
“Investment losses have hurt all insurance companies and really accounted for most of the drop in income for BlueCross of Tennessee last year,” said Jane Dubose, director of health plan analysis for HealthLeaders-InterStudy, an industry analysis firm. “Net income is down for practically all plans last year.”
Nonetheless, BlueCross managed to hold down the rate of increase in medical charges last year. Changes in company plans, including higher deductibles and premiums for members, helped reduce the average rate renewal increase after adjustments in 2008 to 6.3 percent, compared with a 7.3 percent increase in 2007 and an 8.1 percent increase in 2006.
“In 2009, BlueCross and other insurers are likely to do better with their investment income,” Ms. Dubose said. “But unfortunately, there is also a lot of cost pressure from hospitals and other providers who are being hurt by the rise in uncompensated care.”
"Investment losses bled $29 million from Tennessee’s biggest health insurer in 2008, cutting the profits for BlueCross BlueShield of Tennessee to the lowest level since 2001."
I thought they were "non-profit"
Amazing how companies can continue to justify pay raises for executives in the face of beyond significant losses. Common sense tells you if the company does well, pay goes up otherwise not, guess that is not the corporate method in America. Certainly makes HR-676 for Single Payer Universal Care look more pallatable. Of course, with all the insurance lobbyists parked in DC this is not going to happen.
I work for Blue Cross. Most of us have not had a raise in years, even though we do get quarterly "incentives" based on how well the company is doing. My last incentive check was laughably small.
The grunts here are outraged at finding out the amount of Mrs. Gregg's raise. We would have much more respect for her if she'd taken a moderate raise (or none) and donated the rest to charities, to help out during this recession. I have no idea how she thinks this won't negatively affect her image, nor the company's, for that matter.
What happens to the Blue Cross Taj Mahl under National Healthcare? Could Cameron Hill Apartments be in our future once again.
In response to Sailroman's comment, BlueCross BlueShield of TN is a "non-for-profit" which is different than a "non-profit" a.k.a 501(c)(3).
Non-profits are exempt from many types of taxes. But they are also prohibited from some things such as lobbying or endorsing a candidate. Some people sometimes think the fact that Churches aren't allowed to endorse candidates is a violation of their free speech. Well it's not. A church is free to endorse any candidate they want, they just have to give up their non-profit status and change to a "non-for-profit" a.k.a 501(c)(4). It's a privilege to not pay taxes, not a right.
In the bigger picture, the extra $1 million Vicky Gregg gets is a drop in the bucket. If paid to the 4,000+ employees it would be a mere ~$300 a year and pennies for consumers. Is it money she deserves? Depends on how you look at it.
BlueCross owns 60% of TN market share and has stamped out most competition making Cigna and United look like weak and bad options. In that respect maybe she has done well for the company, but what's good for the company is not necessarily good for the consumer.
And in response to Oz, no those new buildings are there to stay. Under a single payer system or any other form of socialized health care, BlueCross, United, Cigna and all the other giants would become government contractors. They would fight for bids for the new systems just like they do now for medicare.
We'd still have all the same problems we currently have with health care companies, only they'd be contracted through and have the authority of the Federal Government.
In response to the Blue Cross employee. I, too, am a Blue Cross employee and am very grateful for my job with such a stable company. I make a very generous salary in relation to other jobs in this field. More than 50% of our bonuses are based on our individual performance so since I do my job to the best of my ability, my bonus is not paltry. This is America, we are free to leave a job that we do not feel is right for us and I gaurantee that there would be a 100 people lined up to take that job in the morning. Try working at Convergys or Cigna and see how much better we have it here.
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