October 11, 2009-Fargo Forum Editorial

Editorial: No more punches in the gut?

In the past couple of months, Blue Cross Blue Shield of North Dakota has been poked in the eye, slapped up side the head, rapped on the knuckles and punched in the gut. Deservedly so, we might add.

The state’s largest health insurer was found to be living a tad too high off the corporate hog at a time when the economy was tanking and the high cost of health care and health insurance was making headlines.

When a sweet-deal golden parachute for a fired president/CEO and a fat executive pay/bonus system were reported by The Forum, the company went into full-scale damage-repair mode. With some initial success, we might add.

It appears – and sometimes appearances can be deceiving – the company is doing all the right things to clean up a public relations mess and satisfy directives for change ordered by North Dakota Insurance Commissioner Adam Hamm. Aimed specifically at ensuring Blues’ expenses benefit members (policyholders), Hamm’s directives came after his department concluded that the company misspent millions of dollars of health insurance premiums. The questionable expenditures included executive compensation and

travel, two categories that set policyholders’ teeth grinding.

New management at the company, led by chief executive Paul von Ebers, has adopted (again, what appears to be) a transparent and cooperative program to scrape tarnish off the company’s image and, more importantly, adopt reforms. In addition to taking to airwaves and print to present the company’s take, von Ebers and his team responded quickly and apparently completely to Hamm’s directives. (See Patrick Springer’s front-page article in the Oct. 6 Forum.)

If long-term follow-up conforms to intentions stated in responses to the commissioner’s directives, the changes will be significant, not only as they relate to executive pay, but also as an indication the company will be conducting business sans its previous extravagances. If at this time next year, the Blue Cross story is a non-story, the company’s management team will have succeeded.