Increased Premiums, Incentive Trips, New CEO

I know many of you are probably aware of what happened yesterday at Blue Cross Blue Shield of North Dakota. Their board voted to replace President and Chief Executive Officer Mike Unhjem. This move came after BCBS made the front page of the Forum last week for sending their employees to the Cayman Islands.

If there has been one thing that has happened locally during this semester that can be considered a PR nightmare, I have to say this one takes the cake. Being associated with BCBS is going to be extremely controversial and difficult over the next few months as they try to recoup the area’s trust and respect.

Before I go any further, I would like to say that I know Mr. Unhjem; I work closely with him on many United Way projects. I cannot imagine him doing anything that would jeopardize the respect and trust that the public holds for BCBS. So, if I seem to be a little irritated that they fired him, please let my above statement speak to that emotion!

This whole thing goes back to 1986, when BCBS sent board members on an all expenses paid retreat to a posh resort. They received flak back then for using policyholders’ money to fund something that could have been held in state.

Now, 23 years later, BCBS is back under the microscope for sending top-performing employees to the Cayman Islands. It has been reported that $250,000 was budgeted for that trip, even though there have been rumblings about the need to increase policyholders’ premiums.

Let’s face it; we all know what a stupid mistake this was. You cannot tell your policyholders that their insurance company is going to come up short at the end of the year so they need to increase their premiums AND then send people on vacation! No matter which way you crunch the numbers, it just doesn’t compute.

The icing on this financial mess is Mr. Unhjem’s salary, a whopping $664,000 a year (coincidently, what Mr. Unhjem made in 2005 is the same amount that BCBS raised during their United Way campaign in 2007-08). In this difficult economy, I am sure this number also played a big part in the board’s decision to let him go. If Executive Vice President Tim Huckle will step up and do the job for the interim, BCBS can save some money.

As I said before, the next few months will be hard going for BCBS. They will be looking for a new President and CEO, working on a campaign to raise premiums, and trying to regain the trust and respect of the area. Sounds like a pretty hefty PR package to deal with by January 2010. Unfortunately for them, they will be doing all this hard work without the hopes of an all expenses paid trip at the end of it all!