VIEWPOINT: Blues board takes strong actions

GRAND FORKS -- In recent weeks, much has been said and written about the issues raised by the state insurance department's audit of Blue Cross Blue Shield of North Dakota. Some of it has been accurate, and some of it has not.

That's not surprising. Health care -- and how you use it and pay for it -- is a complicated matter.

But one thing on which we all agree is that change is in order.

Since last spring, the BCBSND board has made important changes, beginning with the hiring of a new president and CEO, Paul von Ebers, who officially assumed the company's top post in August.

We also have significantly changed the way we operate as a board. Even before we received the audit findings, we had begun to address some of the issues that it raised.

Two questions that we, as board members, have heard most often are "Where was the board oversight?" and "What are you going to do about all this?"

I appreciate the opportunity to address both those questions.

The role of the BCBSND board has been a traditional one: to exercise oversight, provide strategic direction and monitor corporate executive performance. It has not been, nor should it be, to manage day-to-day operations.

Additionally, during the period examined in the audit (and, in fact, for years), the company continued to operate extremely well overall and was in fact held up as a "model" in the industry, which is not typical if there are significant leadership issues.

BCBSND's administrative costs are among the lowest in the nation. Our members' premiums are the lowest in the nation for comparable coverage. The company pays 97.6 percent of all incurred group claims and consistently gets high customer satisfaction rankings.

It was and is doing many things right.

That said, there were some concerns, both in 1995 and more recently. As a governing body, we made what we believed were the best decisions, with the knowledge we had at the time and relying on outside counsel for specific legal issues as necessary.

But we also came to realize that we needed to make some changes, both in terms of our policies and in the amount of oversight exercised by the board.

Once those decisions were made, we took immediate action, beginning with the termination of the former president and CEO and the hiring of a new one.

The board also has adopted a seven-point plan to improve governance processes and create more checks and balances to allow for more oversight. It specifically addresses compensation, Pay-at-Risk, employee benefits, fringe benefits, investments, executive resignations and severance.

Herald readers can learn more about the plan at www.bcbsnd.com/blueinsight/2009/09/17/seven-point-plan/ .

Included in its actions, the board:

-- Discontinued marketing incentive trips.

-- Is reviewing executive salaries and board compensation.

-- Revised corporate travel policies.

-- Changed its corporate contribution policy and now must approve any donations of more than $5,000.

-- Established a new policy of uniform events for all employee retirements.

-- Requires that all CEO recommendations for executive staff hiring, promotion, separation and severance be approved by the board.

-- Reached an agreement with its new president and CEO that includes actions, policies and procedures that related directly to oversight, lines of authority and checks and balances of power.

As BCBSND board members, we are committed to serving our members by making sure their premium dollars are well-spent. It is a responsibility we take very seriously.

We will continue to listen and address any issues as they arise, and we welcome feedback as we work to restore trust and ensure continued access to high-quality, affordable health insurance for the people of North Dakota.

Elbert is chairman of the BCBSND board of directors.