The inforum.com recently published a story entitled "Blue Cross Blue Shield ND sales leaders rewarded with trip to Grand Cayman Islands resort." What was Blue Cross Blue Shield thinking?
It seems that the top sales staff, consisting of 35 employees and a guest, were awarded a trip to the Grand Cayman Islands. This little reward trip included an allowance for each employee and a guest of up to $6500, including $2000 for airfare, $1500 in cash, and $300 for hotel. I sure wish I could earn a trip like this and get spending money on top of it all!! A side note, the CEO also went on this trip. The total budget was up to $227,500. This figures out to about 90 cents for each policyholder.
Now this is all fine and dandy in previous economic times, but not a wise decision at the present. In fact, Blue Cross Blue Shield wants to increase premiums up to 18.3 percent for individuals who are not covered in a group, 11.4 percent for group coverage and 20 percent for college students.
Apparently Blue Cross Blue Shield had a $9 million loss last year just from operations. When investments are added into the loss, the total loss is $28 million.
After this bit of news was released, the back lashing started. Next I read in an article "Blue to ditch incentive trip" that the CEO will pay his own expenses. Oh, by the way, he was planning to pay for his expenses all along! While talking on a radio talk show he made the comment that he had determined before the show that he would cover his own expenses. I have my own opinion on that comment, but will keep it to myself.
The ND Insurance Commissioner, Adam Hamm, is now considering an audit of Blue Cross Blue Shield. He wants to delve into the executive compensation and the reward trip and get a complete picture of how these things are determined. Hamm states that "there doesn't seem to be any sacrifice on their side, the company side. That is where the anger and confusion comes in."
But, in an article by Mike McFeely of the in-forum.com called "Bad PR at heart of Blue's problems", Mr. Hamm has feuded with Blue Cross Blue Shield for years. McFeely indicates that the biggest losers in all this mess are the sales people. I guess I have to agree with that.
Didn't anybody think of what happened to the big automakers? Their bad decision of flying in a private jet to ask for money made big headlines, as well as the bad decisions by the big banks. Blue Cross Blue Shield spending big money on uxorious reward trips while asking for rate increases is not so very different!
I'm not sure who makes the decisions of taking these trips, but there's got to be someone in the offices with some common sense, doesn't there? I hope other companies are paying attention to this PR mess and take heed. You just don't spend money on non-essentials in the current economy and expect to get away with it. You wouldn't run your personal household that way, don't run a company like it.
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I have no idea how a company like this could do something so bad at a time like this. There is so many other ways you we can reward our employees for a job well done. This is something that not only gave Blue Cross and Blue Shield bad PR but I too also hope that similiar companies are learning from this huge mistake as well. I hope they as a company learn from this mistake that they have made. Yes I am sure the employees that received this trip are not compaining because no one would turn that down but they should use their common sense as well when they know what is going on with the ecomony.
ReplyDeleteWhat this situation makes me wonder is how long has this practice been going on? How many years were they giving these kinds of incentives and no one paid any attention? Or was this the first year? If it was the first year, how dumb can they be? I can't think of a worse time to implement such a lavish incentive. Of course, if I was on the receiving end, I'd love it, but from the PR standpoint of the company as a whole, it looks really really bad. Ask for 20% rate increase, and give that many employees such an expensive trip. It's bad enough that the CEO and other administration make such obscene salaries. And they are obscene. I don't care what logic you want to assign to those numbers.
ReplyDeleteIt is crazy to think that Blue Cross Blue Shield is wanting to up rates and at the same time use policy holders money to take such an expenisive trip. What go me was not only was the trip going to pay for the top sales people. It was also going to pay for part of a trip for a guest of each of the sales people. So not only do we have to pay for the wages of these people we also get to send them on vacation.
ReplyDeleteIf the top executives have the money to send thier top salesmen on a trip out of their own pocket then thats great. Otherwise I don't think they really need this trip. It really does make the company look bad. As an insurance company they don't seem to be caring about thier customers at all. I wouldn't want to be the PR person trying to deal with all of this.
This falls into the category of “what the heck were they thinking?”
ReplyDeleteIn this economic climate any company expenditures are closely scrutinized by the public and the media. Were they Ostriches? Did they not think that someone would mention this and the news would leak out? I have no idea how the CEO could think that this was a good idea – it’s a PR nightmare.
I wonder if this BCBS will be the next “Arthur Anderson” of this year. I am sure that the public outrage that the money being spent lavishly on trips will resonate all the way to the capital and cause the Attorney Generals Office to call for a full investigation.
This makes me wonder – if they can waste money on these trips, do you think that they have a commode made from Gold?