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Group Health Cooperative Leads the Pack in Executive Compensation

Scott Armstrong, its president, earned $2.6 million last year, while Mark Ganz, president of Cambia Health Solutions was very close behind at $2.5 million.
May 27, 2016

Nationwide, health insurance executives command million dollar salaries, but the same holds true in the Pacific Northwest where there’s no shortage of highly paid CEOs.

The Lund Report found that Washington state executives definitely commanded higher paychecks than their Oregon counterparts last year. In fact, only Jack Friedman, who retired as CEO of Providence Health Plan, passed the million-dollar mark ($1.1 million, +85%).

Scott Armstrong, the president and CEO of Group Health Cooperative, a Washington-based plan that’s being acquired by Kaiser, earned $2.6 million, while other key executives including Christopher Knackstedt, Rick Dale Woods, Robert O’Brien and Mark Szalwinsk commanded salaries of $1 million and more last year.

In total, Group Health paid its top 10 executives $10.5 million last year compared to $8.3 million the previous year.

At the national level, Kaiser rewarded its executive vice president and group president Benjamin Chu with a $6 million paycheck, while Bernard Tyson, CEO and president, took home $5.9 million, and eight other executives earned between $1.6 and $2.9 million.

Kaiser is awaiting approval from Washington’s Insurance Commissioner to take over Group Health with public hearings scheduled later this summer. Once that merger is completed, Kaiser intends to fund a $1.8 billion healthcare foundation. With this deal, Kaiser will expand its health plan membership by 6 percent, plus add an eighth market to its operations in California, southern Washington, Colorado, Georgia, Hawaii, Maryland, Oregon, Virginia and Washington, D.C. It left Ohio in 2013.

Group Health has 590,000 members, and, with 25 percent of the market, is tied for second place with Molina Health, the state’s largest HMO, which commands 35 percent of the market. Group Health generated $3.7 billion in revenue during 2015, including its clinics, specialty medical centers and one hospital.

Premera Execs Made Out Well

Lower profits didn’t turn into lower paychecks for the executives at Premera BlueCross, which saw its net income fall to just under $13 million last year from a high of $66 million in 2014. At the same time, its membership reached 795,598, representing an 8 percent growth in

Washington, while Premera decided to leave Oregon (LifeWise Health Plan) following a 22-year run.

Premera also confirmed that it has reduced its workforce, laying off 165 employees in a strategic reorganization move.

How did Premera’s top executives fare last year? They all received salary increases – with Jeffrey Edward Roe, principal executive officer ending the year with $1.7 million, a whopping 69 percent increase, followed by Yoram Milo, secretary, earning $1.4 million (+7%), Kent Steven Marquadt – principal financial officer, $1.3 million (+5%) and Dr. Rakesh Tarum Chauhan, senior vice president, $1 million (+57%).

In total, Premera paid its top 10 executives $10 million in 2015, compared to $7.8 million the previous year.

Community Health Plan of Washington

None of the executives at Community Health Plan walked away with million dollar salaries last year. Lance Kirk Hunsinger, CEO, earned $804,599 (+4%), while the rest of his management team saw their salaries take a nose dive, including Stacy Ann Kessel, CFO, at $352,188 (-16%), Marilee Kay McGuire, COO, $384,488 (18%), Alan Reed Lederman, CAO, $329,747 (-20%) and Dr. Victor Alan Collymore, CMO, $391,448 (-16%). All told, the top 10 executives brought home $3.6 million, a slight drop from their 2014 salaries which reached $3.4 million.

Molina Health Care of Washington

Peter Adler, principal executive officer, earned the highest salary at Molina Health Care last year, $676,178 (+16%), followed by Frances Gough, chief medical director, $366,565 (+14%); Dr. Sankara Sidat-Singh, medical director, $337,812 (+5%) and Laurel Lee, chief operations officer, $330,903 (-7%).

Together, the top 10 executives earned $3.6 million last year, compared to $2.7 in 2014.

Regence BlueShield of Washington

Donald Antonucci, president of Regence BlueShield, took home $711,861 last year as the highest paid executive, followed by Inderpal Bhandar, chief data officer at $429,317, while Michael Burton, vice president of account management, earned $339,401.

Regence BlueCross BlueShield of Utah

Its president, Jennifer Danielson, earned $578,894 in 2015, a tremendous boost from her $441,412 salary the prior year, and David Lemperle, vice president of sales saw his compensation increase to $284,714 (+10%).

Cambia and Regence Executives

Mark Ganz, CEO and president of Cambia Health Solutions, the parent company of Regence plans in Oregon, Washington, Utah and Idaho, saw his overall compensation decrease slightly in 2015 – taking home $2.5 million, representing a 4 percent decrease. However, that figure does not include compensation earned from the Regence Health Plan in Idaho because that state is barred from releasing executive compensation.

Vincent Price, principal financial officer, earned $1.5 million in 2015, along with Jared Short, chief operating officer, while Kerry Barnett, who left Regence to in April to become CEO of Saif Corp. ended up earning $1.1 million in his capacity as the executive vice president of corporate services.

Here’s a list of the compensation paid to Oregon health insurance executives last year:

  • Jack Friedman, CEO of Providence Health Plan, $1.1 million (+85%).
  • Robert Gootee, CEO of Moda Health and ODS Dental Plan, $730,665 (+16%).
  • Majd Fowzi El-Azma, CEO, LifeWise Health Plan, $562,537 (+1.4%)
  • Angela Dowling, Principal Executive Officer, Regence BlueCross BlueShield, $429,732 (+5%)
  • Dawn Bonder, CEO, Health Republic Insurance, $253,472 (+47%)
  • Ken Provencher, CEO of PacificSource Health Plans, $252,235 (-8%).
  • Dr. Ralph Prows, CEO, Oregon Health CO-OP, $216,733 (-29%)

Diane can be reached at [email protected].

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