Health Insurance Executives Commanded Large Salaries in 2017
Health insurance executives earned hefty paychecks in 2017, according to records obtained from the insurance divisions in Oregon, Washington and Utah by The Lund Report. At the same time, several executives who retired last year, including Andrew McCulloch, regional president of Kaiser Permanente, walked away with a multi-million-dollar compensation package, along with executives from Group Health Cooperative in Washington following the merger with Kaiser Permanente in February 2017.
Mark Ganz, president and CEO of Cambia Health Solutions, which sells health insurance in the three-state region on behalf of Regence, saw his total compensation reach $3,400,915, representing a 21 percent increase since 2016. Regence also offers a health plan in Idaho, however those records are considered privileged and not available to the public.
Jared Short, second in command at Cambia as its chief operating officer, earned $1,797,306, a 20 percent gain from 2016, while Vincent Price, principal financial officer, took home $1,538,674 (up 22 percent), John Attey, chief legal officer, had a combined income of $918,800 (up 7 percent) and, Dr. Richard Popiel, executive vice president of health services and chief medical officer, earned $826,104 (up 7 percent). All of their compensation included bonuses and other compensation.
Andrew McCulloch, who stepped down as regional president of Kaiser Permanente last July following a 10-year stint, was the highest paid insurance executive in Oregon and Washington in 2017, earning $4,160,783, which included a bonus of $1,067,227 and other compensation amounting to $2,818,910. His salary in 2016 was not reported on the filings.
Bernard Tyson, CEO and president of Kaiser, earned $10,709,583 last year, including a bonus of $7,978,527, a 26 percent increase from 2016. Other top-paying Kaiser executives included Arthur Southam, executive vice president of health plan operations, who brought home $3,230,889 (up 16 percent), Gregory Adams, executive vice president and group president, at $3,042,495 (up 24 percent) and Kathryn Lancaster, principal financial officer, chief financial officer and executive vice president, at $2,834,247 (up 6 percent). The filings by Kaiser includes the executive salaries from its eight-state region -- Hawaii, Washington, Oregon, California, Colorado, Maryland, Virginia and Georgia. Also, Kaiser paid its 14 board members a total of $443,450
In Oregon, Mark Ganz, president and CEO of Cambia Health Solutions, was next in line, bringing home $1,275,892 (up 21.4 percent), according to the Oregon Insurance Division.
Allison Schrupp, who spent 19 years as chief administrative officer of Providence Health Plan, ended her career earning $852,483 (290.2 percent), which included a severance package of $236,610, and a bonus of $80,883. Michael Cotton, principal financial officer, was paid $559,541 (up 18.1 percent), while Dr. Robert Gluckman, chief medical officer, received $434,454 (up 39.9 percent).
By far, Regence BlueCross BlueShield outshone its competitors by having the highest executive payroll, $5,355,559, a 27.1 jump from the previous year. Providence Health Plan came in second, at $3,473,710, yet, in comparison, its payroll jumped by 65.4 percent. Both insurance companies recorded salaries for their top 10 paid executives.
Ken Provencher, CEO and President of PacificSource, was paid $412,962 (up 31 percent) last year, and Dr. Justin Montoya, medical director earned $325,957 (up 6.5 percent), while the 17 members of its board received a total of $443,450.
Robert Gootee, CEO of Moda Health and ODS Dental Service, took home $525,902 in 2017 (-1.6 percent), and William Johnson, president, earned $409,764 (up 9.3 percent). All told, the eight board members of both health plans received $443,450.
Christian Ellertson, president and CEO of Health Net, earned $451,191, a 11 percent decrease from 2016. One board member, Kenneth Leander, was paid $12,000.
The merger between Group Health Cooperative and Kaiser Permanente in February 2017 resulted in several high-profile executives at Group Health walking away with multi-million dollar severance packages, according to the Washington Insurance Division.
Scott Armstrong, who had been president and CEO of Group Health for 12 years, was paid $4,946,382, following the merger, including $1,960,947 in severance.
Similarly, Robert O’Brien, who spent eight years at executive vice president, ended up with $2,339,671 (up 84.8 percent), including $1,033,375 in severance. O’Brien is now the chief operating officer at Health Net in Woodland Hills, Calif.
Linda Breard had been treasurer and chief financial officer at Group Health, then spent six months at Kaiser as its executive vice president and chief financial officer before resigning last July. She earned $1,243,545, including a $254,871 in severance.
Among Washington health insurers, Premera Blue Cross had the highest paid executives in 2017. Jeffrey Roe, principal executive officer, earned $3,999,931 (up 75 percent); Kent Marquardt, who retired as principal financial officer, brought home $1,778,214 (up 34.5 percent), while John Espinola, executive vice president earned $1,218,459 (66 percent), and Kristen Kemp earned $1,133,434 (up 21.4 percent) .
Other high-paid executive vice presidents included James Messina, $1,121,164 (up 17.5 percent), Katherine Cramer, $1,101,390 (up 79 percent) and David Braza, $1,064,183 (up 59.2 percent). Overall, its executives earned $14,089,167 in 2017, representing a 53.6 percent increase since the previous year.
Premera gave compensation to its board members totaling $1,626,750, a 28.4 percent increase over the previous year. Kathryn Munro was the top paid board member receiving $336,000, while other board compensation ranged from $56,500 to $131,000 for the 12 other members. In total, Premera spent $1,626,750 on board compensation in 2017. .
Regence BlueShield executives also earned handsome salaries. Mark Ganz, president and CEO of Cambia Health Solutions, took home $1,451,814 (up 22.1 percent), Jared Short, chief operating officer, $767,054 (20.6 percent), Vincent Price, executive vice president and chief financial officer, $704,534 (up 22.7 percent). Together, its three board members received checks totaling $56,450.
All of the key executives at Molina Health saw their compensation decrease last year. Its president and CEO, Peter Adler, earned $642,730 (-22.1 percent), while Dr. Francis Gough, chief medical director, brought home $375,252 (-23.8 percent), and Laurel Lee, chief operating officer, earned $304,820 (-26.1 percent).In total, its executives earned $3,380,284 (up 6.1 percent). Molina had one board member, Carl Zapora, who was paid $1,000.
Washington’s other large health insurer, Community Health Plan, paid CEO Leanne Berge, $641,065. She joined the company in December 2016, earning $28,154 that year. Similar to Molina Health, the other top-ranking executives at Community Health Plan also came away with less money last year, among them, Marilee McGuire, chief operating officer who earned $513,987 (-16 percent); Stacy Kessel, chief financial officer, $431,540 (-11.3 percent), and Alan Lederman, chief administrative officer, $431,540 (-11.3 percent). Community Health Plan spent $3,620,401 on executive compensation last year (up 29.6 percent), and wrote checks to its 22-member board totaling $177,469..
Regence BlueCross BlueShield of Utah
Once again, Mark Ganz, president and CEO of Cambia Health Solutions, took home the largest paycheck from the Regence affiliate in Utah, $673,209 bringing his total compensation from Oregon, Washington and Utah to $3,400,815. Vincent Price, principal financial officer, earned $318,669, while Jared Short, Cambia’s chief operating officer earned $355,836. In the three states, Regence paid its board members a total of $142,500.
Diane Lund-Muzikant can be reached at [email protected].