Which Oregon and Washington Insurance Execs Earned the Most in 2014?
The CEOs of health insurers in Oregon and Washington were paid handsomely last year, even though several execs, among them Jack Friedman, ended up taking a pay cut. And, their coordinated care counterparts followed closely behind. In fairness, not all the CCOs that cover the state’s Medicaid population shared their compensation figures with the Oregon Insurance Division since several, among them HealthShare, the largest CCO, is not registered as a health insurer and, therefore, not bound to the same regulations.
Who ended up making the most money last year in Oregon? None other than Mark Ganz, president and CEO of Cambia Health Solutions, the parent company of the Regence plans. He ended up earning $950,833, representing an 11 percent hike. But, after his compensation was compiled from Washington and Utah, Ganz brought home $2.4 million in 2014. He also earned a salary in Idaho with Regence, however that amount is unknown because its insurance division does not disclose executive compensation.
In Washington state, meanwhile, Herbert Randle Bereton Barlow, former principal executive officer at Premera BlueCross, earned $3.2 million, representing a 9 percent increase, while Scott Elliott Armstrong, president and CEO of Group Health Cooperative, following closely behind, taking home $2.1 million, and Robert O’Brien, EVP health plan administrator, earned $1.3 million.
Jack Friedman, who announced his retirement as CEO of Providence Health Plans late last year, actually saw the sharpest decline ending 2014 with $550,032, for a 28 percent decrease.
Other top-paying execs in Oregon included Robert Glenn Gootee, CEO of Moda Health Plan and Oregon Dental Service, who earned $605,228 (+3%); Majd Fowzi El-Azma, CEO Of LifeWise Health Plan with $554,726 (-4%); Ken Provencher, president and CEO of PacificSource Health Plans, with $514,849 (+10%) and William Ellis Johnson, president of Moda Health Plan, who earned $455,226 (+11%).
The salaries of Kaiser Permanente executives, meanwhile, shown on the Insurance Division filings, reflect their national executives, not their local management. In that case, Bernard Tyson, principal executive officer, CEO and president, $4.6 million, followed by Diane Gage Lofgren, former senior vice president and chief communication officer, who earned $2.6 million.
Who Else Benefited?
The Stoel Rives law firm was paid $81,372 by Moda Health Plan for legal expenses, while Michelle Slater Law received $93,551 and the lobbying firm known as Legislative Advocates was paid $85,607.
Stoel Rives also benefitted from its contract with Regence BlueCross BlueShield, earning $247,554, while the lobbying firm of John Powell & Associates, was paid $129,992 and Regence paid the national BlueCross BlueShield organization $106,316 for dues and $667,449 to its trade association.
Other health insurers also reported legal expenses in their filings to the Insurance Division, ATRIO Health Plans spent $133,478 almost equally on two law firms, Garvey Schubert Barer ($65,668) and Burchfield Group, Inc, ($67,610).
Its CEO, Ruth Rogers Bauman, earned $328,990 in 2014, representing a 10 percent increase, while its medical director, Dr. Thomas Culhane, took home $314,821, for an 18 percent salary hike.
ATRIO also divvied out $130,800 to its board members, splitting those dollars among 11 members.
Kaiser, meanwhile, aid the Oregon Association of Hospitals and Health Systems $208,800 in dues, giving another $922,566 to the Stoel Rives Law Firm and paid lobbyists Deckert Jillions $25,313 and Stephen Duncan $16,800 for their services.
Year-End Enrollment Numbers
Here’s the enrollment numbers reported to the Oregon Insurance Division for the major commercial health plans. These figures are not comprehensive because they do not include self-insured employers, or state or school district employees.
- Regence BlueCross BlueShield of Oregon, 472,034 members, down 25,857 from Dec. 31, 2013
- Kaiser Permanente: 468,368, down 4,333.
- Moda Health Plan: 207,849, up 121,560.
- Providence Health Plan: 187,411, up 3,606.
- PacificSource Health Plans: 167,531, down 39,444.
- HealthNet Health Plan of Oregon Inc.: 73,002, up 3,209
- LifeWise Health Plan of Oregon Inc: 46,528, down 4,379. Regence BlueCross BlueShield of Oregon
Regence BCBS of Oregon nearly doubled its profit, also called net income, from one year to the next. The company reported a $35.9 million profit in 2014, compared to $17.97 million in 2013.
Regence BCBS’s proceeds from the sale likely contributed to its higher profit last year. It’s worth noting that this insurer spent $1.62 billion on hospital and medical care, out of $1.87 billion in revenue. Its 1.9 percent profit margin – which would be considered razor thin in most industries – was fairly typical for a large Oregon health insurer.
Kaiser Permanente of the Northwest
Kaiser Permanente is still operating in the red. After reporting a net loss of $14.9 million in 2013, the state’s second-largest health insurer by enrollment reported 2014 net loss of $15.6 million.
As with all the state’s big insurers, Kaiser has vast financial reserves and investments that buffer it from losses like these. The nonprofit’s investments also helped relieve some of the financial pressure - investment gains contributing $20.5 million to the bottom line, which offset a $35.6 million underwriting loss.
With capital and surplus of $203.2 million as of Dec. 31, 2014, Kaiser can withstand financial losses – but that buffer is not what it used to be. On Dec. 31, 2013, the insurer’s capital and surplus stood at $480.1 million. Pension and retirement-plan related write-downs are responsible for much of that decline.
Moda Health Plan
The meteoric rise of the health insurance company formerly known as ODS continued in 2014, as Moda offered low-cost plans on Oregon’s health exchange and ended its first full year as the chief sponsor of the city’s National Basketball Association arena. Moda’s membership climbed an astounding 140 percent last year, to 207,859, making it the state’s third-largest health insurance company.
The company has proved willing to pay to boost its visibility. Though it has not disclosed how much it spent to secure naming rights to the Moda Center beginning in 2013 (formerly the Rose Garden Arena), The Oregonian estimated the value of the 10-year deal to be $40 million. Moda says it spent $3.3 million on marketing and advertising last year.
Step back in time just a few years, and it was a different story: At the end of 2011, Moda was better known for its dental plans than its health insurance, had just 63,734 people enrolled, and ranked sixth out of the state’s seven biggest private insurance companies.
But last year’s membership growth came at a financial cost. Moda reported a net loss of $4.4 million, compared to a profit of $7.5 million in 2013. Nonetheless, Moda’s capital and surplus climbed last year – from $74.9 million, to $28.8 million.
Providence Health Plan
Providence Health Plan, owned by nonprofit five-state Providence Health & Services, has been a steady and consistent present in Oregon for many years, with enrollment numbers that edged up and down from year to year, but remain remarkable close to where they were five years ago. In 2011, Providence reported 185,597 people enrolled in its plan. Last year, that number was 187,411.
Providence Health Plan reported a $22.3 million profit in 2014, with a 2 percent profit margin, and listed no unusual or noteworthy changes or transactions in its annual financial report to the National Association of Insurance Commissioners.
PacificSource Health Plans
On the surface, PacificSource seems to be falling fast: Though doing well financially, the company reported a 19 percent drop in member enrollment over the past year, to 167,531 people covered as of Dec. 31, 2014. But this 39,444-person enrollment decline appears to actually reflect a shift of strategy for PacificSource, which has moved into the world of coordinated care organizations.
PacificSource’s two CCOs, which operate under the “Community Solutions” name and are focused on central Oregon and the Columbia River Gorge, covered 63,894 people as of Jan. 15, according to an Oregon Health Plan report. That’s up from 48,639 a year earlier.
As we reported in last week’s story on CCOs, PacificSource CCO reported stable profits for each of the first three quarters of 2014, with a total net income of $13 million for the periodIn its report on its traditional health-insurance operations, PacificSource Health Plan said it had a $16.9 million profit in 2014, up 14.6 percent from the year before.
Courtney Sherwood and Jen Kruse also contributed to this article. Diane can be reached at [email protected].