Small Town News

Blues board should grab the helm

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Other Views

Insurance Commissioner Adam Hamm should be commended for keeping the feet of North Dakota Blue Cross-Blue Shield to the fire for a series of scandalous errors in judgment over the past few years. These errors are too serious to dismiss with one news release claiming that all will be fixed.

Organized as a mutual, BlueCross belongs to the premium-payers. Unfortunately, most subscribers consider it just another insurance company and pay little attention to their responsibilities to nominate, elect and hold accountable the management or the Board of Directors.

Serving over 400,000 North Dakota customers, the Blues have grown too large and impersonal for premium-payers. So they expect a 13-member Board made up of eight consumer representatives and five provider representatives to be their watchdog. The Board members are paid $30,000 a year - more than half of a full-time salary for most North Dakotans - to participate in major management decisions..

Something happened along the line that compromised the independence of the Board. Management elbowed the Board aside, grabbed the helm, and took a tack that scandalized the company. Without inside information on the machinations, we can only surmise what happened.

In the first place, the magnitude and complexity of the insurance business became too much for the time commitments of a lay board. This is not to suggest that the Board is loaded with incompetents. Their credentials put them a cut above ordinary laypersons so it was not incompetence that created the vacuum in leadership.

Secondly, the Board members were victims of North Dakota's traditional trust in the integrity of other people. They trusted the Blues administration to do the right thing and the administration took advantage of them.

Third, the Board members unwittingly compromised some of their in dependence by accepting gratuities, salary increases and junkets proposed by management. Instead of remaining independent policymakers, the Board members became too cozy with management.

As the Board struggles to restore the integrity of the mutual, it should look at the policymaking structure that has worked for the State Investment Board. The Board is made up of state officials and employees who acknowledge their inadequacy for making major investment decisions. So they hire a highly-qualified investment officer who sits in on Board meetings and offers independent expert advice when dealing with money managers.

The Blues Board members should acknowledge their lack of in-depth expertise in the insurance field and hire an expert who could give independent advice on proposals from management. Before the Board can take charge, it must equip itself with expertise of its own to check the expertise of management. That would give the Board a firm grip on the helm.



Copyright 2009 Turtle Mountain Star, Rolla, North Dakota. All Rights Reserved. This content, including derivations, may not be stored or distributed in any manner, disseminated, published, broadcast, rewritten or reproduced without express, written consent from SmallTownPapers, Inc.

© 2010 Turtle Mountain Star Rolla, North Dakota. All Rights Reserved. This content, including derivations, may not be stored or distributed in any manner, disseminated, published, broadcast, rewritten or reproduced without express, written consent from DAS.

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