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Mike McFeely, Published March 06 2009

McFeely: Bad PR at heart of Blues' problems

So, let’s get this straight. The biggest losers in the Blue Cross Blue Shield of North Dakota vacation mess are the sales people who’ve had their incentive for winning a free trip taken away.

The biggest winner is North Dakota Insurance Commissioner Adam Hamm, who gets to thump his chest and talk tough and act all gubernatorial.

And how exactly is the consumer benefiting from any of this?

Look up the definition of “offal” in the dictionary and you will find this situation as Example A.

This is a public relations mess, and little else. The question Blue Cross Blue Shield execs should be asking themselves today is: How could we be so clueless as to think this wasn’t going to be a problem?

Was there anybody in the big building on 13th Avenue South who said, “You know, maybe we should rethink this?” Now that person should get a bonus, even if the words fell on tone-deaf ears.

Let’s review. You send people on an opulent vacation to the Cayman Islands when the company is asking for a premium increase of 18 percent. You send them on this extravagant trip in the worst economic times since the Great Depression, when their customers are worried about being able to afford health insurance.

A vacation to Des Moines might’ve been a good idea. Grand Cayman? Not so much.

While the PR hit is legit, the rest of the punches thrown toward Blue Cross Blue Shield sound like so much ax-grinding. Hamm, who has feuded with the Blues for years and was recently handed a very public defeat when a judge reversed his ruling to deny a rate increase, is lapping this up. He’s talking of launching an investigation into the company’s finances, which plays well on talk radio.

When it comes to the vacation bonuses, what is Hamm going to find? That Blue Cross Blue Shield for nearly two decades has rewarded successful marketing reps with paid vacations as part of their compensation packages, if they met certain sales goals. And the problem with that, specifically, is what?

The witch hunt may not be so kind to Blues Chief Executive Officer Mike Unhjem, who made the less-than-brilliant decision to vacation in the Caymans with the marketing reps before hustling back Thursday once the firestorm hit. Unhjem, and other execs, will take heat for their salaries, which have ballooned as the company claimed poverty and pushed for rate increases.

That’s understandable. When people making $30,000 read about somebody making $664,000, there will be backlash. The question again, though, is one of perception and reality. If Unhjem’s salary is halved, will policyholders see their rates cut?

This is a company that last year lost $750,000 a month, so the answer is fairly evident.

What the folks running Blue Cross Blue Shield need more than anything else is a course in public relations.

They also need to apologize to the sales reps, who got short shrift with the decision to bail on the vacation incentive.

Forum columnist Mike McFeely can be heard from 1-2 p.m. Monday through Friday on WDAY-AM (970). He can be reached at (701) 241-5580 or mmcfeely@forumcomm.com. McFeely’s blog can be found at www.areavoices.com/mcfeely