Monday, February 27, 2006

A Tale of Three Ironies: University of Miami's Janitors Still Have No Health Insurance

There are no lack of ironies in an emerging story about the University of Miami.

There has been an ongoing dispute involving the university, and a company called Unicco with which it contracts to provide janitorial services, and the Unicco's local employees. The Service Employee's International Union (SEIU) has been trying to organize the janitors. Recently, in one of its statements, a janitor who has worked for at the university for 25 years and makes $6.80 an hour claimed, "I was here the first time the university formed a committe to talk about our wages. I was making barely over minimum wages then, and I still am now." (See the Miami Herald story here.)

The union has just taken a strike authorization vote. In support of the vote, a worked at the university's down-town medical campus, which includes Jackson Memorial Hospital, said, "I am expected to clean the medical facilities at Jackson without safety equipment, without gloves, without training, and without health insurance, all for $6.40 an hour." (See the South Florida Business Journal article here.)

So the first irony is that the maintenance workers at the University of Miami medical center do not have health insurance provided by their employer.

What makes this story more interesting is how impetus built for the recent escalation of this dispute.

Two weeks ago, the New York Times ran a relevant article (available here, but requires subscription to view.) Was the article about health care policy? Not really. It was a Times Magazine profile in "The Way We Live Now" series about University of Miami President Donna Shalala, the former Secretary of Health and Human Services in the Clinton administration, and one of the principal advocates of Clinton's health care reform plan, which was meant to provide universal health care insurance.

According to the Times, Shalala lives in a 9000 square foot mansion (owned by the university), with mango trees in the garden. She drives a Lexus (hybrid, naturally). She owns a 29 foot boat, but doesn't get to use it much. She has house-hold help who makes her bed for her.

After the Times article was published, a Washington Post commentator wrote,
Note to the Haves: When involved in a labor dispute, skip the luxury home profile.

Then the story hit the blogsphere. Wonkette's post on the story was entitled, "Let Them Eat Mangoes."

So the second irony is obvious.

But there is a third irony.

Not reported by any newspaper, so far, is another responsibility Shalala now has. In her spare time, Shalala is a director of UnitedHealth Group, the parent company for the UnitedHealth managed care organization, and hence has a fiduciary duty to the UnitedHealth. This company's mission statement includes,
UnitedHealth Group is a diversified health and well-being company dedicated to making the health care system work better. The company directs its resources into designing products, providing services and applying technologies that:
* Improve access to health and well-being services;
* Simplify the health care experience;
* Promote quality; and,
* Make health care more affordable.
The benefits received by directors are as follows, per United's 2005 proxy statement,


Directors who are not Company employees receive an annual retainer of $30,000, a $1,500 fee for attending each Board meeting in person ($750 for attending by telephone), and a $1,000 fee for attending each committee meeting in person ($500 for attending by telephone). Directors also receive the standard fee for attendance by telephone if they are unable to attend a meeting, but receive an update by telephone prior to or after the meeting. In addition, we pay the Chairman of each of the Audit Committee and the Compensation and Human Resources Committee an annual retainer of $5,000.
We provide health care coverage to current and past directors who are not eligible for coverage under another group health care benefit program or Medicare.
Non-employee directors also receive grants of non-qualified stock options under the UnitedHealth Group Incorporated 2002 Stock Incentive Plan (the “Stock Incentive Plan”). Under the Stock Incentive Plan (and terms approved by the Compensation and Human Resources Committee with respect to non-employee director grants made pursuant to the Stock Incentive Plan), our non-employee directors receive three types of option grants: (1) initial one-time grants of non-qualified stock options to purchase 36,000 shares of our common stock; (2) quarterly grants of non-qualified stock options to purchase 5,000 shares of our common stock; and (3) conversion grants made pursuant to an election by a director to convert annual retainer and meeting attendance fees into options to purchase our common stock.
The initial grants are made automatically on the date the eligible director is first elected to the Board of Directors and become exercisable over the following three years at the rate of 12,000 shares per year. The quarterly grants are made automatically on the first business day of each fiscal quarter and become exercisable immediately upon grant. The conversion grants are made on the day of each regularly scheduled Board meeting and become exercisable immediately upon grant. The number of shares covered by a conversion option will equal four times the amount of the retainer and meeting fees foregone, divided by the fair market value of one share of our common stock on the date of grant.

According to the proxy, Shalala had received options for 30,000 shares of stock by 2005.

Gotta love those mangoes.

1 comment:

Judith Nudelman said...

The AMA News just reported that the percentage of premium spent on health care has declined for all the major for-profit health care insurances, driving up their profits. In the unprofitable past, the percentages of premium dollars spent on actual health care were in the 90% range, now it's down to a profitable 78% or so. United's profits are up 25% from last year. The irony of this story is so profound it almost seems like a satire.