We have posted quite a bit about leadership problems at one of the US biggest for-profit managed care organizations/ health care insurers, the UnitedHealth Group
(UHG), most recently here
UHG has not always been known for being particularly patient-, employer-, or physician-friendly. For example, as reported
by the Hartford Courant, "UnitedHealth Group Inc., the largest U.S. health insurer, will refund $50 million to small businesses that New York state officials said were overcharged in 2006."
We have previously discussed how UHG promised its investors it would continue to raise premiums, even if that priced increasing numbers of people out of its policies (see post here
); allegations that the UHG acquisition of Pacificare in California lead to a "meltdown" of its claims paying mechanisms (see post here
); charges that the UHG acquisition of Sierra Health Services would give it a monopoly in Utah, and that UHG was transferring much of its revenue out of the state of Rhode Island, rather than using it to pay claims (see post here
); and numerous violations of Nebraska insurance laws by UHG (see post here
Such anecdotes conflict with the UHG mission statement
, as recently revised. The company pledged to:
* Enhance the performance of the health care system, and improve the overall health and well-being of the people we serve and their communities.
* Work with health care professionals to expand access to high-quality health care so people get the care they need at an affordable price.
* Support the physician/patient relationship and empower people with the information, guidance and tools they need to make personal health choices and decisions.
One hypothesis is that UHG has trouble adhering to its idealistic mission because of the shortcomings of its leadership.The story of the fall of its recent CEO, Dr William McGuire, was strikingly instructive. As we have previously discussed, (see these posts here
, and here
from 2006 with links backward) Dr McGuire received outrageously lavish remuneration, which stood in stark contrast to the previous UHG mission's pledge to "make health care more affordable."
Controversy has swirled over the timing of huge stock option grants given to Dr McGuire (see post here
), leading to his resignation in October, 2006 (see post here
). More recently, McGuire agreed to pay back some of those options, although that would reportedly leave him with more than $800 million worth of options (see post here
Most recently, as reported by Bloomberg
UnitedHealth Group Inc.'s former chief executive officer William McGuire agreed to pay $30 million to settle a lawsuit brought against the company and individual defendants over backdated stock options.
Under the deal, which needs court approval, McGuire will also return to UnitedHealth 3.68 million shares of stock options. The class-action, or group, lawsuit was brought over options that were backdated during McGuire's tenure at the helm of the company, the largest U.S. health insurer.
The settlement may be the largest cash recovery obtained from an individual defendant in a securities class-action lawsuit, Calpers said.
The company remains under a criminal probe of backdated stock options.
But at the same time, the Minneapolis Star-Tribune reported
, Dr McGuire seems to have found ways to keep busy,
The University of Minnesota is courting William McGuire, the health insurance executive who lost his job in a stock options scandal, as "executive in residence" at its business school.
Stephen Parente, director of the Medical Industry Leadership Institute in the Carlson School of Management, said the school had given him the go-ahead to explore the idea with McGuire, former chief executive of Minnetonka-based UnitedHealth Group.
'We are courting him to be an executive-in-residence at Carlson,' Parente said, adding that McGuire's immense experience in health care is what appealed to the university.
Parente said he first reached out to McGuire in August 2007, inviting him to be the keynote speaker at an invitation-only event attended by 70 to 80 guests at the Lafayette Club in Minnetonka Beach. The subject of McGuire's talk was the future of health care.
McGuire hit familiar themes during the hourlong speech, including the need for universal access to health care and the need to track the quality of care by physicians and to pay them accordingly.
Parente said his approach to McGuire was along the lines of: 'We don't really care about the stock options. You know stuff. Tell us what you think.'
Since then, McGuire has attended two seminars at the Carlson school, including one where he arrived unannounced.
There was some discussion within the school, Parente said, on whether it was appropriate to engage McGuire, given the lawsuits and investigations in which he was embroiled. The conclusion was that it was.
'It's one thing if you're bringing in a criminal to speak. But if someone's under investigation, that's fair game,' he said.
Since then, McGuire has acted as "ad hoc kitchen-cabinet adviser" to him, Parente said.
In June, when Parente presented a paper titled 'Is Consumerism at Odds with Prevention?' at the American Society of Health Economics at Duke University, he listed McGuire as one of six co-authors.
Sometimes, you just can't make this stuff up. Under CEO McGuire, UnitedHealth became a poster child for the hypocrisy of managed care, promising affordable care while stuffing the pockets of its top managers. The company was reported to have committed numerous instances of unethical behavior that contradicted its lofty ideals. It had to re-state its earnings. McGuire was forced into early retirement. Both he and the company have had to settle lawsuits, and the company is reportedly still under criminal investigation.
So then, a prominent business school is "courting" McGuire? Its leadership invites him to speak about universal health care, after he managed to steer a billion or so dollars out of the health care system into his pocket (at least for a while)? It invites him to speak about the quality of physicians' medical management, after he managed his company in stark contrast to its lofty ideals?
Its leaders "don't care about the stock options." Anyone who has not (yet) been convicted of a crime has ethics good enough for them?
That's a pretty good way for the business school to tell its students that the health care management slogan should be "take the money and run."
With business schools setting these kinds of ethical examples for their students, no wonder the business-oriented leaders of health care have turned out so bad.
ADDENDUM (18 September, 2008) - Now it appears that the University of Minnesota is disavowing any plans to make McGuire a faculty member, per the Star-Tribune