Monday, August 20, 2007

Pot, Meet Kettle

My friend Ken Jacobsen recently wrote a long "letter to the editor" in the Daily Times blasting the merger of Independence Blue Cross and Hightower insurance companies.
In his letter, Ken joined Sen. Arlen Specter in criticizing the multi-million dollar salary of Hightower CEO Kenneth Melani. According to Ken, Melani made $3.2 million with a $2 million bonus.
Both he and Specter want to know "how such a high salary was consistent with the Blues’ tax-free status as a “non-profit” company."
My friend Ken will be happy to know that despite the non-profit status of his billion-dollar organization, Mr. Melani pays substantial personal income taxes on his pay. Probably close to $2 million.
Ken complains that there are no stockholders of Mr. Melani's firm to complain about his compensation, just a hand-picked board of directors.
What Ken doesn't mention is his own chosen line of work, which is that of a class- action attorney. He sues big companies on "behalf" of stockholders and makes a pretty good living (think millions) himself. God bless him.
Also Arlen Specter's son, Shanin, is one of the top medical malpractice lawyers in America. He makes his living suing doctors and non-profit hospitals. Does he make as much money as Mr. Melani? I don't know. He doesn't have to say. But his father benefits greatly from the support of trial lawyers like his son and Ken, even though he is a committed Democrat.
Ken's concern for "long suffering and beleagued doctors" rings a little hollow given his profession's long standing antipathy for med-mal reform. Lawsuits and the threat of them continue to chase doctors out of Pennsylvania. If the Blues deserve criticism (and they do) for their continued squeezing of doctors' reimbursals, fine. But Ken's bringing up the subject of Melani's pay (ala Arlen Specter) is just a case of a couple of pots calling a kettle black.


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