Pat Hemingway Hall, CEO of Health Care Services Corp., is retiring at the end of the year, after 7 years as CEO and 23 working for the company.
Hemingway Hall has led what is now the sixth-largest health insurer in country, with nonprofit Blue Cross and Blue Shield insurers in Illinois, Montana, New Mexico, Oklahoma and Texas and $61 billion in revenue. Under Hemingway Hall, HCSC's insurers added 3 million in membership, including in ACA exchanges, and the company tried to adapt and diversify, including adopting new information technology and preparing to contract in Medicaid.
"During my tenure, we have made significant investments in our future, and we remain well positioned to continue expanding access for coverage for as many people as possible in our states," said the 62-year old Hemmingway Hall.
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Educated as a nurse, Hemingway Hall spent much of her career with HCSC, serving as president of Blue Cross and Blue Shield of Texas and chief operating officer of HCSC before becoming CEO in 2008.
Hemingway Hall will be replaced by Paula Steiner, HCSC's current chief strategy officer. Steiner, 58, with a Wharton MBA, is steeped in the world Blue Cross Blue Shield. She joined in HCSC in 1997 to work in marketing, after spending 14 years with the Chicago-based BCBS Association.
"Equipped with the right talent, the right strategy and the right focus, HCSC is on firm ground and ready for the future," Hemingway Hall said of Steiner, who starts in January 2016.
HCSC has 16 million members in total and also operates Dearborn National, TMG Health, MEDecision and Academic Health Plans. Headquartered in Chicago, with 23,000 employees nationwide, HCSC oversees significant market shares in Illinois and other states.
The company has had the distinction of being the nation's largest mutual insurance company, and among the most profitable.
Under Hemingway Hall, HCSC has routinely posted $1 billion in annual income, before and after the recession. In 2014, the first year of the ACA exchange market, the parent company actually lost $281million (including $400 million loss on BCBSTX's individual insurance business), although it has some $10 billion in total adjusted capital that was increased by $700 million in 2013 in anticipation of unpredictability.
Those years of hundred-million and billion-dollar incomes allowed HCSC to grow, adding BCBS of Montana in 2012, and to compensate executives at levels that have drawn friction from customers and the public.
Last year, Babbit Municipalities Inc., a Chicago-based benefits administrator for labor unions, sued HCSC, arguing that some $100 million that was paid out in bonuses to 10 top executives between 2011 and 2013 should have been given back to health plan members in rebates or in lower future premiums--following the model of a mutual insurer, owned by member-customers.
The company's trend in executive pay and asset accumulation "obliterate the purpose as a nonprofit mutual corporation and exceeds the bounds of proper business judgment," the lawsuit said, arguing that the $10 billion in reserves were more than twice as much as necessary.
Hemingway Hall has been among the highest-paid executives in greater Chicago -- in some years bringing in almost as much as executives at companies like Abbott Laboratories, Boeing, Caterpillar and McDonalds -- and one of the highest paid female CEOs nationally, not far behind the likes of DuPont's Ellen Kullman, HP's Meg Whitman and IBM's Virginia Rometty.
In 2011, Hemingway Hall earned $12.9 million, more than double the total compensation for what was then greater Chicago's highest-paid nonprofit hospital executive. In 2012, Hemingway Hall was paid a total of $16 million (almost $15 million of it in the form of a bonus), and then the next year around $11 million, amid modest bonus cuts across the board for HCSC executives.