Moving forward with reform of CareFirst BlueCross BlueShield, a state nominating committee named five new members to the nonprofit health insurer's board yesterday, including the president of the Johns Hopkins University and a former dean of the University of Maryland law school.
The new members, who will take office by the end of the year, will replace five of CareFirst's 12 Maryland directors.
Next summer, the CareFirst board will pick the other seven Maryland members from a list of qualified candidates being forwarded by the nominating committee. Nine other CareFirst board members are from the District of Columbia and Delaware.
A state law enacted last spring mandated the board changes after CareFirst's board was sharply criticized for trying to convert the health insurer to for-profit operation in a move to sell the company.
Steven B. Larsen, then Maryland insurance commissioner, blocked the sale and issued a lengthy report charging the board had improperly ignored its nonprofit charter and had approved tens of millions of dollars in illegal bonuses for company executives.
Named to the CareFirst board yesterday were:
William R. Brody, president of the Johns Hopkins University and a physician.
Michael J. Kelly, dean of the University of Maryland law school from 1975 to 1991, now self-employed.
John M. Colmers, a program officer for the Milbank Memorial Fund, a New York foundation, and a health regulator in Maryland for nearly two decades, including a term as executive director of the Maryland Health Care Commission.
Michael Merson, who was chief executive officer of the five-hospital Helix Health system until it merged into MedStar Health. He is now a consultant in hospital management, including executive compensation.
Clemon H. Wesley, president and chief executive of Texcom Inc., a telecommunications engineering company in Lanham, who has served as chairman of the National Association of Minority Business.
"It sounds like a very good start," said Del. Shane E. Pendergrass, a Howard County Democrat who was a sponsor of the reform law. The new members have not been involved with CareFirst before and will be starting fresh, he said.
"They have good credentials, they will ask good questions, and there will be good discussion," Pendergrass said. "My comfort level is improved."
Colmers and Merson, the only two board nominees who could be reached after Gov. Robert L. Ehrlich Jr. announced the selections yesterday afternoon, both said they would work to build a consensus on the company's direction.
"It's important for the five new members and the seven existing members to recognize it's not us vs. them, it's us together," said Colmers. "I look forward to building relationships." He said he hoped to "help find the balance" between CareFirst's obligation to the public as a nonprofit and its need to remain a solvent business.
Merson sounded a similar collaborative note. "If you're dividing the board and going in with a rush and with your own agenda, it has a high probability of destabilizing the institution," Merson said. "The first objective should really be for each board member to integrate successfully into the company."
CareFirst issued a brief statement, which said, in its entirety, "CareFirst looks forward to welcoming and working with these new directors of the board."
Frederick W. Puddester, who chaired the nine-member nominating committee, said his panel had received more than 300 applications and had interviewed a number of finalists. Puddester is a former state budget secretary who is currently budget director for Johns Hopkins University.
The nominating committee, which included Larsen and James T. Brady, former state secretary of economic development, was chosen by Ehrlich, House Speaker Michael E. Busch and Senate President Thomas V. "Mike" Miller.
In interviewing candidates, Puddester said: "We asked their opinion, but we didn't offer agendas. We were looking for people who were thoughtful, who had a vision."
The committee will forward the names of other qualified applicants to the CareFirst board, which will choose the next seven members from that list.
Based on the law and on a consent decree reached after a court challenge, Puddester said, the nominating committee did not rank the other applicants, but simply screened them to remove convicted felons, government officials, CareFirst employees and other categories not eligible for the board.