Blue Cross Blue Shield of North Dakota Names von Ebers President, CEO

BISMARCK, N.D. — Blue Cross Blue Shield of North Dakota has named insurance industry executive Paul von Ebers as its new president and chief executive, four months after firing CEO Mike Unhjem amid criticism over a Caribbean retreat.

Von Ebers, 56, of Rochester, N.Y., is working now as a consultant for Blue Cross Blue Shield of Illinois and plans to start the new job by Sept. 1.

"Cost and quality of health care are key issues," he said. "I don't have all the answers but I do believe in a collaborative approach among all stakeholders."

Blues Chairman Dennis Elbert said the nationwide search for a new CEO drew 43 applicants, but von Ebers "rose to the top." Elbert said "integrity and proven leadership" were key in choosing the new CEO.

Unhjem, who had been the Blues' top executive since 1991, was dismissed in March after approving a $250,000 trip to the Grand Cayman Islands as a reward for employees and guests at a time when the company was seeking rate increases. He was given a $2.2 million lump-sum severance payment that the company said was part of an employment agreement reached in 2007, a year after Unhjem was arrested for drunken driving.

Von Ebers said he is aware of the company's "troubled waters," and says steps have already been taken to calm the situation. The company says future trips such as those to the Caribbean have been scrubbed.

Elbert said von Ebers will be paid $500,000 annually, with incentives that could bring his salary to $750,000. In 2008, Unhjem was paid $1.08 million, the company said.

The nonprofit company, which is the state's dominant insurer, provides health care coverage to more than 375,000 North Dakotans and 75,000 nonresidents.

In addition to outcry over the Cayman Islands trip, the insurer has been dealing with other woes, including a former assistant vice president facing charges of viewing child pornography at home and at work. The company reported a $9 million underwriting loss last year, and said the market value of its portfolio dropped $28 million. It reported an overall net gain in 2008 of nearly $9 million after investment income and taxes.

Blues also has had a contentious relationship over rate increases with state Insurance Commissioner Adam Hamm, who called for an audit of the insurer's spending following the Caribbean retreat. Blues and the Insurance Department say the audit could be complete this month.

Acknowledging that the relationship "has been somewhat rocky," von Ebers said he and Elbert called Hamm on Monday, and plans to meet with him soon.

"I expect we're going to have a professional relationship," Hamm said. "I indicated I want to meet with him face-to-face to find out what his vision is for Blue Cross Blue Shield, and its relationship with policyholders, health care providers and the Insurance Department."

In an interview, von Ebers cited his 22 years of experience working for the Blues in New York, Iowa, and Illinois. He said he resigned in January as a vice president at Rochester, N.Y.-based Excellus Blue Cross Blue Shield because of a "difference in management styles" with the insurer's CEO. New York state records show von Ebers was paid $981,832 in 2008.

Von Ebers is married with five children, three of whom are grown. He said he intends to stay in North Dakota at least until his 9-year-old daughter is out of school.