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That “distressed baby" Tim Armstrong blamed for benefit cuts? She’s my daughter

284 points by selmnoo 13y ago

carbocation 13y ago
Also see http://www.slate.com/articles/double_x/doublex/2014/02/tim_armstrong_blames_distressed_babies_for_aol_benefit_cuts_he_s_talking.single.html http://www.slate.com/articles/double_x/doublex/2014/02/tim_a... for the single-page version.
emp_zealoth 13y ago
Isn't it how the insurance works(and the very point of it)? Spreading the risk(and cost) over multitude of individuals? I his words utterly silly
- scarmig 13y ago
  Tim Armstrong blaming Obamacare (its mandate for medical coverage for situations like this) for the benefit cuts also has an interesting implication: If not for Obamacare, AOL would have provided a insurance plan that wouldn't have covered this child, and instead left her to die and her family in a permanent state of medical bankruptcy. ETA: For the record, I think most insurance policies have covered this for awhile. But Armstrong's either very confused, or, more likely, just struggling to find a way to point fingers at anything who's not him.
  - MattBearman 13y ago
    left her to die and her family in a permanent state of medical bankruptcy. I can't get my head round this, as someone born and raised in the UK, America's health care system (or lack there of) is the single thing that will stop me ever wanting to live in the US.
    - dmm 13y ago
      Don't take financial or healthcare from online forum comments ( in other words the parent is full of shit).
    - icebraining 13y ago
      What about cases like this: http://www.theguardian.com/society/2010/aug/24/avastin-too-expensive-for-patients http://www.theguardian.com/society/2010/aug/24/avastin-too-e... ? I'm not a fan of the US system either, but I live in a country with State-run healthcare, and cost decisions like those are made every day.
      - lmm 13y ago
        A national healthcare system doesn't take away any of the things you get in the US. Many employers offer private medical insurance, and one can choose to pay for individual treatments privately if one wishes. So if you're wealthy or have a good employer, you're in just as good a position as you are in the US (and if you're poor, you're better off).
    - ars 13y ago
      The reason you can't wrap your head around it is that it's not actually true. People love saying that about America, but it's not true and never has been. For cases like that there is government insurance. It's called Medicaid, or Chip, or a bunch of other names, and it's available everywhere. (And it doesn't help that the person you replied to is doubly confused and combined two unrelated things to confuse him even more. The CEO was saying that Obamacare was an added expense - it had nothing to do with the babies.)
      - scarmig 13y ago
        To be absolutely clear: The CEO is the person who rhetorically conflated Obamacare and having to pay for the babies, not me. Don't try to poison the well by trying to shift his misspeaking to me.
  - mp99e99 13y ago
    According to the article, the family had family insurance plan which would have existed before Obamacare, so I think this is a bit of a red herring. I think he was pointing to increased costs of Obamacare AND the distressed babies as examples. But I agree, if you can't use your insurance when you need it, whats the point of insurance?
    - DanBC 13y ago
      The point of insurance is to make money for people selling insurance. That's why those companies employ teams of people who look for ways to avoid paying insurance.
      - mindcrime 13y ago
        That's why those companies employ teams of people who look for ways to avoid paying insurance. You mean the people encouraging people to use proper fire-safety techniques, "baby-proof" their homes, eat more healthful foods, exercise regularly, etc? Of course every insurance company knows they will have to pay some claims at some point, it's a cost of doing business. So their entire purpose isn't to avoid paying claims, it's to charge enough in premiums to cover those claims while still making a profit.
  - deleted 13y ago
    [deleted]
  - josephfung 13y ago
    That's not exactly accurate - he's blaming Obamacare for them having to provide new insurance products that have a net higher cost going forward - the incident of distressed babies happened before the ACA, which means they did have that choice, and chose to pay the costs. Regarding what most insurance policies cover, there are actually several scenarios that would leave AOL on the hook. First, they could have a policy that has an Annual or Lifetime payment limit, which would leave the company (or individual) responsible for anything over. Alternatively, if the number of incidents was significantly higher than average for the carrier, AOL could see a significant premium increase due to the higher utilization of their plan. Or, they could actually be running a self-funded insurance program, which means they are managing the risk instead of relying on a separate insurance carrier. Either way, there are several situations in which AOL's costs could be significantly impacted by the situation.
- HarryHirsch 13y ago
  Spreading the risk is only half of insurance, the other half is deciding exactly what hazards are covered. In normal first-world countries you have some form of socialized healthcare with bioethics committees that decide what should society should pay for. You can have reasoned arguments about end-of-life care and very premature babies. But in America with the crazy system of employee-provided coverage it's the CEO that sets coverage limits, and generally speaking a company's interests are not aligned with society in general.
therobot24 13y ago
Armstrong's quotes are quite deplorable and the backpedaling is cringe-worthy but all i could think of while reading the article is Mrs. Lovejoy from the simpsons, "Won't somebody think of the children?!"
- ivraatiems 13y ago
  Because somebody should think of the children. And the geriatric. And the disabled. Part of the point of having a developed society with a developed healthcare system is using it to sustain people who can't sustain themselves. I think this article isn't important because one person happened to say something rude about somebody's daughter. It's important because it's a peek into how a lot of people are actually thinking about the world, and that's pretty scary.
  - therobot24 13y ago
    not disagreeing with anything here, nor did i in the previous post, merely a light anecdote relating to how thick the writer is 'laying it on'
    - a3n 13y ago
      I think the writer can be forgiven for laying it on thick, since the writer is the mother of one of those distressed babies. And I think it's very useful for our empathy muscles to occasionally listen to "biased" people like this mother.
      - therobot24 13y ago
        so i lack empathy because i think an article that primarily uses empathy can be manipulative? classy...
        a3n 13y ago
        therobot, I can't reply to your reply. (Except now I can, so I moved it. /HN) No, I don't think you lack empathy, although I can see how my comment could be taken that way. Apologies.
GuiA 13y ago
I'm glad this article was written. Armstrong's statements were so despicable that in this case "airing the dirty laundry" is a perfectly appropriate answer. I'm also surprised that his statements aren't "suable" in some form in the lawsuit happy country that is the United States of America. A friend of mine immediately pointed out to the numerous healthcare privacy laws in place; and another HN commenter pointed out on the original thread the possibility that the employees with the distressed babies would get discriminated against by their coworkers, after Armstrong's statements, due to the fact that they're probably identifiable internally by their team members. This is the same guy who fired an employee publicly during a company talk for (apparently) taking pictures. (http://www.sfgate.com/technology/businessinsider/article/AOL-CEO-Tim-Armstrong-Fired-Patch-s-Creative-4720914.php http://www.sfgate.com/technology/businessinsider/article/AOL...) What a sad, sad man. I hope that he gets scared and lonely as he gets older and older, when his billions won't change anything and when he realizes that all of his misery stems from his own choices.
- selmnoo 13y ago
  > I hope that he gets scared and lonely as he gets older and older, when his billions won't change anything and when he realizes that all of his misery stems from his own choices. I know the word "sociopath" gets thrown around a lot when we're talking about CEOs, but I really really think this guy fits the bill. And so, in all likelihood, he sadly will not feel or realize a thing even as he gets older.
- cosmie 13y ago
  > And to be honest, I'm surprised that his statements aren't "suable" in some form in the lawsuit happy country that is the United States of America. A friend of mine immediately pointed out to the numerous healthcare privacy laws in place; and another HN commenter pointed out on the original thread the possibility that the employees with the distressed babies would get discriminated against by their coworkers, after Armstrong's statements, due to the fact that they're probably identifiable internally by their team members. It very well may be a suable violation. HIPAA laws prohibit the "misuse and disclosures of PHI", and PHI includes a person's payment history, not just their medical records[1]. Such a breach by a covered entity is a criminal offence that can result in jail time by the offending employee[2]. As AOL isn't a covered entity (e.g. healthcare provider, insurance company, etc), I'm not sure whether it could be applied directly to Armstrong. You can probably push a HIPAA violation to the insurance company, however, as Armstrong most likely was told of these cases as the basis for group rate spikes during their insurance contract re-negotiation. And those are just justifications related to violating patient privacy laws. I'm sure a lawyer could also make a pretty strong case against Armstrong personally for defamation. [1]: http://en.wikipedia.org/wiki/Protected_health_information http://en.wikipedia.org/wiki/Protected_health_information [2]: https://www.ama-assn.org/ama/pub/physician-resources/solutions-managing-your-practice/coding-billing-insurance/hipaahealth-insurance-portability-accountability-act/hipaa-violations-enforcement.page https://www.ama-assn.org/ama/pub/physician-resources/solutio...
pwg 13y ago
Another interesting quote from the article: > Let’s set aside the fact that Armstrong—who took home $12 million in pay in 2012 Assuming the above is factual (and I have no reason to doubt it), he wanted to cut the 401(k) plan for everyone because of an expense that was one twelfth the size of his own pay that same year. Just a wee bit hippocritical there on his part.
- Tycho 13y ago
  Just as an aside, I think AOL had the highest stock price increase in 2012 of any comparable company. I wonder how much of compensation was due to capital gains.
- eCa 13y ago
  One sixth. There were two "distressed babies".
CrowderSoup 13y ago
I can't imagine that Tim Armstrong sits at home stewing about the high costs of distressed babies, but singling them out in this situation is deplorable.
kabdib 13y ago
Memo: Don't screw with someone who can write well. [Yup, Armstrong is despicable]
jobu 13y ago
She quoted this line from some of the TV coverage: “How many distressed babies does AOL pay this guy?” Does anyone know who said that? That's really dark, but also hilarious.
- jhonovich 13y ago
  http://valleywag.gawker.com/tim-armstrongs-salary-in-distressed-babies-1517788240 http://valleywag.gawker.com/tim-armstrongs-salary-in-distres...
- keithpeter 13y ago
  Less dark: we used to measure budgets, wages &c in units of Rovers (millirovers for small items) for some years in a place I worked in because the Principal decided to buy herself an official Rover - while at the same time freezing expenditure on such fripperies as textbooks, photocopying paper &c. That one ended up on extended sick leave and then a payoff...
gaius 13y ago
This guy is a walking disaster. How is it anyone is willing to work for him?
- emp_zealoth 13y ago
  He pays money?
  - gaius 13y ago
    It wasn't the only reason, sure, but it has been a contributing factor to me resigning that I couldn't bear to make the management any richer...
- fennecfoxen 13y ago
  Well, if you work for him, you apparently get Compensation, including salary, 401(k) matching, and a health plan that'll cover your infant's medical expenses even if they run to like a million dollars. For someone or another, that's probably the best deal they were offered.
  - judk 13y ago
    401k benefit is dropping, that's what this story was about before the baby gossip blogging buried the point.
deleted 13y ago
[deleted]
bigchewy 13y ago
Tim Armstrong has an incredible ability to say the wrong thing. The underlying topic, however, is fascinating. I do healthcare analytics for a living so I see how often a single neonatal ICU incident can consume 30% of an entire company's healthcare budget for the year (note: if you don't really understand healthcare, e.g. what self insuring means, please don't respond with comments that the insurance company pays the bills, this is what insurance is for, etc.). The economics of healthcare combined with the inability to have a rational discussion on how to allocate resources means that doctors / researchers will apply their research efforts where they will be rewarded. The race to keep younger and younger babies alive is fueled with ego and dollars. No one wants to talk about scarce resources and how to allocate dollars to have the most impact. I wish conversations stemming from idiotic comments like Armstrong's ended up being productive but they always end up with non-actionable ranting around taking executive pay and giving it to sick people. Unless someone proposes a mechanism to achieve that, it's just a dream / rant.
- pavlov 13y ago
  The race to keep younger and younger babies alive is fueled with ego and dollars. If you actually look at the global data on neonatal mortality [1], that doesn't seem to be true. Countries like Finland, France and Cuba perform better than the United States on this metric. These countries offer completely free healthcare to babies and pregnant mothers. Frankly, I find your assumption borderline offensive. Maybe you should take your USD-tinted healthcare analytics glasses off for a while and contemplate the possibility that human lives are worth saving. [1] http://data.worldbank.org/indicator/SH.DYN.NMRT http://data.worldbank.org/indicator/SH.DYN.NMRT
  - thaumasiotes 13y ago
    You can look at the data, but you can't conclude much from it; those numbers are not comparable to each other. From 2008: http://pjmedia.com/blog/the-doctor-is-in-infant-mortality-comparisons-a-statistical-miscarriage/?singlepage=true http://pjmedia.com/blog/the-doctor-is-in-infant-mortality-co... Some (OK, rather extensive) points from the link: > In the United States, all infants who show signs of life at birth (take a breath, move voluntarily, have a heartbeat) are considered alive. > In Belgium and France — in fact, in most European Union countries — any baby born before 26 weeks gestation is not considered alive and therefore does not “count” against reported infant mortality rates. The baby at issue here would have been just under 22 weeks. (France changed their standard in 2008-2009; their page defining stillbirth ( http://www.insee.fr/en/methodes/default.asp?page=definitions/enfant-sans-vie.htm http://www.insee.fr/en/methodes/default.asp?page=definitions... ) now includes a warning that French numbers cannot be compared to other European neonatal mortality numbers, so it seems safe to assume the rest of Europe has carried on as before.) > According to the way statistics are calculated in Canada, Germany, and Austria, a premature baby weighing <500g is not considered a living child. The article baby weighed well over 500g. But this is quite relevant to the question of who has better neonatal mortality. > In Switzerland and other parts of Europe, a baby born who is less than 30 centimeters long is not counted as a live birth. Therefore, unlike in the U.S., such high-risk infants cannot affect Swiss infant mortality rates. This baby's length is not reported, so this is of questionable relevance to this particular baby. But, again, it remains very relevant to the question of "do countries like Finland, France, and Cuba have better neonatal mortality than the US?" > If a child in Hong Kong or Japan is born alive but dies within the first 24 hours of birth, he or she is reported as a “miscarriage” and does not affect the country’s reported infant mortality rates. This could be a non-premature, 8-pound baby! > Efforts to salvage these tiny babies reflect this classification. Since 2000, 42 of the world’s 52 surviving babies weighing less than 400g (0.9 lbs.) were born in the United States. Still think "USD-tinted healthcare analytics" biases you against saving premature babies? Full disclosure: I'm with your parent; I consider spending so much pumping life into these very premature "babies" a self-aggrandizing waste of time, effort, and money. But your comment seems to be grotesquely misinformed.
woodchuck64 13y ago
Curious that AOL had to pay millions of dollars for insurance claims. Isn't that the insurance company's responsibility?
- fennecfoxen 13y ago
  Self-insured group health plan.
- lutusp 13y ago
  The entire point of this issue is that AOL chose to self-insure. That means there was no insurance company.
  - ars 13y ago
    They should have gotten secondary catastrophic insurance. I.e. only for claims over some dollar amount, which are very rare and very cheap to insure for.
- woodchuck64 13y ago
  AOL decides to take on the responsibilities and risks of an insurance company and then blames the employees and Obamacare when it doesn't work out? Wow. Armstrong is quite a piece of work.
fredgrott 13y ago
so wait Tim's Logic... 1. Baby born Medical cots $1 Million, INSURANCe COStS $250,00 and yet Tim decides to eliminate 401ks to balance benefits costs over something that does not increase insurance costs? You have to have a significant amount of $250,000 in an insurance pool of AOL employees before that happens..one is not the number that triggers it. @. He also cited Obamacare. Obamacare is by design to get businesses to pay healthcare for those at-risk employees in the low income brackets so that that preventive health care spent on them decreases the huge medacaid expenses seen later by THE FEDeral Government.Lets not even mention the productivity studies that state employees are more productive when not worrying about uncovered medical expenses. Seems tome the AOL board shold remove this CEO for gross lacking of clear thinking skills
nilsbunger 13y ago
AOL could've chosen a 3rd party insurance company instead of self-insuring. Self-insuring was probably a decision intended to save money compared to getting an external health provider. The CEO could conclude that these outlier events create too much unpredictability for the bottom line, and thus move the company to an external healthcare provider. Heck, they could even fire the CFO or whoever made the cost-benefit analysis if it was wrong. But blaming the employees, who didn’t create this situation? Unacceptable.
- ryguytilidie 13y ago
  Thats the real shocking part here. AOL made a poor business decision, paid for it, and the CEO, the very person in charge of business decisions, blames medical complications from a fucking baby. It is absolutely unfathomably terrible from a quality human being perspective.
  - BSousa 13y ago
    Just in case the author is reading, change the fucking word placement please.
- brown9-2 13y ago
  Isn't self insuring generally considered more efficient for companies of this size? I can't find the link right now but I read somewhere that it is common for large companies that self-insure to buy reinsurance to cover themselves against large payouts like in Armstrong's mythical example. The company will typically have an insurance policy for their insurance policy.
- tsotha 13y ago
  Third party insurance doesn't necessarily save you when this happens. I worked for a company with third party insurance, and when one of my coworkers had a kidney transplant we lost money that quarter as a result of extra charges.
paul 13y ago
My daughter had a similar birth and hospital stay, which also produced a million dollar insurance bill. It costs about $10,000/day to stay in the NICU. I was never able work out why it costs so much, except that this is a major profit center for hospitals, and they use the money to cover other, money losing, departments. Fortunately Google is run by good people, and they were never anything other than supportive. I'm grateful for having had access to the best care for her. I do think our medical system needs some rethinking though.
- fennecfoxen 13y ago
  If we think microeconomics for a moment: healthcare for distressed infants could be a textbook example of inelastic demand. Q: How much are you willing to pay to save the life of this child? A: ALL THE MONEY! AND MORE!!
  - thaumasiotes 13y ago
    People are a little more willing to spend someone else's money on less-than-worthwhile pursuits than they are to spend their own. As long as the customers aren't bearing the cost, everything they buy will have a similarly inelastic demand. Healthcare for distressed infants is certainly not an example of inelastic demand where people have to pay for it themselves; even food for healthy infants (a much smaller, and much more cost-effective, expense) doesn't show inelastic demand.
    - ForHackernews 13y ago
      > Healthcare for distressed infants is certainly not an example of inelastic demand where people have to pay for it themselves Are you kidding me? If it was a question of saving my child's life, I'd spend every last cent I had and then go sell a kidney.
      - thaumasiotes 13y ago
        I gave you an example. Mothers uncertain of their ability to raise an infant will abandon it to die (this is traditionally called "exposure"). It's a practice at least as old as humanity. And it conclusively demonstrates that the demand for infant care is not inelastic; these mothers aren't killing themselves trying to preserve their nonviable children. Rather, they're killing the children so that they don't die themselves in the effort to save a doomed child.
ekidd 13y ago
I'm delighted to hear that this child is doing well, and I'm utterly appalled at Tim Armstrong's attitudes towards the lives of his employee's children. Apparently it's possible to pay a programmer $100K/year, but spending ten times that to save the life of one of his employee's children is absolutely unacceptable. I'll be sure to keep that in mind the next time I hear from an AOL recruiter. The whole point of insurance is that a middle-class family can afford to pay $12,000 or $18,000 in premiums per year, but they can't easily afford a $1M black swan medical event. So the insurance company spreads the risk out over a large pool. The system breaks down, of course, if the pool is too small. A company with 10 employees probably can't absorb a $1M expense either. But AOL has 5,600 employees and it had $1.05B in net income in 2012. They can afford it to cover expenses, even if they decide to self-insure. Of course, another solution is to make the risk pool as big as humanly possible and to get employers out of the insurance business completely, so that no startup needs to worry about medical expenses. The AMA is a messy political compromise to do exactly that. But Tim Armstrong is also upset about the AMA. So I'm not quite sure what his ideal outcome is here.
- dlokshin 13y ago
  The irony is that if we were to have a single payer or other form of universal healthcare like they do in France, this little girl likely would have died. In France they use "Statistical prognostic" approach which in these sorts of cases withhold NICU services for infants with statistically low outcomes. Edit: couldn't find data for premies at 25 weeks, but at 37 weeks and below, survival rate in the US is higher than European countries. http://www.cdc.gov/nchs/data/databriefs/db23.htm http://www.cdc.gov/nchs/data/databriefs/db23.htm
  - goodcanadian 13y ago
    I have a relative who works in a NICU. A 1 in 3 chance of death is actually pretty good odds (relatively speaking) for a premature baby in intensive care, so no, socialized medicine would not have killed this child.
  - rwissmann 13y ago
    Where does this myth come from that universal healthcare systems like the European ones deny coverage for black swan events? They don't. What procedures are covered has little to do with whether the system is single payer or not.
don_draper 13y ago
Tim Armstrong should not only resign but leave the country. We would be better off without losers like him.
delinka 13y ago
"We had two AOL-ers that had distressed babies that were born that we paid a million dollars each to make sure those babies were OK in general." Is this how health insurance works? Maybe AOL is "self-insured"? I don't understand AOL having anything to do with paying directly for medical treatment. Except, by virtue of making claims and costing an insurer money, the premiums increase. It's as if the insurers, ever-faithful capitalists they are, want to sell us insurance and can't believe we have the gall to make claims against our policies, and have convinced our employers to be equally appalled.
mkreef 13y ago
I also had a distressed baby a few years ago that spent months in the NICU of one of the best children's hospitals, had multiple surgeries, was in and out of the hospital for the first few months of his life. Ultimately an incident occurred that left him brain dead and on life support before he was 6 months old. We decided to remove life support and held him as he died in our arms. The family insurance plan offered by my ~1000 employee public tech company covered everything. I never saw a single bill and only had to pay the requisite co-pays. Always wondered how much it all costs...
- tarr11 13y ago
  My condolences. It costs a lot, but I'm sure the costs to your family were much higher that what the insurance company paid.
ZanyProgrammer 13y ago
He just exposed employee health data to the world-isn't that a violation of a bazillion privacy laws?
smoyer 13y ago
An amazing, baring article that brought back too many memories (our first son was early and classified "distressed", though not nearly to this degree). I'm glad to see she's doing so well, and I really have to wonder why pay health insurance premiums (that claim to cover this sort of catastrophic event), if you can't cash in on that policy should you ever need to (all the while praying that you don't). It's not like CEOs of large companies are selected for being empathetic, but in this case I'll predict that he doesn't survive the publicity surrounding his statements. Children are (and should be) important to a civilized society regardless of their present capabilities or future expectations.
mzr 13y ago
How about AOL stop whining about paying for medical care, and stop employing "digital prophets"? Perhaps then they could afford both the insurance costs and 401(k)s. http://www.uproxx.com/technology/2014/02/meet-david-shing-aka-shingy-aols-digital-prophet-possibly-tech-version-derek-zoolander/ http://www.uproxx.com/technology/2014/02/meet-david-shing-ak...
fiatmoney 13y ago
If your company cannot afford to pay $1M insurance claims, you shouldn't be in the business of insuring medical coverage. You should be re-insuring that risk. There are many companies that will be happy to do this for you. The fact that apparently AOL is on the hook for medical claims by its employees indicates they've made a reasoned judgement that their risk pool is diverse enough that it's worthwhile to self-insure, or they're incompetent. Either way, it's crazy to set yourself up as an insurer and then complain about having to pay claims. That's kind of the point.
- justin66 13y ago
  Exactly. The expectation from the outset would have been that they'd pay out less over time but experience more volatility, given the small risk pool. Complaining about the volatility is just nonsensical. I expect Anderson understood this but had to look for a reason to cut 401K matching in a profitable quarter, and increasing executive compensation didn't sound quite right, so... the high cost of saving babies! Whadda guy.
- bashcoder 13y ago
  Yes - there is a middle ground for self insured companies called a stop-loss provision. Companies can still get lower premiums through being self insured, but are also covered against huge losses over a specified amount. In addition to the horrible way this was handled by management, this is clearly the failure of the AOL benefits team, who exposed AOL to more risk than it was actually prepared for.
judk 13y ago
"My spouses' employer covers million-dollar expenses over 401k benefits, so the CEO is an asshole."
iandanforth 13y ago
So I believe the following is true: 1. The costs of the procedures involved are wildly inflated by the private sector healthcare system we employ. 2. Regardless of 1 the effort involved in keeping the child alive was extraordinary. 3. The effort involved was disproportionate to the benefit to society. It's unlikely the reader will agree with 3. That's ok. But I would ask anyone who disagrees with 3 to think carefully about if there is a line where the effort to save a child's life is too great, and if that line exists, how would you determine where it is, and given that method where is that line for you?
mratzloff 13y ago
I don't think you guys understand how this works. Armstrong earned his $12 million salary. Employees, meanwhile, receive health care as an unearned benefit bestowed on the commoners by the wealthy. If they abuse this gift (by having premature babies, cancer, etc.), they will be expected to make up for these extra costs elsewhere. Blame the law for this: clearly those employees who abuse the system should be fired outright, preferably on a conference call with 1000 people in attendance. Sadly, due to government overreach, it is considered illegal.
brown9-2 13y ago
The other very odd aspect of this story is blaming 7 million in new costs on Obamacare. A large company like aol would have already provided pretty good health benefits. It is very unlikely that the ACA's provisions about mandatory coverage for procedures (such as birth control) would have cost aol anything significant.
michaelochurch 13y ago
Tim Armstrong shows us directly what the upper class actually thinks of us. The mean-spirited worldview shouldn't be a surprise. What is a bit brazen is the "turn the poors on each other" behavior. Usually, it's not so obvious. He had hoped that the rank-and-file employees would, as a response to this phony scarcity (health benefits OR 401k, when the real problem is executive overcompensation) imposed from above, turn their frustrations and gripes at colleagues who get sick a lot (or have sick children, or sick parents) and that the environmental change would, perhaps, prune the company of a few sick people. It didn't work. Now everyone hates him. Good. I hope he dies alone, broke, and miserable. (The "broke" part probably won't happen, but one can dream.) Whenever the upper class tries to turn the rest of us against each other (say, Mission lifers vs. Google bus riders, who are on the same side even if they don't know it) we should always recognize it for what it is, and attack the real enemy with our combined force.
- late2part 13y ago
  "shows us directly what the upper class actually thinks of us." #1 - Tim Armstrong is an ugly man and doesn't speak for the upper class. #2 - Many many many readers on HN are upper class.
  - walshemj 13y ago
    yes you should never never call out individual emploees in this way WHY the Senior Non exec has not told the Chairman that Mr Armstrong has to go
facepalm 13y ago
I don't understand - doesn't insurance pay for such costs? Why is it an extra burden for a company if one of their employees needs money from the health insurance?
- lutusp 13y ago
  Because AOL chose to self-insure, there's no insurance company, just an asset pool within AOL itself.
  - facepalm 13y ago
    I see - didn't know that kind of thing exists. Seems to me they very simply not good enough at crunching the numbers then. Also, I think even insurances tend to have insurances against very high insurance claims. Maybe they should look into that kind of thing.
malkia 13y ago
Helping others is something that we did for very long long time "The third stage, based on findings from Europe between around 500,000 and 40,000 years ago, sees humans such as Homo heidelbergensis and Neanderthals developing deep-seated commitments to the welfare of others illustrated by a long adolescence and a dependence on hunting together. There is also archaeological evidence of the routine care of the injured or infirm over extended periods. These include the remains of a child with a congenital brain abnormality who was not abandoned, but lived until five or six years old. The researchers also note that there was a Neanderthal with a withered arm, deformed feet and blindness in one eye who must have been cared for, perhaps for as long as twenty years." http://news.discovery.com/human/neanderthals-were-compassionate-and-caring.htm http://news.discovery.com/human/neanderthals-were-compassion...
gojomo 13y ago
We need new words to describe new patterns of social news and commentary. For aspects of this situation, I first propose 'paraphrage': paraphrage (v): to paraphrase in a way to maximize outrage Tim Armstrong has been widely paraphraged as saying, "we're cutting your 401(k)s because two AOLers had distressed babies last year". Paraphraging not only brings many profitable clicks, but it removes complicating details that interfere with an audience's offensertainment. offensertainment (n): amusement or enjoyment felt by taking offense, and expressing moral indignation, usually in solidarity with some larger group The isolation and individual disempowerment of modern online life has driven many people to seek a compensating sense of joy, purpose, and belonging through offensertainment. Leading offensertainment providers include Gawker, the Huffington Post, and Slate, but the full participatory experience also requires forwarding, commentary, and button-pushing through services like Reddit, Facebook, Twitter – and HN.
davidf18 13y ago
I would be interested in the amount that AOL paid compared with the amount that Medicaid would have paid for the same infant. I would also like to know how much costs would be in France, UK, Germany, Japan.
skuunk1 13y ago
Isn't this the same guy who fired one of his employees on a conference call? http://finance.yahoo.com/news/listen-to-aol-ceo-tim-armstrong-fire-a-patch-employee-in-front-of-1-000-coworkers-140600015.html http://finance.yahoo.com/news/listen-to-aol-ceo-tim-armstron...

284 points by selmnoo 13y ago

Also see http://www.slate.com/articles/double_x/doublex/2014/02/tim_armstrong_blames_distressed_babies_for_aol_benefit_cuts_he_s_talking.single.html http://www.slate.com/articles/double_x/doublex/2014/02/tim_a... for the single-page version.

emp_zealoth 13y ago

Isn't it how the insurance works(and the very point of it)? Spreading the risk(and cost) over multitude of individuals? I his words utterly silly

scarmig 13y ago
Tim Armstrong blaming Obamacare (its mandate for medical coverage for situations like this) for the benefit cuts also has an interesting implication: If not for Obamacare, AOL would have provided a insurance plan that wouldn't have covered this child, and instead left her to die and her family in a permanent state of medical bankruptcy. ETA: For the record, I think most insurance policies have covered this for awhile. But Armstrong's either very confused, or, more likely, just struggling to find a way to point fingers at anything who's not him.
- MattBearman 13y ago
  left her to die and her family in a permanent state of medical bankruptcy. I can't get my head round this, as someone born and raised in the UK, America's health care system (or lack there of) is the single thing that will stop me ever wanting to live in the US.
  - dmm 13y ago
    Don't take financial or healthcare from online forum comments ( in other words the parent is full of shit).
  - icebraining 13y ago
    What about cases like this: http://www.theguardian.com/society/2010/aug/24/avastin-too-expensive-for-patients http://www.theguardian.com/society/2010/aug/24/avastin-too-e... ? I'm not a fan of the US system either, but I live in a country with State-run healthcare, and cost decisions like those are made every day.
    - lmm 13y ago
      A national healthcare system doesn't take away any of the things you get in the US. Many employers offer private medical insurance, and one can choose to pay for individual treatments privately if one wishes. So if you're wealthy or have a good employer, you're in just as good a position as you are in the US (and if you're poor, you're better off).
  - ars 13y ago
    The reason you can't wrap your head around it is that it's not actually true. People love saying that about America, but it's not true and never has been. For cases like that there is government insurance. It's called Medicaid, or Chip, or a bunch of other names, and it's available everywhere. (And it doesn't help that the person you replied to is doubly confused and combined two unrelated things to confuse him even more. The CEO was saying that Obamacare was an added expense - it had nothing to do with the babies.)
    - scarmig 13y ago
      To be absolutely clear: The CEO is the person who rhetorically conflated Obamacare and having to pay for the babies, not me. Don't try to poison the well by trying to shift his misspeaking to me.
- mp99e99 13y ago
  According to the article, the family had family insurance plan which would have existed before Obamacare, so I think this is a bit of a red herring. I think he was pointing to increased costs of Obamacare AND the distressed babies as examples. But I agree, if you can't use your insurance when you need it, whats the point of insurance?
  - DanBC 13y ago
    The point of insurance is to make money for people selling insurance. That's why those companies employ teams of people who look for ways to avoid paying insurance.
    - mindcrime 13y ago
      That's why those companies employ teams of people who look for ways to avoid paying insurance. You mean the people encouraging people to use proper fire-safety techniques, "baby-proof" their homes, eat more healthful foods, exercise regularly, etc? Of course every insurance company knows they will have to pay some claims at some point, it's a cost of doing business. So their entire purpose isn't to avoid paying claims, it's to charge enough in premiums to cover those claims while still making a profit.
- deleted 13y ago
  [deleted]
- josephfung 13y ago
  That's not exactly accurate - he's blaming Obamacare for them having to provide new insurance products that have a net higher cost going forward - the incident of distressed babies happened before the ACA, which means they did have that choice, and chose to pay the costs. Regarding what most insurance policies cover, there are actually several scenarios that would leave AOL on the hook. First, they could have a policy that has an Annual or Lifetime payment limit, which would leave the company (or individual) responsible for anything over. Alternatively, if the number of incidents was significantly higher than average for the carrier, AOL could see a significant premium increase due to the higher utilization of their plan. Or, they could actually be running a self-funded insurance program, which means they are managing the risk instead of relying on a separate insurance carrier. Either way, there are several situations in which AOL's costs could be significantly impacted by the situation.
HarryHirsch 13y ago
Spreading the risk is only half of insurance, the other half is deciding exactly what hazards are covered. In normal first-world countries you have some form of socialized healthcare with bioethics committees that decide what should society should pay for. You can have reasoned arguments about end-of-life care and very premature babies. But in America with the crazy system of employee-provided coverage it's the CEO that sets coverage limits, and generally speaking a company's interests are not aligned with society in general.

therobot24 13y ago

Armstrong's quotes are quite deplorable and the backpedaling is cringe-worthy but all i could think of while reading the article is Mrs. Lovejoy from the simpsons, "Won't somebody think of the children?!"

ivraatiems 13y ago
Because somebody should think of the children. And the geriatric. And the disabled. Part of the point of having a developed society with a developed healthcare system is using it to sustain people who can't sustain themselves. I think this article isn't important because one person happened to say something rude about somebody's daughter. It's important because it's a peek into how a lot of people are actually thinking about the world, and that's pretty scary.
- therobot24 13y ago
  not disagreeing with anything here, nor did i in the previous post, merely a light anecdote relating to how thick the writer is 'laying it on'
  - a3n 13y ago
    I think the writer can be forgiven for laying it on thick, since the writer is the mother of one of those distressed babies. And I think it's very useful for our empathy muscles to occasionally listen to "biased" people like this mother.
    - therobot24 13y ago
      so i lack empathy because i think an article that primarily uses empathy can be manipulative? classy...
      - a3n 13y ago
        therobot, I can't reply to your reply. (Except now I can, so I moved it. /HN) No, I don't think you lack empathy, although I can see how my comment could be taken that way. Apologies.

GuiA 13y ago

I'm glad this article was written. Armstrong's statements were so despicable that in this case "airing the dirty laundry" is a perfectly appropriate answer. I'm also surprised that his statements aren't "suable" in some form in the lawsuit happy country that is the United States of America. A friend of mine immediately pointed out to the numerous healthcare privacy laws in place; and another HN commenter pointed out on the original thread the possibility that the employees with the distressed babies would get discriminated against by their coworkers, after Armstrong's statements, due to the fact that they're probably identifiable internally by their team members. This is the same guy who fired an employee publicly during a company talk for (apparently) taking pictures. (http://www.sfgate.com/technology/businessinsider/article/AOL-CEO-Tim-Armstrong-Fired-Patch-s-Creative-4720914.php http://www.sfgate.com/technology/businessinsider/article/AOL...) What a sad, sad man. I hope that he gets scared and lonely as he gets older and older, when his billions won't change anything and when he realizes that all of his misery stems from his own choices.

selmnoo 13y ago
> I hope that he gets scared and lonely as he gets older and older, when his billions won't change anything and when he realizes that all of his misery stems from his own choices. I know the word "sociopath" gets thrown around a lot when we're talking about CEOs, but I really really think this guy fits the bill. And so, in all likelihood, he sadly will not feel or realize a thing even as he gets older.
cosmie 13y ago
> And to be honest, I'm surprised that his statements aren't "suable" in some form in the lawsuit happy country that is the United States of America. A friend of mine immediately pointed out to the numerous healthcare privacy laws in place; and another HN commenter pointed out on the original thread the possibility that the employees with the distressed babies would get discriminated against by their coworkers, after Armstrong's statements, due to the fact that they're probably identifiable internally by their team members. It very well may be a suable violation. HIPAA laws prohibit the "misuse and disclosures of PHI", and PHI includes a person's payment history, not just their medical records[1]. Such a breach by a covered entity is a criminal offence that can result in jail time by the offending employee[2]. As AOL isn't a covered entity (e.g. healthcare provider, insurance company, etc), I'm not sure whether it could be applied directly to Armstrong. You can probably push a HIPAA violation to the insurance company, however, as Armstrong most likely was told of these cases as the basis for group rate spikes during their insurance contract re-negotiation. And those are just justifications related to violating patient privacy laws. I'm sure a lawyer could also make a pretty strong case against Armstrong personally for defamation. [1]: http://en.wikipedia.org/wiki/Protected_health_information http://en.wikipedia.org/wiki/Protected_health_information [2]: https://www.ama-assn.org/ama/pub/physician-resources/solutions-managing-your-practice/coding-billing-insurance/hipaahealth-insurance-portability-accountability-act/hipaa-violations-enforcement.page https://www.ama-assn.org/ama/pub/physician-resources/solutio...

pwg 13y ago

Another interesting quote from the article: > Let’s set aside the fact that Armstrong—who took home $12 million in pay in 2012 Assuming the above is factual (and I have no reason to doubt it), he wanted to cut the 401(k) plan for everyone because of an expense that was one twelfth the size of his own pay that same year. Just a wee bit hippocritical there on his part.

Tycho 13y ago
Just as an aside, I think AOL had the highest stock price increase in 2012 of any comparable company. I wonder how much of compensation was due to capital gains.
eCa 13y ago
One sixth. There were two "distressed babies".

CrowderSoup 13y ago

I can't imagine that Tim Armstrong sits at home stewing about the high costs of distressed babies, but singling them out in this situation is deplorable.

kabdib 13y ago

Memo: Don't screw with someone who can write well. [Yup, Armstrong is despicable]

jobu 13y ago

She quoted this line from some of the TV coverage: “How many distressed babies does AOL pay this guy?” Does anyone know who said that? That's really dark, but also hilarious.

jhonovich 13y ago
http://valleywag.gawker.com/tim-armstrongs-salary-in-distressed-babies-1517788240 http://valleywag.gawker.com/tim-armstrongs-salary-in-distres...
keithpeter 13y ago
Less dark: we used to measure budgets, wages &c in units of Rovers (millirovers for small items) for some years in a place I worked in because the Principal decided to buy herself an official Rover - while at the same time freezing expenditure on such fripperies as textbooks, photocopying paper &c. That one ended up on extended sick leave and then a payoff...

gaius 13y ago

This guy is a walking disaster. How is it anyone is willing to work for him?

emp_zealoth 13y ago
He pays money?
- gaius 13y ago
  It wasn't the only reason, sure, but it has been a contributing factor to me resigning that I couldn't bear to make the management any richer...
fennecfoxen 13y ago
Well, if you work for him, you apparently get Compensation, including salary, 401(k) matching, and a health plan that'll cover your infant's medical expenses even if they run to like a million dollars. For someone or another, that's probably the best deal they were offered.
- judk 13y ago
  401k benefit is dropping, that's what this story was about before the baby gossip blogging buried the point.

deleted 13y ago

[deleted]

bigchewy 13y ago

Tim Armstrong has an incredible ability to say the wrong thing. The underlying topic, however, is fascinating. I do healthcare analytics for a living so I see how often a single neonatal ICU incident can consume 30% of an entire company's healthcare budget for the year (note: if you don't really understand healthcare, e.g. what self insuring means, please don't respond with comments that the insurance company pays the bills, this is what insurance is for, etc.). The economics of healthcare combined with the inability to have a rational discussion on how to allocate resources means that doctors / researchers will apply their research efforts where they will be rewarded. The race to keep younger and younger babies alive is fueled with ego and dollars. No one wants to talk about scarce resources and how to allocate dollars to have the most impact. I wish conversations stemming from idiotic comments like Armstrong's ended up being productive but they always end up with non-actionable ranting around taking executive pay and giving it to sick people. Unless someone proposes a mechanism to achieve that, it's just a dream / rant.

pavlov 13y ago
The race to keep younger and younger babies alive is fueled with ego and dollars. If you actually look at the global data on neonatal mortality [1], that doesn't seem to be true. Countries like Finland, France and Cuba perform better than the United States on this metric. These countries offer completely free healthcare to babies and pregnant mothers. Frankly, I find your assumption borderline offensive. Maybe you should take your USD-tinted healthcare analytics glasses off for a while and contemplate the possibility that human lives are worth saving. [1] http://data.worldbank.org/indicator/SH.DYN.NMRT http://data.worldbank.org/indicator/SH.DYN.NMRT
- thaumasiotes 13y ago
  You can look at the data, but you can't conclude much from it; those numbers are not comparable to each other. From 2008: http://pjmedia.com/blog/the-doctor-is-in-infant-mortality-comparisons-a-statistical-miscarriage/?singlepage=true http://pjmedia.com/blog/the-doctor-is-in-infant-mortality-co... Some (OK, rather extensive) points from the link: > In the United States, all infants who show signs of life at birth (take a breath, move voluntarily, have a heartbeat) are considered alive. > In Belgium and France — in fact, in most European Union countries — any baby born before 26 weeks gestation is not considered alive and therefore does not “count” against reported infant mortality rates. The baby at issue here would have been just under 22 weeks. (France changed their standard in 2008-2009; their page defining stillbirth ( http://www.insee.fr/en/methodes/default.asp?page=definitions/enfant-sans-vie.htm http://www.insee.fr/en/methodes/default.asp?page=definitions... ) now includes a warning that French numbers cannot be compared to other European neonatal mortality numbers, so it seems safe to assume the rest of Europe has carried on as before.) > According to the way statistics are calculated in Canada, Germany, and Austria, a premature baby weighing <500g is not considered a living child. The article baby weighed well over 500g. But this is quite relevant to the question of who has better neonatal mortality. > In Switzerland and other parts of Europe, a baby born who is less than 30 centimeters long is not counted as a live birth. Therefore, unlike in the U.S., such high-risk infants cannot affect Swiss infant mortality rates. This baby's length is not reported, so this is of questionable relevance to this particular baby. But, again, it remains very relevant to the question of "do countries like Finland, France, and Cuba have better neonatal mortality than the US?" > If a child in Hong Kong or Japan is born alive but dies within the first 24 hours of birth, he or she is reported as a “miscarriage” and does not affect the country’s reported infant mortality rates. This could be a non-premature, 8-pound baby! > Efforts to salvage these tiny babies reflect this classification. Since 2000, 42 of the world’s 52 surviving babies weighing less than 400g (0.9 lbs.) were born in the United States. Still think "USD-tinted healthcare analytics" biases you against saving premature babies? Full disclosure: I'm with your parent; I consider spending so much pumping life into these very premature "babies" a self-aggrandizing waste of time, effort, and money. But your comment seems to be grotesquely misinformed.

woodchuck64 13y ago

Curious that AOL had to pay millions of dollars for insurance claims. Isn't that the insurance company's responsibility?

fennecfoxen 13y ago
Self-insured group health plan.
lutusp 13y ago
The entire point of this issue is that AOL chose to self-insure. That means there was no insurance company.
- ars 13y ago
  They should have gotten secondary catastrophic insurance. I.e. only for claims over some dollar amount, which are very rare and very cheap to insure for.
woodchuck64 13y ago
AOL decides to take on the responsibilities and risks of an insurance company and then blames the employees and Obamacare when it doesn't work out? Wow. Armstrong is quite a piece of work.

fredgrott 13y ago

so wait Tim's Logic... 1. Baby born Medical cots $1 Million, INSURANCe COStS $250,00 and yet Tim decides to eliminate 401ks to balance benefits costs over something that does not increase insurance costs? You have to have a significant amount of $250,000 in an insurance pool of AOL employees before that happens..one is not the number that triggers it. @. He also cited Obamacare. Obamacare is by design to get businesses to pay healthcare for those at-risk employees in the low income brackets so that that preventive health care spent on them decreases the huge medacaid expenses seen later by THE FEDeral Government.Lets not even mention the productivity studies that state employees are more productive when not worrying about uncovered medical expenses. Seems tome the AOL board shold remove this CEO for gross lacking of clear thinking skills

nilsbunger 13y ago

AOL could've chosen a 3rd party insurance company instead of self-insuring. Self-insuring was probably a decision intended to save money compared to getting an external health provider. The CEO could conclude that these outlier events create too much unpredictability for the bottom line, and thus move the company to an external healthcare provider. Heck, they could even fire the CFO or whoever made the cost-benefit analysis if it was wrong. But blaming the employees, who didn’t create this situation? Unacceptable.

ryguytilidie 13y ago
Thats the real shocking part here. AOL made a poor business decision, paid for it, and the CEO, the very person in charge of business decisions, blames medical complications from a fucking baby. It is absolutely unfathomably terrible from a quality human being perspective.
- BSousa 13y ago
  Just in case the author is reading, change the fucking word placement please.
brown9-2 13y ago
Isn't self insuring generally considered more efficient for companies of this size? I can't find the link right now but I read somewhere that it is common for large companies that self-insure to buy reinsurance to cover themselves against large payouts like in Armstrong's mythical example. The company will typically have an insurance policy for their insurance policy.
tsotha 13y ago
Third party insurance doesn't necessarily save you when this happens. I worked for a company with third party insurance, and when one of my coworkers had a kidney transplant we lost money that quarter as a result of extra charges.

paul 13y ago

My daughter had a similar birth and hospital stay, which also produced a million dollar insurance bill. It costs about $10,000/day to stay in the NICU. I was never able work out why it costs so much, except that this is a major profit center for hospitals, and they use the money to cover other, money losing, departments. Fortunately Google is run by good people, and they were never anything other than supportive. I'm grateful for having had access to the best care for her. I do think our medical system needs some rethinking though.

fennecfoxen 13y ago
If we think microeconomics for a moment: healthcare for distressed infants could be a textbook example of inelastic demand. Q: How much are you willing to pay to save the life of this child? A: ALL THE MONEY! AND MORE!!
- thaumasiotes 13y ago
  People are a little more willing to spend someone else's money on less-than-worthwhile pursuits than they are to spend their own. As long as the customers aren't bearing the cost, everything they buy will have a similarly inelastic demand. Healthcare for distressed infants is certainly not an example of inelastic demand where people have to pay for it themselves; even food for healthy infants (a much smaller, and much more cost-effective, expense) doesn't show inelastic demand.
  - ForHackernews 13y ago
    > Healthcare for distressed infants is certainly not an example of inelastic demand where people have to pay for it themselves Are you kidding me? If it was a question of saving my child's life, I'd spend every last cent I had and then go sell a kidney.
    - thaumasiotes 13y ago
      I gave you an example. Mothers uncertain of their ability to raise an infant will abandon it to die (this is traditionally called "exposure"). It's a practice at least as old as humanity. And it conclusively demonstrates that the demand for infant care is not inelastic; these mothers aren't killing themselves trying to preserve their nonviable children. Rather, they're killing the children so that they don't die themselves in the effort to save a doomed child.

ekidd 13y ago

I'm delighted to hear that this child is doing well, and I'm utterly appalled at Tim Armstrong's attitudes towards the lives of his employee's children. Apparently it's possible to pay a programmer $100K/year, but spending ten times that to save the life of one of his employee's children is absolutely unacceptable. I'll be sure to keep that in mind the next time I hear from an AOL recruiter. The whole point of insurance is that a middle-class family can afford to pay $12,000 or $18,000 in premiums per year, but they can't easily afford a $1M black swan medical event. So the insurance company spreads the risk out over a large pool. The system breaks down, of course, if the pool is too small. A company with 10 employees probably can't absorb a $1M expense either. But AOL has 5,600 employees and it had $1.05B in net income in 2012. They can afford it to cover expenses, even if they decide to self-insure. Of course, another solution is to make the risk pool as big as humanly possible and to get employers out of the insurance business completely, so that no startup needs to worry about medical expenses. The AMA is a messy political compromise to do exactly that. But Tim Armstrong is also upset about the AMA. So I'm not quite sure what his ideal outcome is here.

dlokshin 13y ago
The irony is that if we were to have a single payer or other form of universal healthcare like they do in France, this little girl likely would have died. In France they use "Statistical prognostic" approach which in these sorts of cases withhold NICU services for infants with statistically low outcomes. Edit: couldn't find data for premies at 25 weeks, but at 37 weeks and below, survival rate in the US is higher than European countries. http://www.cdc.gov/nchs/data/databriefs/db23.htm http://www.cdc.gov/nchs/data/databriefs/db23.htm
- goodcanadian 13y ago
  I have a relative who works in a NICU. A 1 in 3 chance of death is actually pretty good odds (relatively speaking) for a premature baby in intensive care, so no, socialized medicine would not have killed this child.
- rwissmann 13y ago
  Where does this myth come from that universal healthcare systems like the European ones deny coverage for black swan events? They don't. What procedures are covered has little to do with whether the system is single payer or not.

don_draper 13y ago

Tim Armstrong should not only resign but leave the country. We would be better off without losers like him.

delinka 13y ago

"We had two AOL-ers that had distressed babies that were born that we paid a million dollars each to make sure those babies were OK in general." Is this how health insurance works? Maybe AOL is "self-insured"? I don't understand AOL having anything to do with paying directly for medical treatment. Except, by virtue of making claims and costing an insurer money, the premiums increase. It's as if the insurers, ever-faithful capitalists they are, want to sell us insurance and can't believe we have the gall to make claims against our policies, and have convinced our employers to be equally appalled.

mkreef 13y ago

I also had a distressed baby a few years ago that spent months in the NICU of one of the best children's hospitals, had multiple surgeries, was in and out of the hospital for the first few months of his life. Ultimately an incident occurred that left him brain dead and on life support before he was 6 months old. We decided to remove life support and held him as he died in our arms. The family insurance plan offered by my ~1000 employee public tech company covered everything. I never saw a single bill and only had to pay the requisite co-pays. Always wondered how much it all costs...

tarr11 13y ago
My condolences. It costs a lot, but I'm sure the costs to your family were much higher that what the insurance company paid.

ZanyProgrammer 13y ago

He just exposed employee health data to the world-isn't that a violation of a bazillion privacy laws?

smoyer 13y ago

An amazing, baring article that brought back too many memories (our first son was early and classified "distressed", though not nearly to this degree). I'm glad to see she's doing so well, and I really have to wonder why pay health insurance premiums (that claim to cover this sort of catastrophic event), if you can't cash in on that policy should you ever need to (all the while praying that you don't). It's not like CEOs of large companies are selected for being empathetic, but in this case I'll predict that he doesn't survive the publicity surrounding his statements. Children are (and should be) important to a civilized society regardless of their present capabilities or future expectations.

mzr 13y ago

How about AOL stop whining about paying for medical care, and stop employing "digital prophets"? Perhaps then they could afford both the insurance costs and 401(k)s. http://www.uproxx.com/technology/2014/02/meet-david-shing-aka-shingy-aols-digital-prophet-possibly-tech-version-derek-zoolander/ http://www.uproxx.com/technology/2014/02/meet-david-shing-ak...

fiatmoney 13y ago

If your company cannot afford to pay $1M insurance claims, you shouldn't be in the business of insuring medical coverage. You should be re-insuring that risk. There are many companies that will be happy to do this for you. The fact that apparently AOL is on the hook for medical claims by its employees indicates they've made a reasoned judgement that their risk pool is diverse enough that it's worthwhile to self-insure, or they're incompetent. Either way, it's crazy to set yourself up as an insurer and then complain about having to pay claims. That's kind of the point.

justin66 13y ago
Exactly. The expectation from the outset would have been that they'd pay out less over time but experience more volatility, given the small risk pool. Complaining about the volatility is just nonsensical. I expect Anderson understood this but had to look for a reason to cut 401K matching in a profitable quarter, and increasing executive compensation didn't sound quite right, so... the high cost of saving babies! Whadda guy.
bashcoder 13y ago
Yes - there is a middle ground for self insured companies called a stop-loss provision. Companies can still get lower premiums through being self insured, but are also covered against huge losses over a specified amount. In addition to the horrible way this was handled by management, this is clearly the failure of the AOL benefits team, who exposed AOL to more risk than it was actually prepared for.

judk 13y ago

"My spouses' employer covers million-dollar expenses over 401k benefits, so the CEO is an asshole."

iandanforth 13y ago

So I believe the following is true: 1. The costs of the procedures involved are wildly inflated by the private sector healthcare system we employ. 2. Regardless of 1 the effort involved in keeping the child alive was extraordinary. 3. The effort involved was disproportionate to the benefit to society. It's unlikely the reader will agree with 3. That's ok. But I would ask anyone who disagrees with 3 to think carefully about if there is a line where the effort to save a child's life is too great, and if that line exists, how would you determine where it is, and given that method where is that line for you?

mratzloff 13y ago

I don't think you guys understand how this works. Armstrong earned his $12 million salary. Employees, meanwhile, receive health care as an unearned benefit bestowed on the commoners by the wealthy. If they abuse this gift (by having premature babies, cancer, etc.), they will be expected to make up for these extra costs elsewhere. Blame the law for this: clearly those employees who abuse the system should be fired outright, preferably on a conference call with 1000 people in attendance. Sadly, due to government overreach, it is considered illegal.

brown9-2 13y ago

The other very odd aspect of this story is blaming 7 million in new costs on Obamacare. A large company like aol would have already provided pretty good health benefits. It is very unlikely that the ACA's provisions about mandatory coverage for procedures (such as birth control) would have cost aol anything significant.

michaelochurch 13y ago

Tim Armstrong shows us directly what the upper class actually thinks of us. The mean-spirited worldview shouldn't be a surprise. What is a bit brazen is the "turn the poors on each other" behavior. Usually, it's not so obvious. He had hoped that the rank-and-file employees would, as a response to this phony scarcity (health benefits OR 401k, when the real problem is executive overcompensation) imposed from above, turn their frustrations and gripes at colleagues who get sick a lot (or have sick children, or sick parents) and that the environmental change would, perhaps, prune the company of a few sick people. It didn't work. Now everyone hates him. Good. I hope he dies alone, broke, and miserable. (The "broke" part probably won't happen, but one can dream.) Whenever the upper class tries to turn the rest of us against each other (say, Mission lifers vs. Google bus riders, who are on the same side even if they don't know it) we should always recognize it for what it is, and attack the real enemy with our combined force.

late2part 13y ago
"shows us directly what the upper class actually thinks of us." #1 - Tim Armstrong is an ugly man and doesn't speak for the upper class. #2 - Many many many readers on HN are upper class.
- walshemj 13y ago
  yes you should never never call out individual emploees in this way WHY the Senior Non exec has not told the Chairman that Mr Armstrong has to go

facepalm 13y ago

I don't understand - doesn't insurance pay for such costs? Why is it an extra burden for a company if one of their employees needs money from the health insurance?

lutusp 13y ago
Because AOL chose to self-insure, there's no insurance company, just an asset pool within AOL itself.
- facepalm 13y ago
  I see - didn't know that kind of thing exists. Seems to me they very simply not good enough at crunching the numbers then. Also, I think even insurances tend to have insurances against very high insurance claims. Maybe they should look into that kind of thing.

malkia 13y ago

Helping others is something that we did for very long long time "The third stage, based on findings from Europe between around 500,000 and 40,000 years ago, sees humans such as Homo heidelbergensis and Neanderthals developing deep-seated commitments to the welfare of others illustrated by a long adolescence and a dependence on hunting together. There is also archaeological evidence of the routine care of the injured or infirm over extended periods. These include the remains of a child with a congenital brain abnormality who was not abandoned, but lived until five or six years old. The researchers also note that there was a Neanderthal with a withered arm, deformed feet and blindness in one eye who must have been cared for, perhaps for as long as twenty years." http://news.discovery.com/human/neanderthals-were-compassionate-and-caring.htm http://news.discovery.com/human/neanderthals-were-compassion...

gojomo 13y ago

We need new words to describe new patterns of social news and commentary. For aspects of this situation, I first propose 'paraphrage': paraphrage (v): to paraphrase in a way to maximize outrage Tim Armstrong has been widely paraphraged as saying, "we're cutting your 401(k)s because two AOLers had distressed babies last year". Paraphraging not only brings many profitable clicks, but it removes complicating details that interfere with an audience's offensertainment. offensertainment (n): amusement or enjoyment felt by taking offense, and expressing moral indignation, usually in solidarity with some larger group The isolation and individual disempowerment of modern online life has driven many people to seek a compensating sense of joy, purpose, and belonging through offensertainment. Leading offensertainment providers include Gawker, the Huffington Post, and Slate, but the full participatory experience also requires forwarding, commentary, and button-pushing through services like Reddit, Facebook, Twitter – and HN.

davidf18 13y ago

I would be interested in the amount that AOL paid compared with the amount that Medicaid would have paid for the same infant. I would also like to know how much costs would be in France, UK, Germany, Japan.

skuunk1 13y ago

Isn't this the same guy who fired one of his employees on a conference call? http://finance.yahoo.com/news/listen-to-aol-ceo-tim-armstrong-fire-a-patch-employee-in-front-of-1-000-coworkers-140600015.html http://finance.yahoo.com/news/listen-to-aol-ceo-tim-armstron...