Remind us, Highmark: Why sponsor national PGA golf events?
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Let us leave aside, for the moment, the sordid tale of Ken Melani and his young employee/mistress, whether Highmark should have fired him (doesn't every company want a disgraced CEO at the helm?) and what policies he may have violated in the course of his midlife, punch-your-lover's-husband crisis.
Let us, instead, consider the money. Specifically, the millions of dollars that the nonprofit insurance company is paying for the exclusive right to sponsor, equip and staff medical trailers at PGA Tour golfing events nationwide for the next four years.
The trailers bear the logo of Allegheny Sports Medicine. That's a division of the West Penn Allegheny Orthopaedic and Rehabilitation Institute, which Highmark is acquiring along with the rest of the West Penn Allegheny Health System.
The sponsorship deal was negotiated, at least in part, by Melissa Myler, a relatively new Highmark employee who quickly became Dr. Melani's girlfriend.
People inside Highmark have told the Post-Gazette it cost $15 million, was poorly executed by someone out of her depth, and should have been approved by the Highmark board. But Ms. Myler's lawyer counters that it's more like $6 million, that her involvement improved the contract and that Dr. Melani was authorized to sign off on it without board approval.
Either way, it's a great deal for the PGA, which not only gets free medical care for its golfers all over the country but also rakes in millions in sponsorship gravy. Somehow, though, I doubt that many of Highmark's 4.8 million subscribers in Pennsylvania and West Virginia are thrilled about paying for it.
The deal, but not the price tag, was announced in January. As Post-Gazette golf writer Gerry Dulac reported at the time, the arrangement would make Allegheny Sport Medicine the official sports medicine sponsor of the PGA Tour.
"The partnership between the PGA Tour and Allegheny Sports Medicine lets people know we have a world-class orthopedic facility right here in our hometown," Dr. Melani said then. "It's an ability to get the message out nationally and the ability to get it out locally."
The trailers, transported to more than 70 PGA Tour and Champions Tour events, are staffed by physical therapists, chiropractors and conditioning coaches. They feature equipment and rehabilitative and preventive care that is available to all players at a PGA Tour event.
"It's the greatest perk we have on the PGA Tour," Jim Furyk, 2003 U.S. Open champion, told Mr. Dulac. "I'd say 80 percent of the guys utilize the trailers. It's a busy place before a round and it's important for us."
None of this raised any public outcry at the time. But now that the sponsorship has re-emerged in the midst of an executive scandal, people are taking another look and not liking what they see.
First, there's the sense that the deal was struck primarily for bragging rights for Dr. Melani and other Highmark executives, to give them ego-boosting, elbow-rubbing privileges with big-name golf pros.
Then there's the disconnect between the price tag -- whether it's $15 million or $6 million -- and the ever-rising cost of Highmark's premiums eating into stagnant wages in a down economy. Now the company's customers are financing therapy for pro golfers, too? In what universe is this a good idea?
I understand there's an entire industry built around sports marketing and that companies will pay dearly to slap their names on a stadium or event. Some of it may be defensive, to keep the competition from grabbing the reflected glory (maybe Highmark was warding off UPMC trailers at the PGA). But for a local, nonprofit insurer to sink millions into far-flung PR makes as much sense as the local, nonprofit UPMC buying giant billboards in Times Square, as it once did. That is, none.
The deal is irksome given that Highmark sought a nearly 10 percent rate hike in July for its lowest-income insurance product (eventually pulling back to 4.9 percent). It outsourced 150 back-office jobs 16 months ago, and is pursuing an aggressive drug formulary that will save employers money on generics but put specialty medicines beyond most people's reach.
So it's no shock that some Highmark subscribers feel taken. Nobody from Allegheny Sports Medicine is giving us free massages when we come home tired and achy, having worked all day to afford our health insurance. Yet here we are, financing physical therapy for professional athletes in Texas and California whose income likely far surpasses our own.
Why on earth does Allegheny Sports Medicine, a Pittsburgh provider, need to spread its name around the country anyway? Are golfers from Oklahoma and Arizona going to fly in for chiropractic care because they saw the name on a trailer or liked the treatment they received?
Why, for that matter, does a regional insurance company think it's a wise investment to buy name recognition for a local medical program on golf courses across America? Highmark subsidiaries sell dental insurance and vision care nationwide, but is anybody going to buy them because of a medical trailer with the Allegheny Sports Medicine logo?
O.J. Simpson once swore to find his wife's "real" killer, but the only place he seemed to be looking was on golf courses across America. If Highmark execs want to find out why their subscribers are so teed off, they might try working the same ground.
First Published April 8, 2012 12:00 am