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.
"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."
"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. And those are the things that add up into our benefits cost. So when we had the final decision about what benefits to cut because of the increased healthcare costs, we made the decision, and I made the decision, to basically change the 401(k) plan." -- Armstrong
Whether or not it's absolutely unacceptable to him is debatable, but it is clearly acceptable to use the cost of preserving the lives of his employees' children as a scapegoat, when many other expenses (large engineering salaries, "digital prophets" [1]) could have been noted as examples of excessive expenditures. What ekidd is mad about, and I think reasonably so, is that the attitude of "oh, our employee's child almost died which was costly, so let's cut some benefits" as an acceptable mindset to Armstrong is very troubling. In so doing, he is passing on the price of expensive healthcare costs from AOL to his employees, in the form of a slashed 401k. Now that seems to be pretty close to ekidd's paraphrase -- Armstrong does consider it unacceptable for AOL to pay for his employee's child's healthcare, because he wants to pass on that cost to his employees vis-a-vis 401k cuts.
Now at least in my view, I'd hope my employer would place employees' wellbeing first, and consider cutting benefits as a last possible option, but maybe you have a different view.
Setting aside the fact that the post above is obviously not quote from Armstrong, we can't say for certainty what he said because all we have is a reported quote in the press with the sources cited as an unnamed AOL employee's transcript of the call.
The alleged quote from the transcript is:
>“Two things that happened in 2012,” he said, according to a transcript provided by an AOL employee. “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. And those are the things that add up into our benefits cost. So when we had the final decision about what benefits to cut because of the increased healthcare costs, we made the decision, and I made the decision, to basically change the 401(k) plan.”
If you believe the quote is accurate, Armstrong is clearly singling out these two babies as contributing to the reason why the 401k plan was changed.
But we lack all of the surrounding context, and the quote above wasn't even continuous. It does, however, fit the mold of televised arguments he gave on the subject. Obamacare and rising health care costs were cited and a decision to not completely absorb those and pass some of the increase to employees in the form of other benefit reductions was the argument he made in a few different places.
A poor comment to make considering the whole point of insurance and how it works, as well as the size of AOL's insurance risk pool IMHO, but then, I don't know if he even made that comment or qualified it with something like "But this is exactly the kind of worthy benefit and cost we believe should be prioritized above certain other existing benefits."
Given his response, it gives me the impression that he made a comment to this effect, and that it was a poor one to make, but that's just an impression. And it's even harder to say where his heart is on the matter. At the very least he has mentioned in interviews that they actively prioritized their benefits package in light of costs, and clearly healthcare was a higher priority than the 401k benefits that were cut. So for the poster to conclude that Armstrong deems covering the costs of these sick babies "unacceptable", I don't see it. The opposite, if anything. Whether or not he used the sick babies to rhetorically deflect from the fact that AOL is choosing not to absorb all of the rising costs and is passing them on to employees...well that is another story in my mind.
I wrote in haste while the mother's article was fresh in my mind and I was still assimilating Armstrong's latter statements, and it colored my reaction. I went back to rewrite exactly that part 10 minutes later and I was locked out by noprocrast. Consider my post retracted (and feel free to moderate as you wish, up to and including deleting my account).
I still have deep problems with his statement, and I haven't figured out how to articulate them better yet. But for now, my apologies to Tim Armstrong—whatever he said does not justify my hasty and unacceptably uncharitable reading.
What is your interpretation Paul? What did he say? Do you think Tim did anything wrong or do you advice that Tim sticks to his guns on this one & shouldn't have caved in with that second memo?
He shouldn't have mentioned specific cases. If he felt the company had to cut elsewhere to compensate for high medical costs, he should have left it at that level of detail. But I don't see how you get from what he actually said to
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.
Frankly, posting and upvoting that sort of comment is the behavior of a lynch mob.
I think saying "I'm utterly appalled" on an online chat board is a lot different from joining a mob to kill someone. Let's not make any Tom Perkins-esque comparisons here [1].
And people should certainly be allowed to react when those in positions of power say appalling things. Whether he thinks that is absolutely unacceptable is doubtful, but he clearly thinks that the $7.1M in healthcare spending is something that should have to come out of the workers' 401k. The OP wasn't quoting Armstrong, but what Armstrong actually said/did clearly mirrors OP's paraphrasing -- that health spending shouldn't be the duty of AOL, because it should be passed on to the employees through the form of a 401k cut.
Using the term "lynch mob" metaphorically is a long established usage. But in case you weren't just pretending to misunderstand me, I didn't mean that HN users are literally planning to kill Tim Armstrong. I meant the forces that drive lynch mobs are driving people here.
Oh don't get me wrong, I'm well aware you weren't claiming that people are planning to kill Armstrong. I'm just saying you're making ridiculous claims over a fairly tame paraphrase. Even from the well established metaphorical usage standpoint, this is nothing like a lynch mob. It's one guy expressing his frustrations. And he should be able to do that without you saying that the people supporting/upvoting him are like a lynch mob. Why do you think that everyone else responding to your post drawing those comparisons also thought the use of the term "lynch mob" was out of place?
It should be fairly clear from the responses to your post that the characterization of this reaction as a "lynch mob" does not meet the established standard of usage of this term.
Getting universally criticized for a statement is not a qualification for assuming "lynch mob" victim status.
> I meant the forces that drive lynch mobs are driving people here.
This particular statement can be interpreted in so many different ways that it remains meaningless as it stands.
...but he clearly thinks that the $7.1M in healthcare spending is something that should have to come out of the workers' 401k.
Which is utterly reasonable. AOL has allocated $X for employee compensation. The law mandates health care go up by $7.1M, so something else must be cut by $7.1M.
This is certainly bad for workers who prefer the 401k benefits to whatever Obamacare benefits are costing $7.1M (and it seems like this is many workers). But that's a problem with the ACA - blaming TA for that is silly.
I'm acutely aware that I'm effectively posting on your territory, but the term "lynch mob" seems to be almost comically inappropriate as a description of what actually occurred.
> Frankly, posting and upvoting that sort of comment is the behavior of a lynch mob.
Have you been reading the comments on the many political articles that now cross the front page of this site? The quoted comment is fairly tame stuff compared to some of the opinions expressed in those threads.
While the upvoted comment is a bit histrionic, I think it reflects the fact that Tim Armstrong could bring up specific medical cases as being contributing factors is a little frightening to most people.
We don't like to think about the reality that life or death situations we have no control over are being weighed on a balance sheet by people who's primary goal is making profits for shareholders.
I think Armstrong might be discomfited by the well deserved online education in social etiquette and the priority of life (of poorer people) over money. He sorely needs it and he will be the better for it, though a complete cure for him seems impossible.
> Did he say that?
Did I call you an ignorant money peddler, who thinks he is very smart because he can micro analyze statements and completely ignore the context in which the statement was made, as per his convenience?
No, he was cutting benefits in general and used healthcare expenses as a rationale for it.
This may be a good thing for the company's bottom line, but the optics are horrible. Even if the policy was sound (and I'm not sure it is), the delivery ruined it. It will be hard to say how he can be an effective leader at this point.
I don't see how you were disagreeing with me? He was making the 401k plan marginally worse, not cutting benefits in general. I wasn't saying anything about his ability to lead going forward, just that if their medical policy is going to continue to be willing to pay for these unusual events in the future that he probably doesn't view them as unacceptable.
He is cutting benefits overall, not completely, but it is still a cut. AOL decided to keep medical benefits high at the expense of retirement benefits. This is probably the right call, but the way that it was presented just made the entire thing look awful.
Regardless of what benefits were cut, citing specific instances of medical care as a cause for the cuts is such a horrendous mistake that it will be difficult for him to effectively lead. That was my addition. When your employees turn against you, and you have made such a blunder publicly so as to make potential employees not want to join AOL, it will be hard to lead. And the worst part is, it's not necessarily the cut itself that is the issue, but how it was presented and rationalized. Had he just said that healthcare costs are increasing, so to avoid cutting health benefits we are reducing (marginally) your retirement benefits, he might have been okay.
I mean, look at the way this sounds: Why is my 401k contribution lower this year? Because your coworkers had babies.
That may not be what he said, but that's where the story went.
He announced the company would be giving less money to employees, and blamed it on some babies, when he's earning, by himself, much more than the two incidents cost, and supposedly presided over a successful quarter.
Seems, if nothing else, a poor way of handling things. Even if you're a "tight-fisted homo-economomicus shareholder" the end result is bad, because in the end his gaffe and the subsequent publicity meant that he reversed the cuts, so the company won't get to keep that money.
I'm not against high pay for executives or that kind of thing, so I'm fine with him making oodles of money if he's doing a good job. Part of doing a good job in that position, though, is not sticking one's foot in one's mouth.
Also: I think there are certainly times when people just try and twist words to score political points, whatever the actual facts. This case doesn't strike me as one of those, really.
He announced the company would be giving less money to employees, and blamed it on some babies...
He announced the company would be giving the same money to employees but the distribution would change: more healthcare (as mandated by Obamacare), less 401k.
In my case, I read the mother's article first, and then Tim Armstrong's original remarks and followup statements. This substantially colored my reading, and not for the better.
If I brought political biases to my reading, they had more to do with a pre-modern conception of loyalty: true authority is built on loyalty towards those who are led. And I looked at this from the perspective of a parent, and from that perspective, the lives of children often weigh heavier than things like self-survival.
AOL absolutely did not desert these parents, and that's where my post was is undeniably in the wrong—and where I wanted to revise it shortly after posting, before I got caught by noprocrast.
Now, I've said things in my life which were dumb and out-of-place. (In this thread, even.) And upon re-reading, I'm willing to extend Tim Armstrong the benefit of the doubt: he may have hit upon a spectacularly poor way to explain why employees were losing benefits, despite having the best of intentions. But his remarks could be easily and predictably de-anonymized, with obvious consequences:
On Thursday, within minutes of Armstrong’s utterance, my husband began fielding questions from colleagues: Wasn’t the CEO talking about his baby?
And not did these remarks effectively single out a specific employee, they also singled out a specific 1-year-old girl—who already has significant problems—and they linked her to the company-wide benefit reductions (at least for those coworkers who knew the parents). And this is where I got too angry to read Tim Armstrong's actual words accurately. Which I regret.
The craziest thing to me is what an utterly small drop in the bucket this is and how Tim embarrassed the entire company and their stockholders over an expense that is <1% of AOLs revenue and is less than his yearly salary. He should have been immediately fired for both insensitivity and short-sightedness to the point of incompetence.
He is quoted saying that right on the linked page. But here is the exact quote, in case you haven't perused the original submission:
"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. And those are the things that add up into our benefits cost. So when we had the final decision about what benefits to cut because of the increased healthcare costs, we made the decision, and I made the decision, to basically change the 401(k) plan."
...but spending ten times that to save the life of one of his employee's children is absolutely unacceptable.
It's not unacceptable according to TA. AOL insurance (pre-Obamacare) did pay for it:
"Two things that happened in 2012. 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. And those are the things that add up into our benefits cost. So when we had the final decision about what benefits to cut because of the increased healthcare costs..."
Oh, I think I know. You are saying that ACA increased their costs, so they had to cut benefits to their employees because the federal government demanded that the company pay more money to the insurance companies so that the insurance companies could subsidize healthcare for unemployed and underemployed people? And Armstrong said he was cutting 401k benefits because of these cost increases?
I figure I am going balls deep into an internet tickle fight, but so be it.
Its not AOL's or his responsibility. If anything you can put the cost onto society as a whole. This is the type of insurance the ACA should have been instead of the crap we got. It should have covered catastrophic care, which means million dollar babies provided they can be saved.
No company should feel guilty not keeping up benefits because one or two cases blew the bank. They are not there to fix everything. Insurance is a benefit and benefits can be exhausted or become so costly that the cost of doing business means not being in business.
So yeah, it sucks. Welcome to the world. The solution is to put catastrophic care into the hands of government and let them decide who gets the care. Let employers and everyday people shop for the best care for non catastrophic care and do it across state lines. Put them all on equal footing.
So summary.
1) Government takes care of catastrophic care. They set the limits, the decide who. If you want more you buy it on the secondary market.
2) Individuals and business buy insurance from any/all provides regardless of state. The only rule is, preexisting conditions do not disqualify you. They can however put you into rule #1
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.
The irony is that France didn't even allow most withholding of heroic neonatal care until 2004+ (e.g, la loi Leonetti, etc), whereas the US regularly refused such care until 1984 and then enacted statutory allowances for refusing futile neonatal care in 1986 (Baby Doe revised). Also see the Texas Advance Directives Act of 1999 and withdrawal of futile neonatal care pursuant to it.
In fact, France still does not allow withholding of nutrition and fluids from an infant not on a ventilator, a practice that is permissible in the US when care is deemed futile.
If you want an example of a state that practices more aggressive withholding of care in the NICU, look at the Netherlands, which has a private insurance model more akin to the US. According to the Nuffield report on neonatal medicine, "In the Netherlands, a consensus had been reached by 2003 that ... Dutch perinatal centers should not normally resuscitate and treat extremely premature babies born before 25 weeks of gestation, because of poor outcomes."
According to the report, the difference between the US model and the Netherlands could be seen in that twice as many premature infants born in the US survived to the age of two, but in the US five times as many premature infants had disabling cerebral palsy.
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.
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.
The assumption here being that a live birth is as likely in France as it is in the US. What we should be looking for is percentage of survival for infants born sub 25ish weeks or something like that (I don't have that data).
UPDATE: And as we see from this paper from the WHO, live birth in the US is not what it means in France, for example. In the US it's any sign of life, in France and Belgium it's living for some period of time: "it has also been common practice in several countries (e.g. Belgium, France, Spain) to register as live births only those infants who survived for a specified period beyond birth"
Those statistics aren't exactly Apples to Apples between countries. There are just too many ways countries can cheat.
For instance, some countries (like France) ignore births before x weeks whereas most countries (including the U.S.) include all births.
Beyond that, the U.S. leads the world in premature birth survival despite also leading the world in assisting people with fertility problems to become pregnant and add to the statistics that on the surface seem problematic for the U.S.
Even your own data completely undermines your point. All those other countries have very comparable preterm infant mortality rates when measured against the US. You say the girl "likely" would have died in France, but in Norway and Sweden (two of the most socialist countries in the world) the girl would have had a better chance of surviving at 25 weeks. By your own data that is supposedly proving the ineffectiveness of single payer healthcare.
Go back to Fox News where people don't actually care about facts if you want to make sensational arguments with zero evidence.
Except for the part where this is 37 weeks and not 25 weeks which is 30% of the entire duration of pregnancy. The story is from AOL is at the 5 month mark which means it could be even earlier than that.
Can't go back to watching Fox News because I don't have a TV. Nice, red herring, though.
In the UK they give services, and reasses on an ongoing basis, so different than the French. Added some info for under 37 weeks, where the US comes out on top.
So are you admitting that your original point about single payer healthcare is totally BS? Because the UK has single payer and apparently you think they do a decent job with this situation.
If you had government mandated "socialised" health care like the majority of the developed world, the actual cost to provide health care would have been nowhere near as much.
I cannot fathom that people accept "12 to 18 $K" as a reasonable amount of money for health care.
>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.
All he said is they changed the 401k plan because of unexpectedly high medical expenses. He didn't say or imply he wished they didn't save the baby. I can give the kid's mother a pass on two pages of disjointed emoting, but I don't understand why a disinterested observer would write something like you've written.
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
Do you really think it's possible to have a comprehensive understanding of "Tim Armstrong's attitudes towards the lives of his employee's children" based on this one little blurb? I mean, seriously... I can't help but think people are constructing a caricature of the man, based on a very limited understanding, and heavily influenced by their own preconceived biases and generic "Robber Barrons, evil, muwahahahaha" stereotypes.
I'm not saying that Tim Armstrong is a good person, as I don't know him. But I am very suspicious of this rush to judgment that seems to be going on here.
He chose to make it specific, rather than just saying 'employee medical insurance costs were higher than expected.' By using the specific medical problems of two families to cast management in a positive light and also to justify changing the firms pension contribution structure to be less generous, he made the decision to present these issues as a zero sum game in which the beneficiaries of medical insurance - something which is part of employee compensation to begin with - were presented as the cause of a reduction in the pension compensation of everyone else.
All of that may, or may not, be true. But none of it addresses the issue I was questioning, which is how anybody can claim to understand "Tim Armstrong's attitude towards the lives of his employee's children" based on nothing more than this one news article.
I'm saying we shouldn't be rushing to judgment, and creating this caricatured images of Armstrong (or anybody else) and basically screaming "off with his head", without sufficient information.
Again, I don't know him... never met the guy in my life. He may be a complete douchebag and a total jackass for all I know. But it would be premature to conclude any of that from this story.
You're just quibbling over semantics now. It's still just one "news incident" if you're prefer that lingo. And it's still a mistake for any of us to assume that we now know all about Tim Armstrong as a result.
You seem to think that the number of times someone makes a carefully prepared public statement needs to be greater than one to determine what they think on the subject.
I do not see how the logic follows there.
That it's reported in the news or published on his blog or written in a memoir or whatever is not the relevant fact here. The relevant fact is that it is something that he carefully planned to say and said, and that is sufficient information to have high confidence that it is what he meant to say and therefore what he thinks.
You seem to think that the number of times someone makes a carefully prepared public statement needs to be greater than one to determine what they think on the subject.
I do not see how the logic follows there.
Then there really isn't anything more to say. If you really think a person's attitude (which was the original issue under discussion in this sub-thread) can be thoroughly identified and analyzed and dissected based on one example of their speech, then so be it.
I happen to think human beings are far more complex than that, that context matters, that there are huge issues of subjective interpretation and nuance in play, and that it's a mistake for anybody to assume that they have some kind of deep insight into this guy, based just on this.
That it's reported in the news or published on his blog or written in a memoir or whatever is not the relevant fact here.
Nobody is claiming that. What I'm claiming is "insufficient data".
The relevant fact is that it is something that he carefully planned to say and said, and that is sufficient information to have high confidence that it is what he meant to say and therefore what he thinks.
The problem is going from "what he said" to "what you think he thinks". He said something very specific, and I see a lot of people making radical inferences and generalizations based off of that. What he said is what he said yes, but people aren't just talking about that, they're talking about their own interpretation of what he said, which is colored by their own biases and preconceptions... and, in this case, probably just a little bit of mob psychology.
AOL may be a self insured group where it pays all of the medical costs for its employees. The insurance company merely provides administrative services such processing claims and paying providers.
What I want to know is what was AOL doing with the money that it was supposedly buying insurance with was it not actually buying insurance but trying to self insure? and using the "insurance monney" to boost its books?
The next Question is are the employees 401k's safe and accounted for or is Aol like Maxwell?
I was LinkedIn stalked by AOL HR two days before this happened. I thought about doing the interview just to get back in the habit but ended up declining the invite and indicating Armstrong's hamfistedness was the reason why.
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.