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.
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.
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.
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.
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.