Distressed by Baby Controversy, AOL’s Armstrong Reverses 401(K) Policy

http://recode.net/2014/02/08/aol-reverses-401k-policy/

by protomyth • 12 years ago

30 55 12 years ago

RexRollman• 12 years ago

I know it will sound unfeeling but I have to wonder why, in a world with billions of people, we would spend a million dollars to keep just one human alive?

fogleman• 12 years ago

lolwut? For starters, a parent doesn't give a crap about those billions of people but would give their life for their own child.

adamnemecek• 12 years ago

Because one would hope that if the roles were reversed that s/he would get the same treatment.

ForHackernews• 12 years ago

Because part of what makes humans evolutionary successful is taking (sometimes drastic) steps to ensure the survival of the next generation. Maybe it isn't purely rational, but it's worked pretty well for us as a species.

slucidi• 12 years ago

Because money is a means to an end for people to live. Trading away a life to save a few dollars is missing the point.

conanbatt• 12 years ago

Unless you use that million dollars to save way more people. Because, you can. Easy to save thousands with that kind of money.

PakG1• 12 years ago

If it helps you to understand motivations, you can think of the motivations in terms of the prisoners dilemma. What is the morally correct thing to do is up to each individual involved in the situation though due the idea of fundamental human rights.

smtddr• 12 years ago

You are a perfect example of what I was just talking about less than an hour ago... https://news.ycombinator.com/item?id=7204058

DrStalker• 12 years ago

Start by figuring out the actual cost of the care in a sane health care system, rather than the inflated American price.

MaysonL• 12 years ago

With the cost of bullets so low, why don't we simply shoot a few of the extra ones?

mikeash• 12 years ago

All the other points about morality and such aside, a million dollars isn't even that much. Even from a pure cold-hearted rational perspective, the kid can be expected to contribute two or three times that much in economic activity over his life, so it's actually worth the money too.

dredmorbius5• 12 years ago

the kid can be expected to contribute two or three times that much

Likely rather more than that. Your economic contribution isn't your lifetime earnings, but your lifetime value contribution. That's the productivity-of-labor side of the equation.

Your salary/income is (generally) some small fraction of that.

Look up revenues or profits at a company on a per-employee basis for a proxy of this.

w1ntermute2• 12 years ago

Right, it might make sense to save an infant (although it makes a lot more economic sense for women who cannot have healthy children to adopt instead).

But the bigger question is why we spend so much money to prolong the life of someone who's in their 70s or 80s (and often suffering and in pain) for another couple of years, or even just months.

rdtsc3• 12 years ago

"isn't even that much"

Especially coming from this clown, who, if had just paid that out of his annual salary would still have $10M left to party with.

mjn• 12 years ago

Given finite dollars to spend on healthcare, how to prioritize it is a fair question, though answering it ends up very emotionally and politically loaded. Just in terms of where the money goes, though, money spent on babies is not really a huge problem in the western world: the biggest part of our "heroic care" medical spending is in the last few months of life of elderly and/or terminally ill people.

I don't know of a good way to solve it. I would like to prioritize solid evidence-based decisions as much as possible, but those have a tendency to come across as unfeeling, or worse (one might even gloss such decisions as amounting to "death panels"). I think part of it is that intellectually all of us agree that we cannot spend infinite resources on every possible health problem, but it's difficult to decide that this specific person should not be treated because it's "hopeless" (a gloss for "poor likelihood of success relative to costs"). That would mostly not be babies, but mostly would be a mixture of elderly people (prognosis for nearly anything declines with age) and people with terminal illnesses that are statistically very unlikely to be cured. But even still, difficult to stomach. In part, because it goes against the psychological messages we're sending at the same time, which is that people should never give up hope, etc.

I don't actually know what I personally think about it, given some recent personal experience. One of my friends died a few weeks ago (in his early 30s) of melanoma, which was discovered in Stage 4, and treated unsuccessfully for about 9 months. The prognosis wasn't very good to begin with, given the advanced stage at discovery. Probably, this treatment had little statistical likelihood of success, though redeeming factors included: 1) at a young age, it was at least distinguishable from zero likelihood, and 2) it was part of a clinical trial, so may give some scientific information even if unsuccessful. However in a psychological sense both he and his friends/family seemed to benefit from the treatment, and would have been much less happy with a "not treatable" decision. Enough to be worth the cost, given the low odds of success? Difficult to say, and anyone who tried to say "no" would end up with a tough sell. And yet intellectually I obviously realize that if I were to advocate that we must "pull out the stops" to the maximum extent possible for every sick person, this isn't going to work under any economic system, whether it has a more right- or left-wing flavor.

erichurkman2• 12 years ago

One huge thing that the average citizen can do is to write down (and properly file and certify, as needed) their end of life wishes. Too often it is that people end up in the later stages of their life (young or old) without formal directives as to their wishes. It then falls upon impassioned family members to make decisions: do they ventilate, for how long, and do they tube feed, and under what circumstances do they resuscitate?

It is a discussion everyone should have with their family, _today_, before you or your loved ones are not lucid enough to make the call.

I would love to see the healthcare space, along with the government, advocate for these difficult, yet vitally important, conversations.

Edmond2• 12 years ago

Could be the next Einstein, in which case a million bucks is a pittance :)

In all seriousness, it is a challenging question though. The issue of how to spend healthcare dollars wisely is one that as a country we are currently unwilling to address honestly.

dredmorbius5• 12 years ago

Could be the next Hitler, Stalin, Pol Pot, or Kissenger.

It's all a crapshoot.

jtbigwoo• 12 years ago

It's insurance. We pool together a bunch of people's money (plus money the company puts in on behalf of the people in this case). We say that some of them will cost a bunch and some of them next to nothing. With enough people, the costs average out and it should be manageable. Because AOL is self-insuring, they take the risk that the high cost folks will balance out the low cost folks.

The answer to your question is simple. We pay $1,000,000 not to keep one person alive, but because that person is part of a risk pool which only works if it pays out when something catastrophic happens. The pool would quickly fall apart if it could say, "your parents paid in, but we don't think you're worth that much money."

I'm not an expert, but I believe that Obamacare removed lifetime maximums and the ability to deny coverage based on preexisting conditions. Anderson is probably angry that his costs per individual aren't capped anymore. He happened to pick the least sympathetic way to get that message across.

yummyfajitas2• 12 years ago

It's Armstrong. Preexisting conditions and denying coverage has nothing whatsoever to do with corporate insurance, which already gives you coverage with preexisting conditions. AOL's insurance plans before Obamacare did not have lifetime caps (source: I worked at Patch).

Most likely the added costs he is complaining about are caused by various low cost, high probability events that Obamacare mandates coverage of. When I worked there I had a cheap high deductible plan, which is the sort of thing Obamacare makes illegal.

chris_wot3• 12 years ago

Yep. Sounds unfeeling. What if you were that "one person in a billion"? Or your own child?

icebraining2• 12 years ago

Do you give all your disposable income to poor kids? Why not - they could be your child!

If parent sounds unfeeling, frankly your post sounds hypocritical. Everyone implicitly makes a decision on how much to give away vis-à-vis spending on less noble things. Parent's not a worse person for acknowledging it.

koenigdavidmj• 12 years ago

The only people who suggest that are the people who are in the "allowed to survive" bucket.

dominotw• 12 years ago

To talk about it.

staunch• 12 years ago

I think it's cool Tim Armstrong asked this question on HN, even if did use an alias.

rdtsc3• 12 years ago

I know it will sound unfeeling

Yap, it does

why, in a world with billions of people, we would spend a million dollars to keep just one human alive?

Because part of what makes us, "us" is keeping one human alive. That one human, one baby is someone's baby. If it was your baby, wife, sister, friend, how quickly you'd tell the insurance company and hospital, nah, don't pay for it, let them die. You wouldn't have to pay. That is why you joined AOL maybe and have "great" insurance. For not having to go bankrupt or make such decisions in cases like this.

I can see how someone in a poor country might be offended, but I am offended when a CEO who makes millions of dollars per year says that. Saving those 2 babies was just 15% of his annual salary. You can turn that question around and then ask: "I know it will sound unfeeling but I have to wonder why, in a world with billions of people, many making under $100/month, many sick and starving, we would, as a society even let one single CEO of some washed up Internet company that used to mail stupid cup coasters in CD form, make tens of millions of dollars / year?".

victorhooi• 12 years ago

I think it's more a problem of prioritising finite resources. Pointing to his salary is just an ad hominem attack, and does nothing to progress the discussion. Basically, say you have a thousand employees and $5 million. If you spend $2 million on two of them, then it only leaves $3 million to spend on benefits for the remaining 998 employees. Like it or not, it's a zero sum game. It's a tricky ethical dilemma.

fennecfoxen3• 12 years ago

Q: Would you consider working your rear end off for years on end to pay medical expenses necessary to save the life of some arbitrary human being halfway around the globe you've never met?

Q2: Would you consider working your rear end off for years on end to pay medical expenses necessary to save the life of your own daughter?

The reason AOL pays these expenses is the same reason it pays its own employees and the same reason those employees spend money on things like "television" and "dining out" and "silicon valley rent" instead of spending it on improving the fate of third world nations. People spend money on themselves and on people they care about!! There is more to life than the welfare state!! And it's a good thing, too, because taxation of an individual's economic output in favor of redistribution damages his incentives to work, and eventually you see the Laffer curve in action and the welfare state isn't doing as good a job of providing for peoples' welfare. (See also: abject failure of Communism, and associated famines).

jrockway2• 12 years ago

taxation of an individual's economic output in favor of redistribution damages his incentives to work

The part I keep increases my incentive to work.

"You know, I really want that promotion, but since the government is going to take some percentage of the associated raise, fuck it, I quit," said no one ever.

Scorponok• 12 years ago

It's great that he apologized, but I think it shows how crappy things are that such a decision was made in the first place. An outstanding Q4, and yet they were planning to take benefits away from employees? That doesn't seem very "employee-first" to me.

lmg643• 12 years ago

It also says a lot about armstrong that he saw fit to comment on this in the way he did. by the time you get to the executive level, you should know when to check yourself, or at least to run comments by a good PR team.

jnord• 12 years ago

This seems to be the modus operandi of both government and corporations nowadays. First a short-sighted idea is implemented then if an uproar ensues, apologize and reverse. Thus it is important to ensure a shit-storm of public opinions in response to crappy policies or bit by bit ones personal (and financial) liberties are eroded.

protomyth• 12 years ago

He tried to pull a change that suggests that some more staff reductions are in the offing and he tried to use and excuse that doesn't even fly if you hate the ACA. I am constantly amazed that he has a job, but I guess the fiscals will forgive a lot.

yummyfajitas2• 12 years ago

According to Armstrong, Obamacare forced them to increase benefits for employees in healthcare. So reducing retirement benefits commensurately seems like a reasonable way to make sure comp stays the same.

This is exactly what you should expect when you mandate employers provide a benefit to employees - they will cut something else to make up the difference. Employees who liked the other thing more are screwed.

A single good quarter is NOT a reason to increase employee comp. Maybe a bonus (note: AOL has bonuses which are based mainly on profit sharing, not individual performance), but not a permanent comp increase.

auctiontheory• 12 years ago

I'm baffled by Tim Armstrong's rise to the top. I think he got there by virtue of having founded Patch, which never did anything before getting (nearly) shut down .... he seems to constantly piss everyone off, while accomplishing nothing, and yet ... CEO of a major brand?! (Other unpleasant CEOs - I can point to what they've accomplished.)

What am I missing? Does he have some other claim to fame and fortune that is not documented? Or is AOL making a technology or market share comeback that I'm unaware of?

aheilbut• 12 years ago

It wasn't Patch. He built up advertising sales at Google starting in 2000.

dredmorbius5• 12 years ago

He did found Patch in 2007, though I don't suspect that was instrumental in his pick as AOL CEO.

dredmorbius5• 12 years ago

Armstrong joined AOL as CEO in 2009 from Google where he was President of Google's Americas operation. AOL were replacing their former CEO Randy Falco following a number of spectacular business blunders.

He's not proven particularly popular. On the other hand, AOL is alive and profitable, which wasn't a sure thing five years ago.

dredmorbius5• 12 years ago

Makes me wonder what the missing word or phrase between "employee-first" and "culture" is. "To be cut"? "To be scapegoated"?

nradov• 12 years ago

While his comments are rather insensitive they do serve to illustrate the madness of the current employer paid health insurance system in the USA. We need to get employers out of the system. Require everyone to purchase individual policies on the private market and provide government subsidies to those who can't afford it.

brudgers• 12 years ago

Karrie is married to my cousin Kyle. In 2005 their first child, Kathleen was born. Kathleen's birth was covered by insurance via Karrie's employer. Her employer was AOL.

Kathleen was named after Kyle's mother [my aunt]. She was killed in an automobile accident. At her funeral, I was ten. Kyle was in second grade.

Kathleen was what Mr. Armstrong would call a distressed baby. Medical costs associated with her treatment exceeded a million dollars. Insurance paid. She died from cancer anyway.

Logically I admit that there could be worse events to befall a human than the death of a child, but I am certain Mr Armstrong's abstraction doesn't capture the tears and pain and sadness of the events it references.

Imagine being the parent of one of the infants who Mr. Armstrong held responsible.

Distressed by Baby Controversy, AOL’s Armstrong Reverses 401(K) Policy

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