Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, September 18, 1994 TAG: 9409170005
SECTION: BUSINESS PAGE: F-1 EDITION: METRO
SOURCE: By LON WAGNER LANDMARK NEWS SERVICE
DATELINE: RICHMOND LENGTH: Long
One was for sport; the other, business.
The first occurred about six years ago during a yacht race from Miami to Montego Bay. Davis and the boat's crew skirted within 500 yards of the Cuban beach.
``We had a gunboat come out and track us,'' Davis recalled. ``It really wasn't a smart thing to do, but when you're racing ... ''
His second brush with danger came as a result of business competition. Davis, as the CEO of Trigon Blue Cross/Blue Shield, presided over practices that now have the state attorney general's office and the State Corporation Commission's insurance bureau watching Blue Cross as diligently as that Cuban gunboat.
Blue Cross worked out discounts with hospitals around the state; but instead of informing policyholders of the savings, Blue Cross based its policyholders' 20-percent co-payments on the nondiscounted, or gross charge, of the hospital procedures.
Davis now knows the company slipped up.
``For me to sit here and tell a policyholder, `Look, read the contract, the policy says 20 percent of charges,''' Davis said, ``and the guy's going, `Hey, come on, if I sit here and read it, I can understand that, but the fact of the matter is, when I bought this I'm assuming I'm going to pay 20 percent, and you're going to pay 80 percent.'
``You know, I can't argue with that.''
Despite the state's unfinished investigation, Trigon is pushing forward to sell stock and become a company traded on Wall Street. The company says it is in the prefiling stages with the Securities and Exchange Commission.
Should the SEC approve the plan, Norwood Howe Davis Jr. will likely be at the helm of Virginia's next Fortune 500 company
Davis is the quintessential Virginian. He got his bachelor's degree from Hampden-Sydney College, got his law degree from the University of Virginia and completed the executive program at UVa's Darden Graduate School of Business Administration.
Davis came to Blue Cross on April Fools' Day in 1968 as an in-house counsel, when he was just 28 years old. Twenty-six years ago, the health insurance business was just getting interesting. The federal government instituted Medicare in 1966 and Medicaid the year Davis joined Blue Cross.
Davis wasn't thinking at the time about moving up the ladder to the CEO's job - at least not right away.
``My view was, I'm going to be the counsel to this company, and we're going to be a growing company,'' Davis said, then smiled. ``That's not to say a few years later the thought didn't cross my mind.''
Davis has been in the captain's chair of Blue Cross since 1981. He looks, dresses and talks like the CEO of a large company - from the simple ``ND'' embroidered on the breast of his white shirt to his gold-rimmed reading glasses.
Davis is married to the former Marguerite Cash Clay, and they have a daughter, Clay McAdam. Davis also has two sons: Norwood H. III and John Parker, both graduates of Dartmouth College.
Davis' recreational passion is sailing, though he has cut back on competitive racing during the past few years and now sails more for enjoyment.
His sporting interest in sailing led to the appointment of one Blue Cross board member, Gary Jobson, who was on Ted Turner's crew that successfully defended the America's Cup in 1977.
Davis defends Jobson's appointment. In addition to yachting accomplishments, Jobson owns a marketing and communication company and is either a board member or adviser to ESPN, Hampton University, Heineken, Citizen Watch Co. of America and numerous other companies.
In conversation, Davis can be charming one minute and forceful the next as he both touts his leadership of the Richmond-based Blues and confesses his shortcomings. He transitions easily from sternly answering questions to being self-deprecating and down-to-earth. Mentioning one of Trigon's numerous subsidiaries, Health Management Corp., Davis jokes that the name is coincidental to the new industry buzzword, managed health care.
``I wish we could tell you we thought up the `managed care' back in those days, but it was more the management of programs and costs,'' he said. ``Maybe we could have a selective memory.''
Defending the company's billing practice, Davis appears forthcoming, to the extent that his answer may seem to show a lack of concern, but he says it matter-of-factly, from a competitive business standpoint:
``If [policyholders] can find a better deal, they can go somewhere else.''
One observer of the state's insurance and health care industries, a person who is no fan of Blue Cross, says Davis has generally steered the company down the right path.
``Smart as hell,'' he said when asked what kind of operator Davis is. ``I think by and large, he's done a good job with them. They clearly have made big mistakes here. This co-payment issue is just a huge, huge mistake.''
Lou Rossiter, director of health care policy at the Medical College of Virginia, said Davis and Trigon President Phyllis Cothran have tried to create a cohesive ``corporate culture'' within the company.
To a large extent, he said, they have succeeded. But Rossiter thinks it may require a drastic change - such as Davis and Cothran's preferred path of turning Trigon into a public company - for the transition to be completed.
Within the community of Blues, Blue Cross of Virginia is viewed as solid and strong, but not the most risk-taking Blue in the country.
``Norwood would like to be viewed as a visionary,'' Rossiter said. ``Norwood has shown shrewd business sense in the past and a good sense of timing, while not a first-mover. This is Virginia, after all.''
by CNB