Author: Rupal Parekh

For 40 years, Sanford Moore has been an advocate for racial parity on Madison Avenue, particularly for African-Americans. He has been a thorn in the side of the agency structure, a chief cheerleader of government attempts to intervene and a critic of other African-Americans whose methods he doesn’t agree with. This interview was conducted by Advertising Age, a sister publication to Workforce Management.

     He started out at BBDO in 1969, and left the agency two years later to establish his own consulting firm that specialized in ethnic marketing. In the late 1970s, he had a stint at Lockhart & Pettus, a black advertising agency.

As an independent consultant in the three decades since, Moore’s interest in civil rights has led him to work with Cesar Chavez and the United Farm Workers, as well as Walter Fauntroy and Nelson Mandela’s African National Congress.

His lobbying for African-Americans on Madison Avenue laid the groundwork for the Madison Avenue Project, a class-action lawsuit led by Cyrus Mehri and the NAACP.

     Ad Age: How did the Madison Avenue Project come about?

    Moore: I was introduced to Cyrus Mehri, and I presented the case and supporting documentation. He saw the injustice of the situation and agreed to undertake the effort.
One of the things that Cyrus does in his settlements is that he puts in place certain ongoing mechanisms that monitor where there’s accountability from the top down to change the corporate culture from discrimination and exclusion. I’m not going to be here forever, and unfortunately, if I hadn’t gotten this done, [Madison Avenue] would have gotten away scot-free.

     Ad Age: What motivates you to take on the industry?

     Moore: I’ve never liked bullies, and I don’t like mendacity and obfuscation. Madison Avenue is like a plantation where the slave owners, the heads of the holding companies, benefit from the labor and the profits generated by the slaves and sharecroppers. I’m not finished with them yet! Before it’s over, Madison Avenue will pay the price for its historical discrimination.

Were it not for black consumer spending, many of the icons of the American marketplace would not enjoy the advantages and profits that they do. Black consumers are the profit margin for many of Madison Avenue’s clients, yet Madison Avenue refuses to acknowledge and give the correct value and importance that these consumers play to the overall success of their clients.

Ad Age: You’ve called chief diversity officers “pimps.” Why?

Moore: Let’s call them diversity parasites. They do nothing to help. If they do any good, where are the black executives in the organizations that they’re hired to? Besides themselves, who else is there?

The diversity officers, I mean they’re window dressing. They don’t have power, they can’t hire. But it’s not just diversity officers. It’s lawyers and diversity consultants and people that feed off of the exclusion to black people. It’s like blood diamonds. These people profit off of the blood that black people have spent trying to break into and achieve success on Madison Avenue. They do nothing to help. They just get paid to run interference, to create meaningless dialogue.

Ad Age: What are you doing these days?

Moore: I collaborate with the Madison Avenue Project in developing the case. I also bring these issues to the public attention via the radio show that I do. I continue to advocate on behalf of African-Americans and their media with bodies like the New York City Council and also work to bringing this case before other governmental and regulatory bodies.

Ad Age: What keeps you going?

Moore: I do these things by myself. Nobody pays me. I don’t ask for money. I’m not looking for a job. I’m only interested in the agencies and their clients doing the right thing. I’m interested in black institutions and black people getting parity for the economic contributions they make in terms of their consumer spending. I want to see them get their fair share.

Plagued by high health care costs, more employers are embracing the concept of replacing all existing medical insurance plans and implementing a full-replacement consumer-driven health care program. But, they are proceeding with caution.

    Among the top concerns for those pondering the move to a full-replacement program is lack of choice for employees and protection under the plans for lower-paid employees, experts say.

    “Three or four years ago, we saw very few companies give serious consideration to full replacement,” says Patrick Travis, senior manager in Chicago for Deloitte Consulting’s human capital practice. “In this last cycle, we are starting to see many, many more employers giving it a serious look.”

    One reason employers are starting to come around is simply that consumerism is no longer a foreign concept, Travis says. Most organizations now “at least have a toe in the water” when it comes to consumerism, and offer some type of CDHP alongside traditional plans, he says.

    Additionally, continuing cost pressures are forcing companies to evaluate more aggressive strategies to contain costs, Travis says.

    Overall, though, the number of companies taking the plunge remains small; about 10 percent of companies now offer CDHPs as the sole coverage option, says Helen Darling, president of the Washington-based National Business Group on Health.

    “Relatively few employers are offering consumer-directed health plans only,” Darling says. “But the ones who do full replacement are the ones who get significant savings.”

    When imposing a high-deductible health plan, both the employer and the employee tend to save money since utilization of health care goes down in frequency, Darling says.

    “If all employees are in [a CDHP] plan, the savings would be higher than if only 10 percent to 20 percent of employees were in the less costly plan,” she says.

    Total-replacement programs also tend to prevent adverse selection, which can occur when only the healthiest employees enroll in a CDHP while high-dollar claimants remain in traditional plan options, experts note.

    “You don’t have to worry about the person who does five triathlons a year and is generally healthy selecting a CDH plan while your smokers and cardiac patients are selecting traditional plans,” says Mike Sturm, principal and consulting actuary at Milliman Inc. in Brookfield, Wisconsin. “When you switch everyone over, you eliminate that selection bias.”

    Providence, Rhode Island-based Textron Inc.—which in 2002 was one of the very first employers to introduce a full replacement plan—has seen an improvement in the overall health of its 28,000 employees in part because preventive care visits have spiked under its total-replacement plan.

    Over the past three years, lipid tests for cholesterol increased 27 percent, tests for coronary artery disease grew 24 percent, and colonoscopies for those 50 and older are up 66 percent, George Metzger, Textron’s vice president of human resources and benefits, said in an e-mail. In that same period, preventive visits have increased 20 percent among male employees, who traditionally have been less likely to seek preventive care, Metzger said.

    According to Chris Calvert, vice president and senior health consultant at the Sibson Consulting division of New York-based Segal Co., companies going to full replacement “really have bought into the theory of consumer-driven health care that employees should be more engaged in their health care.”

    “Companies that are doing full replacements are saying that ‘we are in this together, company and employee.’ … They’re getting everyone involved, which is one of the keys to success,'” Calvert says.

    A common concern among employers is that the burden of a full-replacement program may fall disproportionately on lower-paid employees, consultants say.

    “It’s a legitimate concern, particularly in some industries where there is a very large disparity between individuals on a pay scale,” Deloitte’s Travis says.

    Employers can, however, solve the problem by altering the plan’s design. “There is nothing that says that you can’t continue to do payroll contributions depending on level of pay. We often see that employers will do pay-banded contributions,” to a health savings account, for example, Travis says.

Linking premium to salary
   Another option, Milliman’s Sturm says, is to charge employees premiums for their coverage based on their salary. “The less you make, the less you pay for health insurance,” he says.

    Fairfield, Ohio-based Innomark Communications, which currently offers a mix of plans that include preferred provider organization offerings as well as CDHP options and is considering a full-replacement consumer-driven health program, is pondering setting up a special account to help offset expenses for lower-wage employees or for catastrophic health events.

    Under such a program, “the money stays with the company, so if [employees] don’t use it or were to leave, the company can keep it,” says David Vonderheide, Innomark’s director of human resources.

    Many employers also worry that implementing a total-replacement CDHP would eliminate choice for employees and therefore not be well-accepted.

    “Most large employers are committed to the concept of choice for their employees, not saying one size fits all,” says Tom Billet, senior benefits consultant at Watson Wyatt Worldwide in Stamford, Connecticut.

    But according to Travis, “There is a misconception that elimination of non-CDH plans and going full replacement means elimination of choice.” Choice could still be made available by changing plan design within the consumer-driven delivery model, he says.

    A multitude of choices can also confuse employees, says Chiaw Eei NgGibson, head of benefits and HR economics for Hartford, Connecticut-based Aetna Inc., which last year went to a full-replacement plan for its 31,500 employees.

    “In the years that we offered the PPOs, HMOs and CDHPs side by side, we got feedback from employees that those were too many choices,” NgGibson says.

    Currently, Aetna offers two types of CDHPs, one linked to a health savings account and one to a health reimbursement arrangement, and typically has 80 percent of employees covered by those plans.

Start early
   When it comes to moving to a full-replacement CDHP, there is no such thing as too much communication, experts say.

    “The singular most important thing [employers] can do is communicate with the employees,” and do so “months before they are going to implement” a full-replacement program, says Bill Tate, corporate vice president of sales and market operations for Humana Inc.

    Tate suggested appointing a team to develop an education campaign that involves insurers, consultants and the company’s senior management.

    In order to provide ample warning and support to employees as they make the transition, companies should ideally have a full year, Darling says.

    “If you were planning to do it in January 2008, it’s probably too late,” Darling says. “But if you want to make that change for 2009,” it can be done.