Author: Site Staff

The nation’s health insurance companies, representing 200 million Americans, announced a plan December 13 to create a standardized digital health record that can be owned by members even if they switch insurance carriers.

The announcement comes amid a series of high-profile developments in the effort to reduce health care costs paid by employers and to create products focused on the needs of individual health care consumers.

Washington, D.C., on the subject of digital health records.

But health care experts caution that these initial milestones and spikes in public awareness are baby steps. The industry is far from being able to deliver the improved quality of care and cost savings that is promised with personal health records.

“This might be a first step to get us there, but as a stand-alone activity it has little value,” says Gerard Anderson, director of the Center for Hospital Finance and Management at the Johns Hopkins Bloomberg School of Public Health.

That first step, announced jointly by America’s Health Insurance Plans and the Blue Cross Blue Shield Associations, would create a standard personal health record that could be used by all health plans. At a minimum, the group says, the standards would include: patient information, doctors visits, medications, lab results, providers, facilities, subscriber information, benefit information, family history, physiological information, immunizations, health risk factors, advance directives, alerts (including allergies) and plan of care.

“We felt that because so much of the information for people to have a health record is based on claims filed, we were able to make this available in the short term,” AHIP spokeswoman Susan Pisano says. The plan was also supported by the National Health Council, a nonprofit whose members include health associations such as the American Cancer Society and the Lance Armstrong Foundation.

Pisano says that because of their size, health insurance companies are better equipped than employers to lead the development of personal health records.

“We also realize that more than 200 million people get their coverage through BCBS or AHIP,” Pisano says. “That gives us substantial reach; that gives us two-thirds of America.”

But unless that information can include the kinds of diagnostic detail doctors use to treat patients, the record will not improve health care quality or avoid unnecessary or redundant procedures, Anderson says.

Still, it makes sense to have health insurance companies and employers pay for the effort to develop personal health records, as they will benefit from the cost savings and improved health of insured employees, says Keith Strier, a senior manager in the life sciences and health care practice at Deloitte. And no one else is likely to foot the bill. Anderson says $156 billion in capital investments will be needed over a five-year period to create a national health IT network, of which personal health records would be a component.

Strier sees the decision to create an interoperable health record as a sign of positive cooperation among health insurance companies. The companies, he says, are in a better position than employers to use their product design capabilities to create an interoperable personal health record and bring it to market.

But whether the product comes from employers or health insurers, the goal is the same: to improve the health care of individuals and reduce costs for the employers footing the bill. Health IT experts say the personal health record is at the center of that kind of transformation.

“The proactivity of large employers and major payers signifies the kind of momentum we need in order to drive better outcomes in health care,” Strier says. “And that is not going to happen until [consumers] get more involved, and the personal health record is a main way to make that happen.”

—Jeremy Smerd

A unit of Prudential Financial Inc. has agreed to pay $19 million and stop paying contingent commissions on certain lines to settle allegations of fraud and anti-competitive practices leveled by New York Attorney General Eliot Spitzer.

Under the settlement announced Tuesday, December 12, group life insurer Prudential Insurance Co. of America will cease paying contingent commissions to brokers on group insurance products, including disability, life and long-term care.

Prudential also agreed to provide full disclosure of broker compensation to employers and said it would pay restitution of $16.5 million to policyholders and pay civil penalties totaling $2.5 million.

The settlement ends regulatory probes into Prudential’s broker compensation practices launched by Spitzer in 2004.

The investigations found that between 1999 and 2005, the company paid almost $60 million in overrides to brokers on nearly $18 billion in insurance premiums, Spitzer’s office said.

Additionally, Prudential at times paid some brokers specific commissions—so-called “single case overrides”—to close a deal or promote future business.

“On certain occasions Prudential built the cost of these single case overrides into the premiums,” Spitzer’s office said in a statement.

Among the companies Prudential maintained override agreements with are: Aon Corp.; Marsh & McLennan Cos.; Universal Life Resources and Pacific Resources; and USI Holdings Corp., Spitzer said.

In a statement, Newark, New Jersey-based Prudential said, “This settlement resolves the investigation and is in the best interest of Prudential and its policyholders.”

—Rupal Parekh, Business Insurance

The employment outlook for the first quarter of 2007 reveals stability with expectations of a slight softening in the U.S. job market, while there is optimism for continued growth internationally, according to a report from Manpower.

Some 60 percent of the 14,000 domestic companies surveyed for the study, which was released Tuesday, December 12, say they don’t anticipate a change in the pace of hiring. However, there are subtle signs of a decline in confidence that have crept in during the last two quarters, the report finds.

Four of the 10 industry sectors that were surveyed for the report anticipate weaker hiring. Respondents in the sector of finance/insurance/real estate report the weakest hiring expectations for the first three months of next year— a shift from a strong performance throughout most of 2006.

On average, 23 percent of the respondents expect to add more jobs in the first quarter while 11 percent predict a reduction in staffing levels. Six percent of survey participants did not respond to hiring plans for next year.

“This is by no means a dramatic shift in employer sentiment, but it does indicate that companies are giving more thought to posting help wanted notices,” says Jonas Prising, president of Manpower North America.

He hesitates to categorize the slight softness as a trend, attributing the dip in employment outlook for certain industries as a symptom of coming off a high. “It is just the natural process of leveling off,” Prising says.

Respondents in the education, public administration and the mining industry anticipate a slight bump in hiring. Survey participants in nondurable goods manufacturing, wholesale/retail and services sectors foresee little change in their hiring.

The employment outlook outside of the United States is even more upbeat. Approximately 90 percent of the businesses in countries and territories surveyed anticipate an increase in their workforce during the first quarter of 2007. Some 50,000 public and private employers across 27 countries were interviewed for the survey.

The most optimistic hiring expectations were reported in Peru, Singapore, India, Argentina, South Africa, Costa Rica, Japan, Australia and New Zealand. Though the hiring prospects for Asia Pacific markets are slightly lower than when the survey was last taken three months ago, the general outlook is positive in the region.

Seven of eight countries that were queried in Asia Pacific expect an increase in hiring pace for the first quarter of 2007. Meteoric economic growth in countries like India, China and Thailand is making the outlook rosy.

—Gina Ruiz

Frustration with the nation’s health care system has caused a majority of Americans to support a more assertive government role in lowering costs, according to a poll released Friday, December 8, by the Kaiser Family Foundation and the Harvard School of Public Health.

Americans want Congress and 2008 presidential candidates to make health care a priority, the poll states. The survey of 1,867 adults was conducted November 9-19.

Among the most striking findings are that 85 percent want the federal government to do more to expand insurance coverage and 64 percent believe that the president and Congress can “do a lot” to address costs.

“There is more interest in an activist government in slowing health care costs than there has been in a decade,” says Robert Blendon, professor of health policy at Harvard. People “are looking for a government counterbalance to what they see as strong private-sector forces for increasing prices.”

Iraq and the economy. Among independents, health care tied for second (16 percent), behind Iraq (41 percent), as the issue they want the president and Congress to address next year.

It was third (18 percent) for Democrats, with Iraq coming in at 57 percent and the economy at 20 percent. For Republicans, it was fifth (9 percent), ranking behind Iraq (44 percent), immigration, terrorism and the economy.

During the next year, Democrats want Congress and the president to work on expanding coverage for the uninsured (45 percent), while Republicans (38 percent) and independents (30 percent) focus on reducing costs.

Strong majorities favor allowing the government to negotiate with drug companies to lower prices for Medicare prescriptions and back the importation of prescription drugs from Canada.

Poll respondents also strongly support (48 percent) extending insurance coverage to children first if it cannot be provided to everyone who is uninsured. But 57 percent want to see health care proposals from 2008 presidential candidates that focus on expanding coverage, even if it requires a substantial increase in federal spending.

The results don’t necessarily mean Americans favor government-run health care, according to Drew Altman, president and CEO of the Kaiser Family Foundation.

In fact, Democrats (39 percent), Republicans (29 percent) and independents (37 percent) turn to employers as the best means for covering more uninsured Americans. They support requiring companies to offer insurance to all full-time workers.

Employers already are the source of coverage for the majority of those who are insured—and people appreciate their efforts.

“There’s quite a bit of empathy toward employers for covering health care,” says Mollyann Brodie, Kaiser vice president and director of public opinion and media research. “They’re still very thankful that employers are helping them.”

Employees see companies as an equalizer in the health care market. “People like the idea of someone bigger running interference for them,” Altman says.

For a while, at least, companies may be the only source of help. Congress may be cautious on health care policy over the next several months, given that many of the newly elected Democrats came to Washington after campaigns that revolved around Iraq and congressional corruption.

Members of Congress “are going to have to try some proposals out and see how they play,” Blendon says.

—Mark Schoeff Jr.

Most American employees are happy with their work and give high marks to their bosses, according to a new survey from Kelly Services that goes against the conventional thinking.

U.S., participated in the Kelly Global Workforce Index report.

U.S. workers are among the happiest in the world, according to the survey, trailing Denmark, Mexico and Sweden. The prospects, however, are not as good for countries like Hungary, Russia and Turkey, where less than 50 percent of respondents say they are happy with their jobs.

Not only are U.S. workers happy with their jobs, but they also give high marks to their bosses. Managers were evaluated on their ability to communicate, delegate responsibilities, generate a team spirit and exert leadership. On a scale of 1 to 10, employees in the U.S. gave an average rating of 7.3 to their bosses. That mark is only second to the 7.6 that Mexican workers give to their supervisors.

But there is still room for improvement. The levels of happiness among workers varied according to industry. Only 37 percent of respondents who work in retail, for example, say they are happy with their job. There are other areas of concern as well. Almost 30 percent of workers say they are rarely or never rewarded for a job well done.

“The challenge is to continually provide interesting and meaningful work as well as opportunities for employees to learn and more fully develop their own skills,” says George Corona, senior vice president at Kelly.

The results of the Kelly survey provide a refreshing change from other studies, which depict a much more depressed, unhappy and unengaged workforce. Sibson, a human resources consulting firm, released a study last month indicating that workers are less satisfied and less engaged. According to the report, career satisfaction dropped from 61 percent in 2003 to 41 percent this year.

The Kelly and Sibson surveys don’t use the same yardstick to measure results, but the divergence in their findings could make it confusing for employers to trying to understand the psychology of their workforce. Regardless of whether a survey portrays a workforce that is happy or one that is not, what’s important is for employers to strive toward enhancing practices that are known to make a positive difference in the workplace, Corona says.

“Time and again, workers tell us that they want a workplace with good morale, stimulating work, a degree of autonomy and meaningful feedback from their bosses,” he says.

–Gina Ruiz   

Workforce management software company Vurv Technology reported Thursday, December 7, that its revenue increased 63 percent in the third quarter. The company attributed the gain to growing demand among large employers for its management software.

The privately held company, which said it has posted revenue gains for 36 straight quarters but would not disclose its numbers, won the business of several large accounts during the most recent quarter, including Amtrak and high-tech firms VeriFone and DoubleClick. Vurv is among the fastest-growing technology companies, ranking 197 on Inc.United States.

The quarterly report came less than a month after workforce management software company Taleo announced a number of new customers in its third-quarter results, which it made public during its quarterly filings November 13. The publicly traded company’s newest clients include the Gallup Organization and MySQL. That new business helped Taleo increase its quarterly revenue to $24.9 million, up 25 percent compared with a year earlier. The increased revenue helped the company narrow its third-quarter net loss to $800,000 in 2006 from $1.6 million in 2005.

—Jeremy Smerd

The much-ballyhooed high-deductible health plans haven’t caught on yet in the American workforce in part because many benefits of those plans have yet to materialize, a new report asserts.

Despite the initial excitement when the plans were introduced in 2004, enrollment has stayed flat, according to a report released Thursday, December 7, by the Employee Benefits Research Institute and the Commonwealth Fund, both of which conduct health care research.

In its second annual look at so-called consumer-driven health plans, EBRI surveyed more than 3,000 adults who were privately insured and found that 1 percent were enrolled in high-deductible health plans with health savings accounts. Using their data, the institute concluded that about 1.3 million people were enrolled in high-deductible plans with health savings accounts, the same number as in 2005.

High-deductible health plans feature deductibles of about $1,500 for individuals paired with a tax-free health savings account, and were introduced fully in 2004. The plans have received a fair amount of media attention and have been embraced by a number of large employers, including Wendy’s, Textron and American Express.

The percentage of employees with a deductible of more than $1,000 but whose employer did not offer a health savings account actually dropped to 7 percent from 9 percent in 2005.

But advocates of consumer driven health care say the report’s numbers are flawed because the sampling is small. Greg Scandlen, a consumer advocate, points to numbers published by the industry newsletter Consumer Driven Market Report, which counted the number of high-deductible enrollees—as reported by health plans—to be 13.4 million, about twice as many as 2005.

Barbara Gniewek, a consultant with Deloitte’s human capital practice, says the numbers do not represent the growth of high-deductible plans among large employers. In an upcoming survey, Deloitte says 30 percent of employers offer a high-deductible plan with a health savings account. By 2008, that number will be 46 percent. Gniewek says employers will begin to consolidate their plan offerings, reducing the number of HMO plans and resulting in more employees migrating to consumer directed plans.

“I think that consumerism is a critical component of bringing health care costs down,” Gniewek says.

High-deductible plans have been championed as a way to make health care consumers more sensitive to price. Employers buckling under the burden of high health care costs have looked at these plans as a way to change the purchasing behavior of employees.

In response to critics who have said high deductibles would keep sick people from getting necessary treatment, the legislation that created health savings accounts allowed health plans to cover preventive treatment. The EBRI study, however, suggests that many of the criticisms may be valid.

Half of the individuals enrolled in high-deductible health plans did not have their preventive care covered. And those enrolled in the high-deductible plans were more likely to delay or avoid necessary care than were those in low-deductible plans, the study notes.

Though the plans make individuals sensitive to price, those surveyed said their health plans did not provide adequate information on the cost and quality of doctors and hospitals.

 

Health insurance companies were quick to respond to the report. How a plan is designed will determine its use by enrollees, says Karen Atwood, a senior vice president for Blue Cross and Blue Shield of Illinois.

Scandlen says a third of the care people receive is wasteful, and therefore sees a drop in treatment as a sign that consumers are making decisions not to seek help they don’t wish to pay for. He agreed that information on cost and quality lagged.

“Patient support information services is a real problem,” Scandlen says. “We’re hearing that a lot in the market.

“That is where a lot of innovation and energy is happening right now. Information technology systems are growing as fast as the Internet did 10 years ago.”

Cost was another issue, especially the high deductible. Federal law determines that a high deductible must be at least $1,000 for an individual or $2,000 for a family to qualify for a health savings account. The survey reports that many people have much higher deductibles. Less than half of individuals had a deductible under $2,000; 42 percent had deductibles of between $2,000 and $5,000. For family plans, 29 percent had a deductible of $5,000 or more.

James Bentley, a senior vice president with the American Hospital Association, says high deductibles are causing people to go into debt, either because they don’t have a health savings account or they don’t have enough money in the account at the moment when they need medical services.

“Many of the people lacking a savings account to accompany it people are not prepared to pay the deductible to whomever they owe it in a timely way, leading to bad debt,” he says.

As a result of the high costs and other issues presented in the report, the survey’s authors write: “As in 2005, individuals in CDHPs and HDHPs continue to be less satisfied than individuals with comprehensive health insurance with various aspects of their health plan, are less satisfied overall with their health plan, and are less likely to recommend the plan to a friend or work colleague.”

—Jeremy Smerd

A new report about how typical Americans think about the economy has lessons for liberals, conservatives and corporations.

The report, released Tuesday, December 5, by the Economic Policy Institute research group, says everyday Americans are at once more hopeful yet more concerned about the economy than many pundits portray them. It also finds evidence that corporations or corporate executives often are blamed for difficult economic circumstances.

During a conference call Tuesday, Stan Greenberg, a pollster and contributor to the study, suggested employers view the research as motivation to get on employees’ good side.

“Being part of the solution, rather than a part of the problem, is the message,” Greenberg said.

Greenberg did not elaborate on how companies can do that. But there’s evidence firms are increasingly eager to win over employees. The number of companies that apply each year for Fortune magazine’s list of the 100 best American employers has climbed from about 300 in 2001 to more than 450 this year.

During the past several years, conflicting information has emerged about the state of the U.S. economy and its impact on American workers.

The economy has been growing, jobs have been created, and the official unemployment rate has fallen. But gains have been skewed to those at the top, while typical workers have treaded water financially. A recent U.S. Census Bureau study found that real median household income in the United States rose by 1.1 percent from 2004 to 2005, reaching $46,326. But real median earnings of both men and women who worked full time and year round declined.

Meanwhile, workers face the possibility of their jobs being offshored, and are witnessing the erosion of health and retirement benefits.

Typical Americans tend not to see themselves as victims, but they aren’t happy with the direction the economy is taking, according to the new report, titled “Talking Past Each Other: What Everyday Americans Really Think (and Elites Don’t Get) About the Economy.”

In one poll cited by the report, respondents by a 2-to-1 margin chose to describe the economy overall as characterized by increasing uncertainty and inequality rather than as one in which “the American dream is very much alive.” But of the group that said increasing uncertainty distinguished the economy, 63 percent still thought they would achieve the American dream.

“Americans don’t just think one single thing about the economy,” EPI president Lawrence Mishel said during the conference call. “They think several things.”

EPI is considered a liberal-leaning think tank. Its new report adds to a national debate about increasing economic insecurity in the United States. There has been concern that business leaders have not played a forceful role in discussions about how to reshape the social contract around work in an era of greater globalization.

On Tuesday, another report indicated international trade could have a destabilizing effect on many American employers and workers. From 1997 to 2005, more than 100 major U.S.-based manufacturing industries lost significant chunks of their home U.S. market to imports, according to the study.

The report published by the U.S. Business and Industry Council, a group that lobbies on behalf of family-owned and closely held American firms. The council favors a new approach to international trade agreements, including a temporary across-the-board tariff on imports, with the exception of a few essential products such as oil.

Alan Tonelson, a co-author of the council’s report, says insensitivity to Americans’ job losses, stagnating wages and declining benefits can be found even among liberals.

“There is a very substantial portion of the Democratic Party and of American liberals who are just as clueless as to the real plight of the American working class,” Tonelson says.

—Ed Frauenheim

A new company focused on workforce productivity emerged late last month, one rooted in a veteran HR research organization.

On November 28, the Institute for Corporate Productivity announced its arrival, saying it had agreed to buy the assets of the Human Resource Institute. HRI is a not-for-profit organization dating to 1965, with offices in St. Petersburg, Florida, and more than 100 corporate clients.

The new for-profit institute was founded by HR industry veterans Kevin Oakes, Debbie McGrath and Jay Jamrog. Oakes, former president of learning management vendor SumTotal Systems and current chairman of the American Society for Training & Development, a professional group, is the new institute’s CEO. McGrath, founder of the Web site HR.com, is the institute’s chair. Jamrog, the current executive director of HRI, will serve as the new firm’s senior vice president of research.

The company has four primary offerings: research, community, tools and technology. In its materials, it reduces its formal name to the slangy acronym I4CP, and even Oakes acknowledges that the nickname conjures up memories of “Star Wars” robot C-3PO. But the company’s goal is a serious one: better productivity.

There is a lot of talk in the industry about managing human capital and human resources, or managing talent, Oakes said in a statement.

“These terms are really only a means to an end—the end being improved productivity. That’s why we chose the name the Institute for Corporate Productivity, to signify clearly what we feel is most important to senior leaders.”

Jim Walker, a human resources consultant in La Jolla, California, said the new firm has a sound foundation in HRI.

“I’ve always thought very highly of the HR Institute,” he says. “I’m sure this is building something better.”

Walker, who has spoken at an HRI conference, speculated that the new institute may explore alternatives to in-person conferences, such as webcasts. A challenge to the new organization and existing ones is HR leaders’ reticence to travel, he says.

“It’s getting increasingly hard to get people away from their offices to get to meetings,” he says.

The new organization will emphasize connecting people through the Internet, Jamrog says. In addition to event webcasts, the new institute plans to establish blogs and “wikis,” or sites where community members can contribute ideas on different topics.

Traditional conferences will still be part of the mix. The institute plans to formally launch its new products and services at a February conference in Florida featuring speakers like Coleman Peterson, a consultant who once was head of HR at Wal-Mart.

Oakes sees research groups like the Corporate Executive Board and the Conference Board as rivals to the new institute. He says I4CP will stand out by offering practical tools for taking action on research results, such as a calculator for determining the financial impact of a low retention rate and online guides to improve retention and monitor progress toward that goal.

The new firm plans to charge corporate customers annual subscription fees. Oakes declined to provide a range for the fees, saying prices will vary based on the products and services selected. “We feel quite comfortable that our pricing is very reasonable when compared to other competitors,” he says.

For-profit status, Oakes says, will allow the institute to raise venture money and fuel the group’s expansion. In the short run, I4CP will rely on HR.com for help with operations, such as marketing and finances. The new company’s headquarters will be in Seattle, where Oakes lives. The research arm will remain in Florida. Oakes says he can’t provide a figure for the price of HRI’s assets because he does not have a final assessment of the purchase.

HRI has 22 full-time staffers involved in research. It produces about 2,500 pages of original research per year and provides clients with access to another 7,500 pages of external research it collects and validates, Jamrog and Oakes say. HRI has relied on selling annual subscriptions for its research services to major companies, including 3M, American Express and Johnson & Johnson. Traditionally, HRI has not sought money from HR industry vendors. The new organization plans to seek vendor sponsorship for areas of research, but intends to retain its objective stance, Jamrog says.

The shift, he says, relates to the way corporate HR department budgets have shrunk in recent years. Companies are more value-conscious, Jamrog says, and want practical guidance in addition to pure research.

“They need more than just what I used to do,” he says.

—Ed Frauenheim

The recent news that 38,000 Ford Motor Co. employees agreed to take the company’s buyout offers might have been welcome news for the Dearborn, Michigan-based automobile manufacturer.

It wasn’t for the United Auto Workers, which has already seen its membership fall to 598,000 from 1.5 million 20 years ago.

Industry experts say the union may need to take some type of drastic action if it wants to continue to wield the clout that it once had.

“I woudn’t be surprised if the UAW decided to merge with another industrial union,” says Jim Hendricks, a founding partner in the Chicago office of law firm Fisher & Phillips. “The buyouts at General Motors and Ford severely reduce the number of active members paying dues at the union, and this in turn affects the union’s ability to organize.”

For employers in manufacturing, a UAW merger could result in a jump in organizing activity.

“We might be heading in the direction of having one big industrial union,” says Mark Neuberger, a partner in the Miami office of Buchanan Ingersoll. “This could result in more political clout for labor, especially if the Democrats retain control [of Congress] in 2008.”

Labor attorneys say that logical mergers for the UAW would be either with the United Steelworkers of America or the International Association of Machinists and Aerospace Workers.

Both the UAW and the machinists union have been trying to organize retail auto dealerships, so a merger among them might make sense, Hendricks says.

But the UAW has tried to merge with these unions before. Ten years ago, a merger between the autoworkers, steelworkers and machinists fell through because the three groups couldn’t see past their differences, says Gary Chaison, a professor of industrial relations at Clark University in Worcester, Massachusetts.

“There were too many differences in the way they selected officers and were organized,” he says.

But trying again might be the easiest option for growth the UAW has, Neuberger says. The only alternative it has would be to try to establish alliances internationally, particularly in China, where the auto industry is taking off.

“It would be easier for them to try a merger than set up a union in China,” he says.

—Jessica Marquez