Since 2000, nearly half the manufacturing jobs in Southeast Michigan have been lost, according to a new report by the Southeast Michigan Council of Governments—with more to come.
The General Motors and Chrysler bankruptcies could mean an additional 12,280 jobs lost, according to the report, among dealerships and production facilities.
It’s impossible to predict the full extent of the impact, according to the report, because GM hasn’t made public how many of the 3,000 salaried jobs and 2,200 to 2,500 dealerships it plans to cut are in southeast Michigan.
The effect will likely spill beyond the auto industry, SEMCOG says. An additional 1.26 jobs could be lost for every automotive job lost, according to the report, in industries like suppliers, services or restaurants.
New guidance from the Internal Revenue Service answers more questions that have been raised about the federal COBRA premium subsidy.
Under that subsidy, included as part of a broader economic stimulus bill President Barack Obama signed in February, the federal government pays 65 percent of COBRA premiums for employees involuntarily terminated from September 1, 2008, through December 31, 2009. The subsidy is available for up to nine months.
In the latest guidance, the IRS makes clear that employees called up from the reserves for active military service would be considered involuntarily terminated and thus eligible for the subsidy, assuming they opt for COBRA.
“This is the case regardless of whether the civilian employer treats the employee’s absence as a termination of employment or a leave of absence,” the IRS said.
Also eligible for the subsidy are elected officials who lost re-election or couldn’t run for re-election because of term limits, the guidance notes. In addition, employees who are hired for only a limited period of time, such as a teacher hired for only one year, would be eligible for the subsidy.
“If an employee hired for a limited period works to the end of the period, is willing and able to continue employment, and terminates employment because of the failure of the employer to offer additional work, an involuntary termination occurs for purposes of the premium subsidy,” the IRS said.
Companies likely would find Sonia Sotomayor an evenhanded judge of business issues if she joins the U.S. Supreme Court, observers say.
Judge Sotomayor, whom President Barack Obama nominated last month to fill the vacancy created by the retirement of Justice David Souter, has a reputation as a liberal on social issues. But on business issues, she is as likely to rule in favor of companies as against them, observers say.
Sotomayor, who has been both a New York prosecutor and a corporate intellectual property attorney, was appointed in 1992 as a federal judge by President George H.W. Bush. In 1998, President Bill Clinton elevated her to the 2nd U.S. Circuit Court of Appeals in New York, where she has served since.
Her most prominent decision may have been her 1995 ruling as a district court judge that effectively ended the 232-day Major League Baseball strike, a ruling President Obama cited when he introduced her.
Also regarded as significant is her role as a member of the three-judge panel that ruled in June 2008 for New Haven, Connecticut, in Frank Ricci et al. v. John DeStefano et al. in rejecting reverse discrimination charges brought by white firefighters.
Appellate attorney Thomas H. Dupree Jr., a partner with Gibson, Dunn & Crutcher in Washington, says that while the Supreme Court tends to vote along a traditional conservative-liberal split on affirmative action and related constitutional issues, “business cases are different, and I don’t think that you can really reliably predict” how Sotomayor is likely to rule.
“There are a lot of cases where she’s ruled for business and a lot of cases where she’s ruled against business,” Dupree says.
“I think there is reason to believe that she is a moderate on issues that are of concern to the business community,” says Lauren Rosenblum Goldman, an appellate attorney and partner with law firm Mayer Brown in New York.
“She has resisted attempts by plaintiffs lawyers … to allow more class actions to be brought against business” and has been a moderate on federal pre-emption issues, Goldman says.
“She is a careful and thoughtful jurist,” says Goldman.
Mainstream views Employment law attorney Michael W. Fox, a shareholder with law firm Ogletree, Deakins, Nash, Smoak & Stewart in Austin, Texas, has reviewed Sotomayor’s employment-related decisions. She “looks to me like someone who’s pretty traditional in the sense of not far out of the mainstream one way or the other,” Fox says.
Sotomayor has ruled both for and against employers and is willing to “side with the Establishment if she feels they’ve got the strong argument,” Fox says.
Although Sotomayor is likely to fall on the liberal side of the court’s liberal-conservative split, Fox says, “it strikes me that the business community should not be terribly upset” by her nomination.
“You just don’t seem to be able to find any sort of political agenda” in her decisions, says employment law attorney Dennis Westlind, a member of law firm Stoel Rives in Portland, Oregon.
Even the Ricci ruling was “sensible” in that ruling against New Haven would have led to filing more class-action discrimination lawsuits, says Paul J. Siegel, a partner with employment law firm Jackson Lewis in Melville, New York.
Employment law attorney Bettina B. Plevan, a partner with Proskauer Rose in New York, says that while Sotomayor likely would show empathy for cases involving individuals who oppose big companies, “many of the issues that go before the Supreme Court are one business against another business.”
With regard to insurance cases, “She’s been extremely favorable to insurers in coverage disputes,” says Randy J. Maniloff, an insurer attorney with White & Williams in Philadelphia. “The fact [that] she favors insurers so much, who are typically not a sympathetic bunch, would be further evidence that she’s not as liberal on business issues as she might be on social issues,” he says.
However, Richard Samp, chief counsel for the Washington Legal Foundation, says he is “tentatively troubled” by Judge Sotomayor’s nomination. For instance, her 2005 decision in Shadi Dabit v. Merrill Lynch, which the U.S. Supreme Court overturned in a unanimous ruling, “would have significantly expanded the scope of securities fraud class actions.”
Even so, “we certainly want to take a careful look, and we recognize that whoever is going to get confirmed is going to be a Democratic nominee that is probably more liberal than I would choose,” Samp says.
Meanwhile, Sotomayor’s tenure on the 2nd U.S. Circuit Court of Appeals, which frequently rules on business issues, will be a positive for businesses, Dupree says. “As a lawyer, you always want to have a knowledgeable and experienced judge,” he says.
Even with unemployment standing at 9.4 percent, a great majority of people who have not been laid off aren’t very worried about the possibility, according to study released Friday, June 5, by Bankrate Inc. of New York.
While two-thirds of survey respondents knew someone who had lost their job, almost 80 percent of those still working saw no pink slips in their future.
In fact, 50 percent of those polled said they wouldn’t quit their job even if they won the lottery.
That is all the more impressive as the survey showed that 44 percent of those polled said they had received some kind of cut in pay or benefits.
When asked what the most important reason was for staying in the current job, 39 percent of respondents said for the income, 33 percent said because they enjoyed the work, 7 percent said because they had a good boss, 11 percent for the health benefits, 5 percent for other benefits such as retirement and 5 percent “other.”
A small company was defined as having five to 250 employees. To qualify for the survey, respondents had to have offered a 401(k) retirement plan for at least one year and have between $500,000 and $10 million in retirement plan assets.
Some 31 percent of respondents ranked providing employees with investment education as their top concern; 29 percent selected fiduciary and legal responsibilities as the top concern; and 21 percent chose the selection and monitoring of retirement plan investment options.
A full 74 percent said that they valued an investment advisor’s ability to help them meet the legal responsibilities associated with offering a retirement plan.
The survey of 401 respondents was conducted by telephone interviews between December and March.
Employers are evenly split between those who say their 401(k) plans can provide adequate retirement savings for employees and those who say they can’t or are unsure, according to a Mercer survey.
Also, 68 percent of the 180 employers offering 401(k) plans that were surveyed said achieving adequate retirement savings for employees is a shared responsibility between employers and employees, according to a Mercer news release about the survey results.
Of employers with defined-benefit plans open to new employers, 81 percent believe achieving adequate savings is a shared responsibility, and 15 percent believe it’s predominantly the employer’s responsibility.
Just over half (53 percent) of employers that have suspended matching contributions to their 401(k) believe planning an adequate savings is a shared responsibility.
All employers surveyed named a variety of obstacles to employees reaching their retirement income objectives, with 38 percent citing low participation in retirement savings plans; 32 percent citing inadequate savings rate; 17 percent, volatile markets; 6 percent, poor investment decisions; 4 percent, borrowing from retirement savings; 2 percent, cash-out at termination of the plan; and 1 percent, citing that accounts are spent too quickly in retirement.
“Some 35 years after the enactment of the Employee Retirement Income Security Act and its subsequent amendments and associated regulations, Americans may have no more secure a retirement future than in 1974,” Amy Reynolds, a Mercer principal and defined-contribution retirement consultant, said in the Mercer news release.
“Today’s employers are increasingly relying on employee savings plans, such as the 401(k), as the foundation for their workers’ retirement income—yet recent economic pressures underscore the weakness of this approach.”
Lehman Brothers Holdings was ordered by a U.S. Bankruptcy Court judge on Wednesday, June 3, to pay the Pension Benefit Guaranty Corp. $127.6 million to shore up its underfunded pension plan, PBGC spokesman Jeffrey Speicher confirmed.
“The PBGC expects to become trustee of the pension plan within the next several weeks,” Speicher said in an interview following the ruling by Judge James Peck in New York.
Notice a trend? When you’re providing opinions as part of your gig, it’s always easy to focus on the negative stuff.
But that’s an easy way out, sometimes. And so I interrupt the normal stream of columns written with a slightly negative spin to bring you a little ray of sunshine: the sweetest jobs in HR and talent management.
I’ve expanded the list to include the mystic (and maybe mystifying) term “talent management.” Your BS meter has likely started buzzing.
But there’s a reason for the terminology shift. Over the past 30 years, there’s been a progressive movement to redefine the value proposition of HR through titles and classification. Here’s the rough timeline:
Back in the day: HR wasn’t called HR, it was called personnel (and still is, in some places). Move the forms, get the transactions done. That was pretty much it.
Today: The profession got reclassified from personnel to human resources, in part to signify we had arrived as a strategic partner. Some fulfilled the vision, some didn’t.
The future: Less than satisfied with being classified as HR along with folks still doing personnel-type activities, those in the high end of the HR practice have begun to classify themselves as talent management.
With history and semantics in mind, I’ve expanded the list of sweetest HR jobs to include talent management roles. If you’re a performer in HR, you’ll increasingly find strategic opportunities for growth in roles with talent management in the title. Don’t be intimidated, because you’re qualified for consideration as long as you’ve kept an active hand in areas like recruiting, performance management and leadership development.
Here’s my countdown of the Sweetest Jobs in HR/Talent Management, fed to you again in countdown style like I’m Casey Kasem (keep reaching for the stars, by the way):
(Tie) Corporate recruiter (professional/management positions and up) and niche third-party recruiter:The heart of any organization is talent, and it’s the recruiter who goes out and brings the carcasses back to your office park. If you love the chase, the key to the best internal and external recruiter jobs is the focus. For the internal corporate recruiter, it’s a sole focus on filling professional and management-grade positions for the mother ship. Sell the company brand and go pick off top talent, without the nastiness that comes with heavy entry-level recruiting or the churn and burn focus of the call center. What could be better?
Of course, corporate recruiters aren’t going to buy beach houses with their compensation. That’s where the niche third-party recruiter comes into play. Armed with a singular focus on a specific industry or micro-niche (think health care IT sales professionals as an example), the niche third-party recruiter has the ability to build relationships nationally and develop deep subject-matter expertise. That reduces the number of cold calls over time, and a little sales/marketing ability, combined with deep expertise in the niche, can catapult the third-party recruiter into the earnings stratosphere.
Both types of recruiters still get to enjoy the thrill of the chase. Whether you can chase new business effectively determines which role you end up in, and also your lifetime earnings.
Director of talent management: Turn the aforementioned BS meter off for a second, and let’s talk about what’s real. First up, no one can agree on the total scope of this role. With that in mind, most people seem to agree that the director of talent management role starts with talent acquisition (a highfalutin way of saying “recruiting”), then helps to maximize the abilities of those hires as they enter and move through the organization. Strategic activities like leadership development, succession planning and performance management are usually part of the mix in this role. How is that different from the director of HR role? No messy employee relations, risk management or cost-of-health-care considerations to deal with. Just deal with the talent, my friend.
Google HR: If you’re reading this, chances are you’re an HR or talent pro at some level. If you’re an HR professional, you’ve seen Google at the top of the best places to work lists and turned green with envy. Admit it, you want to be part of the Google HR team so you can live large and take charge from a people and talent perspective. It’s the HR version of joining the Yankees or The View, depending on your perspective, gender or interests in life. Just don’t be the person managing the massage specialist, corporate concierge or the day care center. Back rubs, laundry runs and diaper changes are traps for the upscale HR pro. Even at Google.
Recruiter, Microsoft Xbox Division: That’s right, Microsoft comes in ahead of Google, but not just for any job. The one you want holds responsibility for recruiting technical and creative talent for the Xbox division in Redmond. Washington. I didn’t even know this job existed until Jason Pankow, senior recruiter for Microsoft’s Xbox LIVE and Xbox Software groups, was referred to me and started sharing his thoughts at the Fistful of Talent blog. Think about it: You’re recruiting for one of the strongest corporations in America, but your sole focus is on the gaming industry. You’re the gatekeeper for the jobs that about 21 million kids consider to be their dream gig, and you get to help pick the cream of the crop. Heavy interviewing day? No sweat, just fire up the Xbox in your office and take in a session of “Halo” to reduce your stress. Heck, invite the candidate in and make that part of your interview.
HR manager, director or VP (excluding single-person HR practices):You want the seat at the table. You’re told to take the seat at the table. Guess what? There’s only one job that qualifies you to be at the table, and that’s the HR generalist role at the manager, director and VP levels. Everything else in HR and talent management contributes to these leadership generalist roles. From the HR manager level and up, you’re responsible for everything related to employees in your operational unit or company. Without question, it’s a tough role, and you’ll have to balance the needs of the business with employee advocacy. It’s No. 1 on the list because it means you lead the function. You get to help call the shots in your unit or company. That’s why you got in the game to begin with, right?
So that’s the list. By the way, you probably can’t afford day care (or a house) in Silicon Valley, and Jason Pankow has already glued himself to the chair of sweet job No. 2 in Redmond. But there are three other sweet-job categories left, and to land a position in one of them, make sure you have a hand in how talent comes into your company and what happens once it’s there.
Whether you call that personnel, HR or talent management, that’s where the growth and opportunity will be in the years to come.
They aren’t your employees, yet they work for you. And third-party sexual-harassment prohibitions apply to them and to you. If you employ temporary workers, and one of them harasses your employees, or one of your employees harasses them, you have a third-party sexual-harassment headache on your hands.
Are you liable? Yes. However, the liability may be shared, depending on the circumstances. Because temporary employees usually work for temp agencies, they’re generally considered employees of those agencies. So the agencies have the first line of responsibility. “The staffing firm is the primary employer, even though [the temp] may be working at the worksite of another employer,” says Edward Lenz, senior vice president, legal and government affairs for the National Association of Temporary and Staffing Services (NATSS) based in Alexandria, Virginia.
However, you should know that most staffing agencies don’t educate their temps or contingent workers specifically about sexual harassment before sending them on assignment. Rather, they usually tell contingents that if they have any “problems or concerns” while on the job, to immediately report those problems to them, says Lenz. “Staffing firms might be reluctant to get into particulars,” he adds. “If they put a line in their policy manual that says ‘What to do if you’re sexually harassed by the customer,’ it sets a negative tone for the employment relationship,” he says. “So I think some [temp] firms might put those kinds of issues into a more generic context.”
That could be a problem for you on two counts. First, because you share responsibility for what happens to temporary workers while they’re on your premises, it might be wise to let them know what problems to look out for, such as personal security risks and discrimination, which includes sexual harassment.
Secondly, if temp firms instruct their workers to report sexual-harassment problems to them, and not to you, you may never hear about it since most agencies tend to simply remove a temp from a situation in which they’re experiencing problems and place them elsewhere.
Some agencies, however, will address the situation directly with you on behalf of their employees. That’s good. Because if one of your employees is harassing people, you need to step in and put an immediate stop to it. Or, if one of your vendors is harassing temps, they’re probably also harassing your other workers, and you need to address that, too. If you have a choice (and you usually do), you might consider negotiating disclosure of these issues when you negotiate your initial contract with a temp agency.
“I have seen some [companies] who address independent contractors in their sexual-harassment policies, which is a very good idea that makes it clear to them and to employees that sexual harassment is unacceptable,” says Marcia Haight, a sexual-harassment expert and president of Haight Consulting in Pacific Palisades, California.
Dallas-based Texas Instruments, for example, sends its temporary workers through a brief orientation which covers, among many other business issues, sexual harassment. Texas Instruments’ human resources trainers also make sure contingents get a copy of their sexual-harassment brochure.
Other companies say they also ask temporary workers to report incidents of sexual harassment to them in addition to telling their agencies. Others also insist on doing investigations themselves. “The advantage of keeping it in-house would be that you would have control over the promptness and quality of the investigation, and you could satisfy yourself that your accused [full-time] employee, or the temp employee, was given a fair shake in the investigation if you did it yourself,” says Haight.
Clearly, someone needs to do something. “There’s potential liability if neither party takes appropriate action to address the harassment issue,” says Lenz. “Both could be liable.”
While sexual harassment of temporary workers might not be an everyday occurrence, by not addressing the issue in advance, you may have some surprises in store for you down the road. Some surprises aren’t worth waiting for.
Personnel Journal, July 1995, Vol. 74, No. 7, p. 44.
Many employers believe that because their workers are employed and have insurance coverage, they’re seeking appropriate medical care. Unfortunately, that often isn’t the case.
The health-care system in this country is in a state of flux, and public concern about its status is second only to concerns about the economy. Costs are spiraling upward at a rate far outpacing inflation, with no reductions in sight.
Many people who are unable to afford health insurance have limited access to the health-care system. An estimated 35 million people in the U.S. are without health insurance, and women and children, in particular, suffer greatly from reduced access to needed health care.
Although President Clinton has made overhauling the health-insurance and health-care industries a priority, delays have been inevitable. The process of reform is expected to be lengthy and fractious, leaving U.S. businesses to fend for themselves in dealing with issues of cost and accessibility. Businesses must continue, at least for the time being, to supplement uncompensated care for the uninsured.
To improve the health of their employees and thus reduce company-related health-care costs, companies have implemented a variety of wellness programs. Some organizations have been disappointed because they haven’t been able to evaluate outcomes effectively and verify the results that they had hoped to achieve.
One type of wellness program, however, has been proving itself repeatedly: the work-site prenatal program. This program offers to pregnant employees (and often to pregnant spouses of employees) information on birth risks, assessments for their risk factors, case-management intervention and educational materials for a healthy pregnancy.
Work-site prenatal programs have been developed to control birth-related costs.
Most of the prenatal work-site programs in existence today have been developed by or for insurance carriers. The insurance companies realized that a good portion of their health-care costs occurred as a result of women delivering preterm or having low-birthweight babies. Because many of these women are in the workforce, or are insured through their spouses’ medical plans, expenses related to childbirth have become the largest single component of total health-care costs for employers, according to a 1992 study conducted by Philadelphia-based CIGNA Corp. The study, titled The Corporate Cost of Poor Birth Outcomes, indicated that these childbirth-related expenses account for between 10% and 49% of employers’ total health-care costs. Adding the expenses of absenteeism, disability, turnover and cost shifting compounds this cost further.
A 1987 report of the Southern Corporate Coalition to Improve Maternal and Child Health reported that the average cost of rehabilitation for a preterm infant was $20,000. CIGNA’s recent study, however, found that its actual cost for preterm births and low-birthweight babies averaged $40,000, far higher than anticipated.
CIGNA commissioned the study, along with a second study, titled Impact of Uncompensated Maternity and Infant Care Costs on Employers, to determine the impact of preterm births on its organization. These studies verified the alarming facts about the costs associated with maternal and infant health care.
The first report found that U.S. businesses and their employees pay an estimated $5.6 billion annually for the health-care costs of mothers who deliver babies who are underweight or born prematurely. The second report found that U.S. businesses pay an additional estimated $4 billion annually for uncompensated health-care costs incurred by the nation’s poorest mothers and infants.
CIGNA summarized its findings: “Put simply, infant mortality is taking an expensive toll on U.S. businesses.” W. Allen Schaffer, senior vice president for CIGNA’s Employee Benefits companies, takes it one step further by saying, “Poor maternal and child health is a subject that many people associate with the poorer segment of our society, and because of this, some have looked at maternal and child health as someone else’s problem. Nothing could be further from the truth. These health-care problems have a real impact on the business community, as well as the community at large.”
Many employers believe that because their workers are employed and have insurance coverage, they’re seeking appropriate medical care. Unfortunately, that often isn’t the case. “This isn’t just a problem for the inner-city poor,” points out Schaffer. He says that the CIGNA studies showed that among the population of employed people who have group health insurance, there’s “a high percentage of less-than-best pregnancy outcomes.”
Anne Serra, administrator of employee services and recreation for Pomona, California-based Hughes Missile Systems Co., concurs. She started a prenatal work-site program for her company’s 4,000 employees and insured spouses as a result of lackluster prenatal attitudes. “Even though everyone here has insurance, not all our women sought care during their first trimesters, and quite a few weren’t reporting their pregnancies until after the first trimester or just before delivery,” she says.
The reports funded by CIGNA cited several reasons why insured women may not seek prenatal care, such as:
Inadequate time off for doctor visits
Extreme out-of-pocket coinsurance costs
Severe shortages of practicing obstetricians in many parts of the country.
Atlanta-based Crawford & Company, a health-care-management corporation, found that participants of its Maternity Management Program faced similar barriers to effective prenatal care. “We found that many physicians require a percentage of professional fees for prenatal care and delivery payable within the first trimester,” says Jeff Aycock, Crawford’s vice president of health-care management. Because the cost for physician care from start to finish of a pregnancy can range from $2,000 to $4,000, the physicians required the pregnant women to pay anywhere from $500 to $1,500 up front. “Many of the mothers in our program were generally young and just starting their careers, and found it difficult to come up with that kind of money,” says Aycock. “Consequently, we found that the women were delaying prenatal care for as long as possible, and some until just prior to delivery, based simply on financial factors.”
In certain types of businesses, other factors also may play a role in determining how early an expectant mother seeks prenatal care. Serra discovered that some Hughes Missile Systems’ employees weren’t reporting that they were pregnant because they didn’t want to be transferred—something that is mandatory for pregnant women who work in those areas of the business that have a potential for exposure to toxins. “Some of the women hid their pregnancies to avoid transfers or going on disability,” she says.
Educate workers to seek care early.
Study after study demonstrates that U.S. businesses spend millions of dollars on back-end heroics to save the children of mothers who don’t seek prenatal care. The money would be better spent at the front end for education and prevention.
According to the American Journal of Obstetrics and Gynecology (May 1987), 63% of private-sector preterm births and low-birthweight cases are preventable. “The key to prevention is early recognition of pregnancy,” says CIGNA’s Schaffer. “If we can encourage mothers to access prenatal care early in their pregnancy, and, equally important, educate them about the risks their lifestyles pose to their babies, we have a better chance of favorably impacting the outcome of their pregnancies.”
Prenatal risk-management programs have been proven to reduce the risk, and related costs, of low-birthweight and preterm births. Debbie Nuttycombe’s case illustrates this fact. Nuttycombe is the owner of USA Financial in Newport News, Virginia. When her physician determined that she was pregnant with triplets, Nuttycombe realized that she would need help through her pregnancy, which was deemed high-risk. She immediately joined a program called Baby Benefits by Richmond, Virginia-based Health Management Corp.
Baby Benefits provides pregnant women with nurses who consult with the women and with their participating physicians, coordinate appropriate care, conduct monthly follow-up phone visits and answer questions throughout the pregnancies. “The benefits nurse who was assigned to me knew about high-risk pregnancies and knew the best things to do relative to multiple-birth deliveries,” says 33-year-old Nuttycombe.
Nuttycombe’s pregnancy experience is evidence from the prospective mother’s viewpoint of how effective such a focus can be. “The most important thing I got out of Baby Benefits is that the staff recognized that my pregnancy wasn’t just affecting me, but that it was a family experience,” says Nuttycombe. “They realized that for me to be taken care of properly, my family had to be taken care of properly.” During Nuttycombe’s pregnancy, a nurse helped her find a housekeeper, and convinced Nuttycombe’s insurance carrier to pay for the service. Housekeeping service cost the company far less than hospitalization, which would have been the alternative for preventing preterm labor. The cost savings for the insurance company by avoiding hospitalizing Nuttycombe totaled approximately $28,000.
A Program Effectiveness Study prepared by Blue Cross and Blue Shield of Richmond, Virginia, on the Baby Benefits program that Nuttycombe used, provides tangible evidence of savings for companies offering the program. The actuarial study showed that women who participated in Baby Benefits had 20% fewer charges related to preterm and low-birthweight babies than those women who didn’t participate in the program.
Many of the insurance carriers for which other prenatal work-site programs were developed also have reported significant savings as a result of the programs, even through programs that have been in place for only a short period of time. Their experiences support the theory that through early education, assessment for high risk, and appropriate case-management intervention, mothers and babies can have more positive outcomes more often.
Rick Dorazil, corporate director of benefits at Roselle, Illinois-based Motorola Inc., agrees. He says that in the first year of providing a prenatal educational, assessment and home-based care program, the consumer-electronics manufacturer saved twice as much in health-care costs as it spent for the program. The program cost the company between $200 and $225 per pregnancy. He says that the eventual savings from preventing preterm births and birth defects far outweigh the program’s expense.
Haggar Apparel Co.’s experience with a prenatal work-site program is similar. The Dallas-based company introduced a broad program of coverage for prenatal care when it discovered that 95% of its female work force wasn’t seeking prenatal care because of the expense. Haggar’s program allows expectant mothers to receive full reimbursement if they see their physicians within the first trimester of their pregnancies.
Savings to the company have been significant, reports Anne Hunt, Haggar’s health and wellness coordinator. “Health claims dropped from $2.3 million in 1991 to $1.8 million in 1992, a savings of more than a half-million dollars,” says Hunt. “And this savings was realized even though the total number of births increased.”
Find a prenatal program to fit your needs.
How does a corporation know which programs are best for its employees and for the overall health of the company? As a human resources professional trying to help your company and its employees, you need to know how to identify a prenatal program that has all the elements for successful implementation. Just what is a prenatal program and what should it include?
Programs available range from simple educational materials to comprehensive pregnancy case management for high-risk mothers. In all cases, prenatal medical care is provided by the patients’ obstetricians, although not all the programs establish relationships with physicians or interact with doctors to share data.
Generally, companies make their programs available to all pregnant employees. Some also offer the program to the spouses of male employees, particularly if many are covered by their companies’ insurance programs. By offering such broad coverage, the companies can screen for the high-risk pregnancies while still providing beneficial information to all expectant mothers.
To be most effective, a prenatal-education program should be as inclusive as possible, both in terms of participants and in the components of the program, says Connie Marshall, spokesperson for the national March of Dimes’ campaign and author of From Here to Maternity, The Expectant Father and other prenatal-wellness materials. “Several elements are required in order to produce the desired outcome, which is delivering healthy babies,” she says. “Comprehensive pregnancy-educational materials and risk assessment by qualified health-care professionals are the minimum requirements for a program that addresses corporate and employee goals and objectives.”
Marshall considers education one of the most vital components of a successful prenatal health-management program. “Many of the factors contributing to low-birthweight babies are lifestyle issues,” says the clinical OB nurse. “Recent studies show that women underestimate the impact that smoking, drinking and drug use have on unborn fetuses. They also are unaware of dietary recommendations and the necessity of weight gain during pregnancy.”
Hughes’ Serra concurs, pointing out that she was surprised at the number of women in her organization who weren’t informed about lifestyle issues and the impact of lifestyle on pregnancy. “We wanted to target those women who needed information and weren’t getting it,” she says. “We wanted to ensure that they had the information they needed to make the right behavioral choices. We offered incentives, such as the opportunity to earn infant car seats or similar items, to entice them to join the program.”
Materials to accompany work-site education programs are relatively inexpensive for employers to provide. Most programs include these materials with the price of the program. If purchased separately and in bulk, many of these materials cost as little as $5 each.
These accompanying materials can educate women on health issues that lead to lifestyle assessment and change. However, Marshall cautions that many companies, and consumers in general, have fallen into the trap of assuming that any book published on pregnancy is clinically correct and up-to-date. “You can’t assume that just because a book is in a bookstore—and possibly is a best-seller—that it’s accurate, and more importantly, up-to-the-minute. Obstetrics is a very specialized and rapidly changing field, and buyers need to be aware,” Marshall says.
To be most effective, educational materials need to be complete, accurate, up-to-date and written in clear and understandable language, according to Thomas Garite, an obstetrician specializing in high-risk pregnancies, and professor and chairman of obstetrics and gynecology at the University of California, Irvine.
Most of the available programs recommend and use the March of Dimes’ Babies and You work-site seminars as an enhancement to their educational component. The March of Dimes recently launched another national campaign, Men Have Babies, Too. The organization designed the campaign to help heighten men’s awareness of the role they play in pregnancy, and to teach them how they can assist their partners in having a healthy baby. “We need to include the expectant father; he’s very important to the outcome of the pregnancy, too,” says Marshall. “It’s been shown that when the expectant father is educated about pregnancy, the chances for a healthy baby increase.”
Other important program components for which corporations should look are management of high-risk pregnancies and postnatal follow-up. All of the major programs available today offer a risk assessment for expectant mothers in order to screen for potential problems as early as possible. “One of the goals recommended by all groups concerned is to assure that women with high-risk pregnancies get into the health-care system as early as possible,” says Donald M. Hayes, medical director for Chicago-based Sara Lee Corp. “Baby Benefits is of immeasurable help in identifying these women and helping them make this connection.”
W. Jack Hudson, director of insurance and retirement for Indiana University, is equally pleased with the prenatal program that his university uses: Start Smart from Indianapolis-based Anthem Health Systems, Inc. “I’m aware of a number of pregnancies that had been identified as high risk and resulted in the intervention by prenatal nurses and case managers,” he says. “I feel confident that this intervention has resulted in both employee satisfaction and in significant cost savings to the plan.”
Keep track of outcomes data.
For most companies, data gathering will be a must in order to verify the cost-effectiveness of the program. Many of the vendors offer quarterly and annual reports on program use, costs, and so on.
Serra says that outcomes data and usage information are important. She has had difficulty tracking the success of Hughes’ internal program, titled Maternity Fraternity. Because the company insures its employees through a self-funded plan, as well as a number of HMOs, Serra often can’t obtain the information she needs to measure the effectiveness of her program, even though more than 200 women have used it in the two years during which it has been in place.
CIGNA’s Schaffer agrees that outcomes data are vital. “Only when a health plan establishes benchmarks and has a system in place to continuously measure quality-management programs can we be satisfied that we have met the standards expected of us,” he says.
Corporations can choose from programs that do all the administration, or can opt to manage the program themselves. Costs for the programs vary, and are subject to negotiation and customization. Some programs offer per-employee prices, or per-pregnant-employee prices. Prices can range from 30 cents to 50 cents per employee, or $200 to $250 per pregnant employee. Many programs add hourly charges as well for high-risk pregnancies. There may be additional implementation fees, which normally include posters, setup and customization of materials.
The size of the employee base and other factors can influence price as well. Corporations always should investigate what the cost of the program would be for the organization. Group demographics, managed-care arrangements and the program components used all can affect the pricing.
Dorazil of Motorola sums up his company’s experience with Irvine, California-based Tokos Clinical Services’ BabyLink program by saying, “There are certainly high-tech applications that are saving us hospitalization costs. What’s even more important, however, is the component that allows us to identify potential problem pregnancies before they become expensive problems.”
Advises Schaffer: “Prenatal care and well-baby programs are important components of an employer’s health-plan offering, and these programs customarily are part of a managed-care plan. Managed-care programs offer an integrated, coordinated system of care that identifies individual medical needs and oversees all the care administered to a patient. Maternity care and case management of high-risk pregnancies are examples of how coordinated care can affect outcome and add value.”
Serra points out that even if a company can’t offer a comprehensive program, it should at least offer the educational component. Her commitment is unflagging, even though she lacks the hard data to back up this commitment. “Any information that a company can provide its employees is worthwhile,” she says.
Corporations that make an investment in education and risk assessment are contributing to the well-being of their workers and taking positive steps toward changing the statistics on pregnancy outcomes and infant mortality—an issue that affects all of society. They also will benefit by lowering company health-care costs and increasing satisfaction among workers, resulting in reduced absenteeism, increased productivity and improved morale. Additionally, companies offering prenatal programs are making a commitment to future generations, helping ensure that as many babies as possible get the best start that they can.
Personnel Journal, October 1993, Vol. 72, No.10, pp. 39-48.
