A survey of 2,500 North American HR executives released this week by Boston-based consulting firm Novations Group found that at many companies, top executives spend too much time talking to employees and not enough time listening to them.
“Of survey respondents who have an opinion on the issue, 44 percent said management speaks too much,” Novations reported, while a majority (53 percent) said it gets the right balance between speaking and listening. But here’s the kicker: Only 3 percent–yes, that’s a miserly 3 percent–feel senior management spends too much time listening to employees.
“HR executives have a unique perspective on what’s going on within an organization, what employees really think and how the leadership team is perceived,” Novations director of consulting Jan Thibodeau said in a press release. “So here’s an insight into whether top management communicates effectively or not. The findings tell us management gets it wrong at two out of five companies.”
According to Thibodeau, management often assumes that listening is a natural skill. “In large, complex organizations listening is neither a simple task, nor does it come naturally,” she said in the release. “Leaders have to learn to listen with purpose, with sensitivity to certain words and language, and with attention to underlying meaning. But in too many cases what should be a genuine dialogue becomes just a monologue.”
At a time when employee engagement is so crucial, management needs to foster a culture that values open dialogue, Thibodeau said. “This is particularly key with Gen Y employees who placed a high value on an interactive work environment.”
These are all good points, and more reasons why executive pay should be handled more along the lines of what Dallas Mavericks owner Mark Cuban has called for. And it is even more proof that Ernest Hemingway had it right when he said, “I have learned a great deal from listening. Most people never listen.”
Effective August 1, Gannett will freeze its pension plan, with participants no longer accruing benefits. At the same time, Gannett will enhance its 401(k) plan by matching employees’ salary deferrals, up to the first 5 percent of pay, with company stock. Gannett now matches 50 percent of employees’ salary deferrals up to the first 6 percent of pay, also in company stock.
McLean, Virginia-based Gannett says it is moving away from its defined-benefit plan to save money.
“Freezing the pension plan benefit is another important step in keeping Gannett financially strong. This change will mean a considerable savings for the company even after returning significant dollars to employees through the enhanced 401(k) plan,” Gannett CEO Craig Dubrow wrote in a memo to employees.
The change affects nearly all of Gannett’s roughly 25,000 employees in the U.S., a Gannett spokeswoman said.
Gannett, which publishes 85 daily newspapers, including USA Today, and operates 23 television stations in the U.S., last year reported $1.05 billion in net income on revenue of $4.9 billion.
Earlier this week, Gannett said it would write down its assets by between $2.5 billion and $3 billion to reflect the declining value of its operations in the U.S. and Great Britain.
In freezing its pension plan, Gannett joins a long line of large and well-known U.S. companies—including Hewlett-Packard, IBM and Sears Holdings—that have done the same.
Last year, for example, 52 percent of Fortune 100 companies offered a defined-benefit plan to new salaried employees, a steep decline from 2002, when 83 percent did so, according to a recent Watson Wyatt Worldwide survey.
Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.
Demand for senior executive talent increased during the first quarter of 2008 despite a slight dip in the tumultuous financial sector, according to a newly released state-of-the-industry survey from the Association of Executive Search Consultants.
The number of searches for financial services executives was flat compared with the preceding quarter, but down 7.2 percent from the first quarter of 2007. The technology sector was also down year over year, falling 5.1 percent.
Financial services is typically the largest executive search sector, but it dropped to second during the quarter with a 22 percent market share, trailing the industrial sector’s 24 percent.
Searches for manufacturing executives saw the biggest year-over-year gain, at 10.1 percent.
Overall global executive searches were up 9 percent from the fourth quarter of 2007. Year over year, they were up 1.4 percent. And industry revenue was up 13.2 percent year over year. Other yearly increases included a 5.5 percent rise in average revenue per search consultant and a 15.5 percent increase in average fee per assignment.
Les Stern, a partner in New York executive search firm Heidrick & Struggles who specializes in the financial sector, has seen dips in the sector last as long as three years and as short as a few months. He wouldn’t speculate how long this one might last.
“Whenever there is an economic downturn, the financial sector consistently goes through downsizing,” Stern says, with cuts made quickly. Then firms often find themselves suddenly shorthanded. Cuts in financial services typically are corrective actions caused by handing out “careless credit,” he adds.
The financial sector is so broad-based, Stern says, that the downturn of demand for executive searches within it cannot be pegged to trouble in one part, such as the mortgage industry. But he says Wall Street-based investment banks are the ones taking the biggest hits.
Paul Heller, president and founding partner of New York-based executive search firm Cromwell Partners, says many financial services companies are retooling their ways of doing business in reaction to meltdowns in the industry.
“As a result, they’re looking for different kinds of people than they’ve looked for in the past,” says Heller, noting that people with risk management and valuation skills are now in demand.
Peter Felix, president of the Association of Executive Search Consultants, agrees.
“While there have been very few searches in investment banking, capital markets and real estate, there is still a need for executives in private banking, asset management, private equity and insurance,” he says.
In this kind of climate, financial sector companies “tend to go for quality players” and hire the long-established executive search companies to fill their top jobs, Stern says.
The quarterly survey showed other executive search industry sectors maintained their market shares for the first quarter. Consumer products had 18 percent of the market, technology 15 percent, life sciences/health care 11.5 percent, nonprofits 6 percent and profes- sional services 3 percent.
General Electric remains the world’s standard-bearer for leadership development. It ranks first in Fortune’s “Top 20 Global Companies for Leaders” and draws universal admiration for its $1 billion training and development budget, its legendary 53-acre Crotonville campus in New York and a long list of alumni who now lead major companies.
GE’s massive leadership development programs range from entry-level training to ongoing classes for the 197 officers who run the 300,000-employee company. “Leadership development is embedded in GE’s philosophy and operating system, and is a core competency of the HR function at GE,” says John Lynch, senior vice president for human resources. “It’s also where I, and all our senior human resource managers, spend the majority of our time.”
But Fortune’s Top 20 list also includes companies that are less well known for leadership development, including four companies from India, led by Hindustan Unilever, which ranks just three notches below GE on the list. The company’s 37-year-old executive director for human resources, Leena Nair, is both the powerhouse behind a new model for accelerated leadership development and one of its early products. The model springs from India’s leadership shortage, but offers universal best practices for training and retaining the next generation of executive talent.
Also on the Fortune list is Whirlpool, which has finally pulled the wraps off its leadership development program after years of quietly producing top executives. Senior vice president for global human resources David Binkley runs a tiered series of leadership development programs based on a proven set of leadership attributes defined by the CEO and the executive committee.
The common ground for all these companies is that human resources owns the leadership development process but receives enormous support from the full executive committee and from a system that holds business leaders and line managers accountable for identifying and training executives. At the top companies, leadership development dominates the HR agenda and the C-suite agenda as well. Fortune’s list was developed by Hewitt Associates in partnership with Fortune and the RBL Group.
Feedback and accountability Whirlpool has been pouring its corporate heart and soul into leadership development for decades, but shunned publicity about its programs to avoid attracting poachers. The company is determined to keep its leaders for itself, unlike GE and other “academy” companies that are famous for their leadership programs and expect to see some of their executives picked off.
“We don’t want to be an academy company, and unlike some of my colleagues, I find no flattery in the title,” Binkley says. “We do everything we can to keep our exceptional people from leaving. We used to keep our leadership development programs below the radar for precisely that reason, but we now recognize that our work has value to shareholders, and we communicate more about it.”
Whirlpool is the largest manufacturer of major home appliances in the world, with 2007 sales of $19.4 billion. Binkley, who manages 73,682 Whirlpool employees in 32 countries, has moved up though the company’s leadership channels for 20 years, including a couple two-year stints as director of HR for Europe and for Asia.
He is also a member of the executive committee and a teacher in Whirlpool’s high-level leadership training courses. “Compelling leadership is necessary for success here,” he says. “Leaders are accountable for developing leaders. This is our explicit stated philosophy.” Binkley devotes 75 percent of his time to leadership development.
Whirlpool’s leadership development programs now center on a model of 12 attributes developed by the CEO and the executive committee in 2002. “We were locked in together in a hotel room on a Sunday afternoon to develop the model,” Binkley recalls. “To put science behind it, we worked with the HR group and pulled in a number of experts from a wide range of fields. Before, we used a model that HR developed, but it never had the traction of the model developed by the executive committee.”
The 12 critical attributes and practices are character and enduring values, communication, confidence, customer champion, developing talent, diversity with inclusion, driver of change/transformation, extraordinary results, management skills, strategy, thought leadership and vision.
Whirlpool’s leadership development programs and its worldwide policies and practices for selection, onboarding, performance systems, rewards and corporate culture are now governed by the 12-attributes model. The leadership development programs, designed around the model, are organized into three tiers.
The first tier consists of the company’s Leadership Development Programs to train new graduates, many with MBAs, for top positions in brand marketing, engineering, finance, global information systems, global supply chain and human resources. Each program runs three or four years and includes formal training, mentoring and rotations though job assignments lasting 12 months or more. The human resources program, for example, is a four-year rotation through three job assignments, including one global assignment.
“LDPs are next-generation leadership development,” Binkley says. “We recruit from the best universities and put 100 people into the programs each year.” Globally, 350 to 400 people are moving through their LDP rotations at any one time.
The second tier is a series of programs called Leading the Whirlpool Enterprise, which moves senior executives though two one-week classes taught at two levels. Leading the Whirlpool Enterprise 1 is a global program that focuses on each attribute in the leadership model and includes a 360-degree assessment based on the attributes for each participant. “The point is deep feedback,” Binkley says. Level 1 of the program is required for the top 700 leaders at the company.
Leading the Whirlpool Enterprise 2 is a one-week program for the top 300 to 400 Whirlpool executives. “We take the top 10 strategic objectives of the company and ask leaders to take on the most pressing business issue and develop a 100-day plan to resolve it,” Binkley says. Whirlpool is now developing the curriculum for Leading the Whirlpool Enterprise 3, which will reinforce classic leadership development and provide additional feedback for participants.
The third tier of Whirlpool’s leadership development process is called Leaders Developing Leaders. The executive committee members shape the design, determine the investment and teach in the program at the company’s Brandywine Creek Training Facility in Covert, Michigan. The participants are 20 to 25 top Whirlpool executives selected from around the world.
“They undergo a very intensive assessment and enter a one-year leadership development plan with an external coach and an internal coach,” Binkley says. “We don’t use this to fix broken people. We use it to make the best better.”
The company also uses a multi-language worldwide survey to measure employee engagement, with a section that evaluates managers’ leadership skills and organizational leadership. “We slice the results by geography, position, gender and a number of other factors,” Binkley reports. “We really monitor the health of the business through the scores we see for managerial and organizational leadership. For managers and executives, the scores are directly connected to their rewards.”
Whirlpool’s approach to leadership development hinges not only on instruction and mentoring but constant feedback and direct accountability for developing talent. “Leaders know that meeting their specific objectives for leadership development are just as important as their financial results,” Binkley says.
Accelerating development On the other side of the world, Indian companies now focus intensely on building skills to meet the shortage of executive and managerial talent and the scramble for top business leaders at companies experiencing high growth rates. Hindustan Unilever has accelerated leadership training and promotions across the company.
“Five or six years ago, it took 15 years to hit the top level; now it takes 10 to 12 years,” says Nair, the company’s executive director for human resources. “This is true not only at Hindustan Unilever, but all across India. Companies need to accelerate leadership development to match their growth needs. We have been taking a risk and pushing younger people into roles of greater responsibility. They step up to the task and bring fresh thinking to the position. We balance this with a mix of more experienced people. This acceleration has been highly successful.” The average time in any one position is two to two and a half years.
Hindustan Unilever, which is 51.55 percent owned by the Anglo-Dutch Unilever, is India’s largest consumer products company. Nair manages the company’s 15,000 employees, including 10,000 production workers, with an HR staff of 250, including 80 managers and a leadership development team of seven. In addition, each of the company’s 45 plants employs three HR leaders, who spend 50 percent of their time on leadership development.
To replenish the ranks, Hindustan Unilever brings in 50 to 55 MBAs every year for 15 months of business leadership training, with heavy mentoring and rotations out to rural areas and through other parts of Unilever. “This is a program for which we are very much admired,” Nair says. Both Nair and the company’s CEO are products of this program.
Nair joined Hindustan Unilever as a management trainee when she finished her MBA 16 years ago and is now the first woman on the management committee and the youngest executive director at the company. In April 2008, the former CEO of Hindustan Unilever moved up to become president of Unilever’s Western Europe region, and Nitin Paranjpe, executive director for the home and personal care unit, moved into the CEO spot.
Paranjpe joined the business leadership training program when he completed his MBA, and quickly moved through a series of increasingly challenging executive positions, including a stint with Unilever in London. At 44, he is Hindustan Unilever’s youngest CEO. The company runs with a minimum of three candidates in line for the CEO position and two for other critical positions.
“The essential reason that we are so successful in leadership development is the commitment of senior managers and executives, who devote 40 percent of their time to leadership development,” Nair says. “I have ultimate responsibility, but the process is owned by senior management.”
HR is directly accountable for managing what Hindustan Unilever refers to as “hot jobs, hot people.” The hot jobs are the 50 most strategic positions in the company, and the hot people are the 50 people with the highest potential. “Our objective is that the hot people must occupy 90 percent of the hot jobs,” Nair says. “Every 15 days, I report to the management committee on these 50 jobs and 50 people, including any difficulties that any of the 50 may be having. We want to maximize the movement of these 50 people into these 50 jobs.”
For six days each year, the management committee meets to discuss the highest band of executives in the company. Every committee member has a regret-attrition number, and bonuses are affected by performance in this area.
“At these meetings, the committee discusses the top 150 to 200 people, name by name,” Nair explains. “It’s not acceptable for a committee member to say that he has never met one of these people. Each member has to find a reason to know every one of them. We bring in every piece of objective information about all of these people and make a very informed call about their development.”
To recruit the best MBAs in the country, Hindustan Unilever now promotes itself as a company that produces top executive talent. According to Nair, 440 Hindustan Unilever alumni are now CEOs or board directors. Alumni include Anand Kripalu, managing director of Cadbury India; P.M. Sinha, chairman of Bata India; and Debu Bhattacharya, managing director of Hindalco.
Nair regrets the departures, but notes that alumni-turned-CEOs give full credit to their training at Hindustan Unilever. Globally, Unilever has pulled 150 executives from Hindustan Unilever, which is the largest exporter of talent to the parent.
Nair outlines four best practices for leadership development. “You need tremendous involvement from senior management,” she says. “And you need to take the basics of talent management and do them brilliantly. The basics are quite simple: Know your jobs, know your people.”
She also notes the importance of differentiating talent. “Put your mind behind the top 50 people,” she advises. In addition, it’s important to closely manage careers. “We move people across businesses every two-and-a-half or three years. Our rule is that no business can hold talent. All job openings are visible to everyone across the company.”
“The key is our belief that talent makes all the difference,” Nair says. “This is deeply ingrained. Senior management models the behaviors that stem from this belief.”
Workforce Management, June 9, 2008, p. 25-28 — Subscribe Now!
First DataBank Inc.’s proposed settlement of pharmaceutical price-fixing charges is not likely to produce any immediate savings for health plan sponsors or insurers if approved, but it may lead to renegotiation of contracts with pharmacy benefit managers that could produce gains for health plans, benefit consultants say.
First DataBank, a unit of Hearst Corp. that publishes price data on thousands of drugs, was accused in a 2005 racketeering suit of conspiring with pharmaceutical wholesaler McKesson Corp. to inflate the average wholesale price of hundreds of prescription drugs by 5 percent.
A federal judge in Boston on May 30 gave preliminary approval to a settlement in which First DataBank would pay $1 million to insurer and health plan plaintiffs and roll back the 5 percent markup it reported on 1,356 drugs. Independently of the settlement, the company announced that it would voluntarily adjust reported average wholesale price markups on other drugs and cease publishing average wholesale price data altogether within two years after the adjustments.
The proposed deal replaces an earlier settlement proposal that was rejected by the court in January.
Though average wholesale price is the basis for calculating reimbursements under most PBM contracts, First DataBank’s planned average wholesale price adjustments won’t likely translate into savings for plan sponsors. Pharmacy benefit manager contracts typically included clauses allowing renegotiation in the event of such average wholesale price changes, and PBMs will likely seek to adjust the terms of their contracts to maintain their profit margins, consultants say.
“The measuring stick is changing, but I don’t get the sense that underlying drug prices are changing,” says Joshua Golden, senior pharmacy consultant with Hewitt Associates in Atlanta. “I don’t believe it’s going to drive significant plan savings for any client.”
On the other hand, PBM contract renegotiations triggered by the settlement could give plan sponsors a chance to work out better deals for themselves, consultants add. Health plans should demand more information from PBMs if the First DataBank deal is approved, including exactly how much they spent on the roughly 1,356 drugs covered by the settlement, the drugs’ average wholesale prices, and discounts and rebates applied, says Sean Brandle, vice president and national pharmacy practice leader for the Segal Co. in New York.
Health plans that “dive into the data” will be in a better position to negotiate with PBMs, he notes. One tactic, for example, would be for sponsors to seek a cap on any increase in the next year’s costs for certain classes of drugs, such as diabetes medications, Brandle says.
Events such as the average wholesale price shake-up “are going to drive us to more realistic pricing, eventually,” he says.
Pharmaceutical wholesaling giant McKesson Corp. faces widening litigation charging that it manipulated prescription drug prices, while its alleged co-conspirator in the purported scheme, a leading publisher of drug pricing data, moves closer to a settlement.
Connecticut and a San Francisco city health plan have filed separate civil racketeering complaints against McKesson, charging that, starting in 2001, the company fraudulently added a 5 percent markup to the average wholesale price of hundreds of brand-name drugs, costing the state and city health plans millions of dollars. San Francisco Health Plan’s suit seeks class-action status on behalf of all public-entity health plans in California.
The two suits, filed in U.S. District Court in Boston, follow a related complaint filed by several union health plans in 2005 against McKesson and First DataBank Inc., a unit of Hearst Corp. and a leading provider of drug price databases. On March 19, 2008, a federal judge certified the case as a nationwide class action on behalf of roughly 11,000 private third-party payers—including self-insured employers, insurers and union health plans—that reimbursed prescriptions based on average wholesale prices reported by First DataBank between 2001 and 2005.
Plaintiffs’ lawyers estimate the damages to third-party payers at more than $5 billion.
McKesson has not yet responded to the San Francisco Health Plan and Connecticut complaints, but has denied the allegations in the 2005 class action, asserting that it does not set average wholesale prices and did not conspire with First DataBank to do so.
Meanwhile, U.S. District Judge Patti B. Saris on May 30 granted preliminary approval to First DataBank’s proposed settlement of the 2005 class action.
Under the settlement—which awaits comment from class members and final approval—the San Bruno, California-based publisher will eliminate the 5 percent additional markup it included in its reported average wholesale prices for 1,356 drugs identified in the complaint, and pay the plaintiffs $1 million.
Independent of the settlement, First DataBank also announced in early June that it will similarly roll back reported average wholesale prices for other drugs not included in the settlement and will stop publishing average wholesale price data within two years of the pricing changes.
The average wholesale price adjustments aren’t likely to produce any savings for health plan sponsors, though First DataBank’s settlement could open the door for third-party payers to negotiate better deals with their pharmacy benefit managers, benefit managers say.
The racketeering suits filed by San Francisco Health Plan and Connecticut—which do not name First DataBank as a defendant—are the latest in a long-running legal battle over alleged manipulations of average wholesale price data by drug manufacturers and others. Average wholesale price data is used by third-party payers and PBMs as the basis for prescription reimbursements.
Since 2001, dozens of states, insurers and health plan sponsors have sued drug makers for allegedly inflating average wholesale price figures to increase payouts. In March, for example, 11 manufacturers, including Abbott Laboratories and Watson Pharmaceuticals, agreed to pay $125 million to settle a class-action suit charging that they massively inflated the cost of drugs covered under Medicare Part B.
San Francisco-based McKesson, the nation’s largest drug wholesaler, became a target in the average wholesale price litigation in 2005, when a group of union health plans charged that it had conspired with First DataBank to boost markups on hundreds of drugs.
Pharmacy chains and other retailers typically buy drugs from McKesson and other wholesalers on the basis of what is called wholesale acquisition cost, which is a benchmark price set by manufacturers. The pharmacies and PBMs, though, charge insurers and health plans on the basis of the average wholesale price, which is set by manufacturers and includes a markup over wholesale acquisition cost.
First DataBank has acted as an information source for the marketplace, compiling wholesale acquisition cost data on thousands of drugs and publishing average wholesale price data that was based on surveys of wholesalers until it halted the surveys in 2005.
The 2005 class-action suit—and the San Francisco Health Plan and Connecticut suits filed in May—charge that McKesson and First DataBank agreed to artificially boost average wholesale price figures to benefit McKesson’s retail pharmacy clients.
The suits allege that starting in late 2001, the two companies reached a secret agreement to raise the markup between wholesale acquisition cost and average wholesale price on more than 400 brand-name drugs to 25 percent from 20 percent. As part of this deal, First DataBank agreed not to use survey information from other wholesalers to establish the average wholesale prices for those drugs, but to rely solely on information supplied by McKesson, the suits allege.
The two companies camouflaged the alleged scheme by waiting until a drug manufacturer raised the underlying price of a drug before tacking on the additional 5 percent spread for that product, the suits allege. Several drug manufacturers asked First DataBank to explain the increases in their products’ average wholesale prices, but First DataBank stalled those inquiries and the manufacturers eventually acquiesced to the changes, the suits allege.
The alleged scheme ended in 2005, when First DataBank announced that it would stop conducting surveys to obtain average wholesale price data, court filings say.
The three complaints all charge McKesson with violating the federal Racketeer Influenced and Corrupt Organizations law along with various antitrust, unfair trade practices and consumer protection laws.
The two recent suits expand the scope of the litigation, bringing public-entity health plans into an action that until now has involved only private health insurers.
Alarmed by the increasingly negative attitude toward trade liberalization on Capitol Hill and the campaign trail, a group of 26 businesses and trade associations is lobbying to increase federal help for victims of globalization.
The firms have coalesced as Congress and the Bush administration negotiate renewal of Trade Adjustment Assistance, a program that provides retraining, wage insurance, health care and other assistance to people who have lost their jobs because of imports or their company moving operations to a foreign country.
The fate of a trade agreement with Colombia, an administration and business priority, hinges in part on the outcome of TAA talks. In April, House Speaker Nancy Pelosi put an indefinite hold on legislation to implement the deal until “economic security” issues are addressed.
The formation of the Trade and American Competitiveness Coalition may be the catalyst for a TAA breakthrough, according to Sen. Max Baucus, D-Montana and chairman of the Senate Finance Committee.
“This is a big day,” Baucus said at the Capitol Hill launch of the group Wednesday, June 11. “I’m very excited. We’re turning the corner here.”
Baucus seeks to double TAA funding, which totaled $259 million in the last fiscal year.
He and the coalition advocate extending TAA to workers in the service sector. Currently, it applies only to those in manufacturing. Sen. Charles Grassley, R-Iowa and ranking member of the Finance Committee, is open to expanding TAA but declined to comment on negotiations, according to an aide.
Last fall, the House approved a TAA bill that would boost funding by $8.6 billion over 10 years. It includes provisions that would reform unemployment insurance and require companies to increase notice of plant closings from 60 to 90 days. The administration threatened to veto the House measure.
The business coalition is not endorsing specific legislation, but it is telling members of Congress that TAA is central to producing a skilled workforce and helping communities recover from global competition setbacks.
Sarah Bovim, director of government relations and international trade policy for Whirlpool, said that hundreds of former Maytag workers in Newton, Iowa, took advantage of the program when Whirlpool shut down operations in 2006 after taking over the company.
“TAA is critical during this adjustment period,” Bovim said.
About 3,500 employees in General Electric’s consumer and industrial division have utilized TAA in the last several years, according to Orit Frenkel, GE senior manager for international trade and investment.
The company helps dislocated workers upgrade their skills and return to the job market by providing up to $10,000 for retraining in addition to federal assistance, Frenkel said.
Beyond supporting former employees, GE also helps regions recover after the company departs.
“We want to see the communities attract investment and transition as smoothly as possible,” Frenkel said.
By focusing on those left behind in the global economy, the coalition hopes to ease trade fears.
“We want to send the message that trade is not the problem,” said Laura Lane, senior vice president of international government affairs for Citigroup. “Trade is the solution.”
Nonprofit health insurer Kaiser Permanente announced this week that its 159,000 employees would be the first employees to participate in Microsoft’s online health record, Healthvault.
Healthvault, which launched in October, built its online health record so that companies could easily integrate it with other software that is currently used to store medical records.
Kaiser, which made the announcement Monday, June 9, will allow employees to transfer prescription information, test results and other health data from the company’s own online personal health record, My Health Manager, to Microsoft’s Health Vault.
If the pilot program for employees is successful, Kaiser said it will make the service available to its 8 million members nationwide, according to news reports.
The announcement came a month after Google announced the launch of a similar site, Google Health. Other employers, most notably the employer group Dossia, have been busy designing similar Web sites that securely store online medical records.
Dossia, an employer coalition led by Wal-Mart, Intel, Pitney Bowes, BP and Applied Materials, relaunched its efforts last fall after switching technology developers for the creation of a personal electronic health record for employees of member companies.
A computer technician struck by a car while crossing a street to purchase cigarettes and snacks is entitled to medical and temporary disability workers’ compensation benefits, a New Jersey appeals court ruled last week.
In 2003, the technician, Carlos Cruz, was driving a company van en route to a client when he parked across the street from a delicatessen to take his “usual morning break,” according to court records in the case of Carlos Cruz v. Micros Retail Systems Inc.
The deli was about five blocks off the direct route from his employer’s office, where Cruz began his trip, to the client’s site. While crossing the street to the deli, a car struck Cruz and he suffered severe injuries, court records state.
Micros denied that the injuries arose while Cruz was within the scope of his employment, and a witness testified that company policy required employees to go directly to their work sites.
A workers’ comp judge, however, ruled that off-premises employees enjoy the same ability to deal with basic needs, such as lunch and coffee breaks, as do on-premises employees. Cruz’s stop for snacks was a minor deviation from his mission on his employer’s behalf, the judge found.
Micros appealed the judge’s decision, but the Superior Court of New Jersey, Appellate Division, agreed with the reasoning of the workers’ comp judge.
Chief information officers attending the Midwest Technology Leaders Conference at the MGM Grand Detroit last week were told that they and their departments have become the No. 1 target of plaintiff attorneys in lawsuits.
“Today, the CIO is generally the first witness, the subject of the first deposition request,” said Brian Ziff of the Detroit law firm of Clark Hill.
“That’s a sea change from the way litigation has been run. You used to be transparent, but no longer,” said Tom Hathaway, also of Clark Hill.
They were part of a panel discussion titled “CIOs as First Responders in E-Discovery.”
Federal guidelines on the gathering of evidence by attorneys were amended in 2006 to account for the explosion of electronically stored information, or ESI. But, Hathaway said, many companies have been slow to change their internal policies accordingly.
He said that according to one poll, one-third of executives said their company didn’t have a policy on ESI. Twenty percent didn’t know if their company had a policy or not.
Companies regulated by the U.S. Securities and Exchange Commission need to keep electronic data such as e-mails for three years. Other companies can establish policies of their choosing.
Ziff said companies need to track and access all their ESI, a process that has become much more complicated in recent years. Data can be stored on employees’ home computers, office desktops, laptops, PDAs, BlackBerrys, memory sticks and other devices.
“You need a road map for where all the IT is,” he said.
Ziff said data must be purged as part of a regular policy, not in response to a suit or fear of a suit. A company must also have a policy that keeps data from being purged as soon as it finds out a lawsuit is filed, or even if there is reasonable knowledge by company executives that one might be filed.
Heidi Maher, an attorney who practices e-discovery and compliance for Hopkinton, Massachusetts-based EMC Corp., said the average cost of sorting through e-mails to determine such things as their relevance to a case or if they might be protected by attorney-client privilege is $2 per e-mail, so the first thing a company should do is to establish an e-mail retention and destruction policy and abide by it.
She gave an example involving DuPont, which in one case had to sort through about 75 million documents, at a cost of $25 million. The company had a retention policy, and discovered that half of the documents involved should have been destroyed under the policy, but had not.
If the policy had been followed, it would have saved $12.5 million.
Matt Roush of the Great Lakes IT Report, the panel moderator, finished the one-hour session by saying, to much laughter, “I’m amazed we got through an hour on the topic of e-discovery and didn’t hear the words ‘Kwame Kilpatrick.’ ”
