The 40th Carnival of HR is up over at McArthur's Rant. Quite a milestone - so check it out!

While I appreciate Lexi's passion on the subject, I respectfully disagree with several of her points mentioned in her entry.

First off, I think the bigger question that needs to be addressed in relation to impoverished areas is why it costs more to eat healthy.  The sad fact is, while people may want healthier choices nearby, they may not necessarily be able to enjoy them, as the prices in the Whole Foods market in a poorer neighborhood are not going to be that much cheaper than those in an upscale area.  Placing a moratorium on new fast food places is not going to change this.  In fact, the community may feel alienated and frustrated because the choices they could afford are being held off in favor of places that are out of their budget.  The ban will merely serve to highlight the economic challenges that come with eating healthy, while doing nothing to lessen this burden, which probably has more to do with obesity in depressed community than the proliferation of fast food places.   

Another point of contention is in regards to the government regulating food in schools.  The rights of a child sequestered in a publicly funded educational institution are a completely different animal than the rights of an adult going to a place of business by their own volition.  Moreover, in order to get this argument to click, one would have to assume that an eight or nine year old has the same mental capacity to make the same kind of decisions relating to health that an adult can make, which is simply not the case.  A child that would eat unhealthy food without restrictions would not be able to fully grasp the consequences of their actions, whereas an adult does not have such an excuse.

Also, the drinking while driving analogy can make sense the moment that somebody eating one extra Big Mac could potentially lead to the tragic death of another person.  Until then, it is rather irresponsible to draw conclusions that overindulging in food equates to a regulatory level that is reserved for drunk driving.  DUI laws are strict because of the real possibility of damage that one can inflict on other people who would be affected by the intoxicated driver’s poor choice.  Since the same cannot be said in relation to what a person eats, such an analogy should not be made in this situation.

Finally, Lexi had mentioned that without laws, people could do anything they wanted without concern of the affects on other people.  I absolutely agree with this sentiment.  However, the L.A. City Council’s ruling does not stem from a concern on the affects of other people, because what one chooses to eat simply does not have an affect on those surrounding that individual.  Rather, the essence of the ruling is to protect people form themselves, which is not something that the law is designed to do.

Again, I think the issue that needs to be addressed in the wake of the L.A. City Council’s decision is the expensive cost of healthy food, and how a solution is needed to make healthier options more affordable.  Until then, however, limiting liberties in lieu of increased obesity rates is not the proper reaction.

This past week, the Los Angeles City Council voted to place a one-year moratorium on new fast food places in a 32 square mile section of their city, in an attempt to encourage people in the designated area to eat healthier, which will go into effect if approved by mayor Antonio Villaragosa.  This comes on the heels of Governor Schwarzenegger signing a statewide mandate banning trans-fat from restaurants for the same purpose.  While these government impositions will hopefully enable people to eat healthier when they dine out, which is of course a noble cause, it is unfortunate that such zeal to produce healthier citizens comes at the cost of personal responsibility and choice.

Admittedly, it may be a little tough to take a hard line stance on the government on this issue.  After all, the endgame of this decision is to increase health by decreasing unhealthy choices, and it is very difficult to view the motive behind the decisions in a negative light.  That being said, it does not grant the rulings themselves the same exemption.  Laws like the ones put forth by the state and local governments the past few weeks ultimately intrude upon important ideas such as personal choice and responsibility.  Granted, from a big picture perspective, the laws are not too unreasonable – menus are not going to suddenly resemble a health food store; it’s not like this week’s Los Angeles ruling is ordering that a wrecking ball be taken to existing fast food places in the designated areas.  However, both decisions at its core boil down to the government making choices on behalf of its people.  If a person wants to eat unhealthy, isn’t it his or her right to do so?  And even though we should rightly be discouraging people from making poor dietary choices, there is a fine line between discouragement and force, and these laws squarely cross into the latter camp. 

Again, the rationale behind these decisions is a worthy one.  There is nothing wrong with desiring better health for people.  However, there has to be a better way to see such a goal come to fruition without the government stepping in to essentially protect people from themselves.

The Carnival of HR is up over at the HR Capitalist. Check it out!

“Going Green”, has been one of the latest trends to hit Corporate America. In the last few years I have heard more “carbon footprint” and “carbon offset” discussions than I wish to count. Everything seems to be printed on recycled materials these days and there are recycling bins for virtually everything. Despite all of the green hoopla, those of us in the insurance business see hospitals continuing to perpetuate paper waste one forest at a time.

I am referring to hospitals billing habits. Have you ever received an Emergency Room bill or surgery bill from a hospital? You know, one of those over inflated bills they send every 30 days. They ignore the fact that you are insured and immediately send duplicate copies to you and your insurance company. Better yet, there are professional services bills, facilities bills and bills just for the sake of sending them bills.

If the multiple bill thing did not confuse you, then perhaps the 1,000 percent mark up for services will. I once saw a hospital bill with a charge of $22 for a single Tylenol. Why do hospitals do that? Is it supposed to scare you into paying the bill or make you appreciate the care you received? Just tell us the real price of the supplies and services provided. Enough of the shell game already!

Ironically, once your insurance company receives the bill they have to “re-price” it down to their contracted amount for the supplies or services with that specific hospital. Seems like a lot of extra work. I will never understand why hospitals don’t just start with this step and send the bill with the contracted amount.

With re-pricing comes a whole new wave of paperwork. The insurance company sends you an EOB (Explanation of Benefits) that shows the adjusted price and their payment to the hospital. Odds are, the hospital has sent out another inflated bill as part of their 30 day billing cycle. Once the hospital actually receives the payment and records it, they have to send you an amended bill to reflect the “re-priced” items and the credit. Keep your fingers crossed that it all works out to a $0 balance; otherwise you could be receiving “balance bills” for months to come.

Doesn’t seem like a very efficient or “green” process to me. Who knows, one day we may see a line of recycled paper that was made from hospital bills. Then again maybe not, the cost would be 1,000 percent more than standard paper.

Official Announcement from the IRS:

As of July 1st, the IRS's optional reimbursement rate has increase from 50.5 cents a mile to 58.5 cents a mile for the rest of 2008.

From the official IRS release:

"The rate will increase to 58.5 cents a mile for all business miles driven from July 1, 2008, through Dec. 31, 2008. This is an increase of eight (8) cents from the 50.5 cent rate in effect for the first six months of 2008, as set forth in Rev. Proc. 2007-70.

In recognition of recent gasoline price increases, the IRS made this special adjustment for the final months of 2008. The IRS normally updates the mileage rates once a year in the fall for the next calendar year."

For more information, visit www.irs.gov.

1. Not treating employees with respect. There is no law that says you must treat employees with respect; it's just good common sense. Remember the golden rule: Do unto others as you would have them do unto you. If you want to be treated with respect, you must treat others with respect. It's a two-way street. 
2. Ignoring sexual or race-based jokes or comments. Sure, you’re culture is a big ol’ boy’s club – when you start adding women to the mix, you have to make sure that your employees change their behavior to accommodate. Same goes if you start adding men to an all-women mix – they can’t continue to treat the workplace like they’re in an episode of Sex and the City. Managers cannot allow such behavior in the workplace. Ignoring it can be construed as condoning it – a big no-no.
3. Making sexual jokes or sexual comments, using profanity, and/or touching other employees. Managers must lead by example. Just like they can’t ignore inappropriate behavior, neither can they participate. You’re just asking for trouble.
4. Hesitating to Document Performance Issues. In HR, you know how valuable documentation is. But do your managers? NASCAR claims it fired the employee who is now suing because of performance issues; she claims that she always got good performance reviews. If someone makes a claim and you fire that person, it will look like retaliation (see #5 below). But if you fire that same person after they make a claim, and you have documentation on poor performance going back months before the claim was made, you now have a leg to stand on. Doesn’t mean the fired employee won’t sue; just means you have a stronger defense.
5. Retaliating (or inadvertently retaliating) against an employee who has made a complaint. Managers must be careful in issuing discipline, changing schedules, assigning duties, etc., because any of these may be construed as retaliation.

There was a program launched in 2007 that offers huge discounts in prescription costs. The California Rx Card Program is for all California residents and can save many people as much as 75% on prescriptions.

As a resident of California, you and your family have access to a FREE Prescription Drug Card program. Simply download your Prescription Drug Card and receive savings of up to 75% at more than 50,000 national and regional pharmacies. You may create as many cards as you need. Participating pharmacies include the following: CVS/pharmacy, Walgreen’s, Rite Aid, and K-Mart, as well as thousands of independent pharmacies.

Just go to http://www.californiarxcard.com/, enter your name and e-mail address and they will generate a printable membership card for you. This card is pre-activated and can be used immediately.

This program is available to the uninsured.  So if you or a relative have a prescription that you have to pay out of pocket for, be sure to ask about this program.  I went to CVS last weekend and asked about it.  They knew exactly what I was talking about.  My brand name prescription was only $144 under the program instead of the $224 I usually pay.  What a difference!

Business Insurance magazine recently reported that Senator John McCain has proposed requiring older couples with incomes of $160,000 or more to pay higher premiums for Medicare D if they are enrolled in the program.  Interestingly, President Bush had called for a similar proposal as part of his fiscal year 2009 budget.  This modern day Robin Hood scenario is a bad idea for many reasons.  

First and foremost, why should the government penalize Medicare beneficiaries who have successfully planned for their retirement?  Our government should encourage people to save for their future - not charge them more for a benefit for which they have been making contributions for more than 40 years.  

Second, the process for managing Medicare D deductions is already inefficient; so inefficient and just plain bad that according the Medicare Advocacy website (medicareadvocacy.org), there are 3 pending lawsuits resulting from the government’s inability to properly process the deductions and fix errors in a timely matter.  Part of the problem is that there are 3 separate government agencies involved in the process - the Centers for Medicare & Medicaid Services (CMS), the Social Security Administration (SSA) and the Internal Revenue Services (IRS).  The other part is that, unlike Part B which has a single deduction option, there are multiple deductions for Part D, depending on the selected plan.  Add another layer to the matrix, namely income, and the problems will only get worse.

Finally, I doubt this is even cost-effective.  There are time and resources involved in working through the process, updating and testing systems, as well as trouble-shooting once in place.  Further, if the government is already in court as a result of their inability to handle the current matrix, I am fairly confident that by adding complexity and therefore increasing the likelihood for errors, more court cases are bound to follow.  In addition, according to the US Census Bureau, only 10.8% of households 65 or older earn over $100,000.   The percent of earners over $160,000 would be even less.  So Senator McCain’s proposal is to add complexity to an already inefficient process for less than 10% of the eligible population.  That fact alone speaks for itself.

What other options are there?  Well, if this process was taken over by a private entity, the first order of business would be to drive costs out of the process - what can be automated, simplified, eliminated?  Next, private enterprise would look for ways to reduce the costs of goods sold - in this case, the cost of the prescriptions.  Finally, the consumer pricing model would be reviewed, looking at both hard costs and soft costs.

There is no doubt that there is a need for the “modernization and improvement of Medicare”.  However, implementing a program that creates administrative burden, lawsuits, and penalizes Americans who successfully plan for retirement is not the answer. 

Earlier this week the FDA confirmed that 81 people have died and nearly 800 suffered severe allergic reactions to the tainted blood thinner, Heparin. For any watching this Heparin situation unfold, you should be scared – I am. For the rest that believe ignorance is bliss, it just may kill you the next time you take an FDA approved medication. Allow me to explain.

In the wake of this Heparin tainting, a congressional subcommittee questioned the commissioner of the FDA and uncovered some scary facts.

• The tainted Heparin came from China. (Not the first time the U.S. has received poor quality products from China - remember all those lead tainted toys last year?).
• 714 drug making plants in China provide prescription drugs to the U.S.

Scared yet?

• $20 Million is the estimated annual cost to inspect 15% (500) of the 3,249 foreign plants that ship drugs into the U.S.
• Roughly 10% (350) of foreign facilities will be inspected with the FDA’s $13 Million budget in 2008.

Are you scared now?

As I ponder these statistics, I am reminded of all those drug company excuses for the soaring prescription drug prices during the last ten years. You know the line, “Drugs are more expensive in the U.S. because of the FDA trials and the approval process.” My response, “What good is the FDA approval process if we don’t inspect the foreign facilities supplying us drugs?”

Perhaps drug companies should divert some of those huge profits from their advertising campaigns or their “drug pushing cheerleader” workforce or their massive political contributions to funding the FDA inspections of the foreign facilities they are using to supply us with drugs. Besides, they are the ones that moved to these foreign locations to add to their profits. 

With situations like this occurring, you may want to reconsider that next prescription.

David Boaz of the Cato Institute says that in a free society, citizens don’t turn to the national government to solve every problem.  In fact, he says that the measuring stick of a free society is the amount of life that remains outside the control of government.   

We’re in presidential election season and the so-called health care crisis is a primary topic among the three remaining candidates.  I’ll leave the industry diagnosis to others, but I thought a reasoned study of their positions would be helpful.

After carefully reading the health care policy positions of all three presidential candidates, it is clear that at least one major difference separates Senators Hillary Clinton and Barack Obama from their Republican Party opponent Senator John McCain – a government mandate that all Americans be required to purchase a health insurance plan.

Senator Clinton proposes a sweeping mandate that “every American (be) required to have coverage,” while Senator Obama only requires that “all children have health coverage,” apparently leaving adults with the option of going uncovered.  He does, however, require that “all employers offer ‘meaningful’ coverage” for their employees.  An in-depth search yielded nothing on how to define “meaningful coverage.”  So, though he doesn’t require individuals to acquire coverage on their own, he does require all employers to provide it.  Both candidates propose tax credits to those who purchase their own health insurance.

Senator McCain opposes any mandate for coverage, preferring to allow Americans their constitutional right to choose for themselves.  However, he does support federal funding to states that allow government programs like Medicaid and State Children’s Health Insurance Program (SCHIP) to be used to purchase private insurance.  And, like his opponents, he also proposes tax credits for those families who purchase their own health insurance.

As a believer in free markets and private – not government - solutions to big problems, John McCain’s commitment to keeping government from further intrusion into the health care industry is aligned with my personal philosophy.  However, the entirety of his proposal isn’t a win-win solution either.  I’m concerned about his proposed elimination of tax-favored employer insurance and how that will affect my livelihood.

Given all of the excitement of the Presidential Primaries nearing a close, I set out to educate myself on the current stance on major issues of the final three Presidential hopefuls. There are those topics that are heated and very publicly debated and then there are those that quietly loom in the wings waiting for their opportunity to emerge. One of those in the wings is healthcare. As I reviewed the candidates ideas on the subject of healthcare, I was both encouraged and at the same time scared to death.

I am seeking the opinions of you, my friends in the employee benefits arena. How does it make you feel to know that:

• McCain proposes the elimination of tax favored employer insurance?
• Clinton would like to mandate that all Americans have healthcare?
• Obama wants employers to provide coverage or contribute to a new public plan?

Any thoughts or ideas on these subjects?

After the recent release of a few different healthcare surveys regarding Consumer Driven Health Plans (CDHP) and their “modest” impact on benefits cost trend, I have been fielding calls from benefit managers seeking my opinion on CDHPs. As a result, I thought it would be wise for me to blog some of my answers and observations on these topics.

• CDHPs and “High Deductible” health plans are not the same thing.
• Large or “jumbo” self insured employers have the most to gain (financially) by introducing a CDHP, but only if they entice or force a sizeable enrollment in the plan.
• A CDHP shifts costs from employer to employee by increasing deductible/out of pocket costs and making participants responsible for managing their healthcare purchases.
• When voluntarily offered, CDHPs typically attract the young and healthy.
• A CDHP all by itself does not improve the health of its participants.
• Plan design, wellness incentives, access to cost and outcome information and communication tools are “key” elements to a robust CDHP offering. 

 For small to mid-size employers:

• A CDHP with all the bells and whistles does not exist in a fully insured environment, although a few insurers have “modified” CDHP offerings with some tools.
• If your rates are “pooled” or “book rated”, there is no improved financial impact with insurance carriers for having a healthier or wiser population.

While this is not a comprehensive write up on CDHPs, I believe it answers some of the recurring questions I receive.