Zane Safrit

Make Disability Insurance an Employee Benefit: Week 39

I announced in May, 2010, the 52 - Week Employee Recognition Plan. This is the 39th week. The lesson this week is:

• Make disability insurance an employee benefit.

Tim Berry has offered great advice, resources, and more for a long, long, time (in blogging years) through his blog. I wandered away from reading it. And when I returned, I see his advice, resources and support for entrepreneurs and startups remains current, fresh, refreshing and unwavering.

Last March, he wrote I Don’t Sell Insurance, I Tell Business Stories. Interesting title, I thought. Being a bit passionate about affordable healthcare, especially about affordable healthcare for small business and their key stakeholders, I bit. Rather, I immediately read his post.

He wrote:

One day, one of our employees had a serious health problem requiring four to six weeks in the hospital. .... So one of the first things we did was make sure he knew we’d be paying him his salary until he got better.

Just about a month later, another of our employees had a heath problem requiring several weeks out of the office...So we told her not to worry, and paid her salary while she was out.

Shortly after that, somebody pointed out that if we were going to provide de-facto disability for our employees — which is exactly what we were doing — then it would be smart to buy disability insurance. As in a cartoon, you could see the light bulb appearing over our heads. Buying disability for our employees was the same as buying it for ourselves.

At the time I read his post, I was preparing this 52-week series on employee recognition. That work stopped immediately. His clarity and simplicity made me stop.

The beauty of that last sentence, Buying disability for our employees was the same as buying it for ourselves, is the beauty of employee recognition.

Disability insurance...is an affordable means to recognize the needs of your key stakeholders when those needs leave them most vulnerable.

Recognizing your employees is recognizing your business.

Recognizing your employees is the first step to recognizing all of your stakeholders.

Recognizing your employees in a way that is meaningful to them, their needs, when they and their needs are most pressing...is the most powerful way to show they and their needs are at the top of your priority list.

Disability insurance, in fact all of the steps on this 52-week journey, are investments in your most important asset, your key stakeholder: your employees. Let’s talk about the ROI of his investment in his key stakeholders.

• What kind of word-of-mouth within their company was shared?
• What kind of inspired leadership and service to each other and their customers was seen?
• What kind of trust and commitment was seen?

Here’s what Tim wrote:

It was about 10 or 12 years ago. Palo Alto Software was a small but rapidly growing company with 15 (or so) employees. My wife and I worked shoulder to shoulder with the others in a small office. It was a happy and hard-working group, with a lot of shared values. Those times produced a lot of good memories. We had no outside investors, though, which means no deep pockets. The money we spent was our own.

See? It was a happy and hard-working group, with a lot of shared values. Together, they produced a lot of good memories from creating a company small, but rapidly growing.

Companies with higher levels of engagement report faster revenue growth, higher profits, higher returns on equity, higher stock prices than their industry colleagues. The Corporate Lattice

I’m sure Tim and his wife and those in Palo Alto Software then took other steps to recognize and support each other. That’s the values they lived. They built a rapidly-growing company, where everyone was happy and hard-working, without outside investors...

Tim tells business stories. He tells them well. I think it's because he's a good writer, yes. But he creates good stories. That’s a great story, Palo Alto Software.

What story do you tell? What story you can tell is based on the stories you help create with your employees. The first step is to recognize them and their needs, when they need you and how they need you to recognize them.

**********

I announced in May, 2010, the 52 - Week Employee Recognition Plan. This is the 37 week of that plan.

You can start with any week and make that your first week.

You can take one of those weeks and turn it into a month or commit to an accelerated pace and complete 6 individual weeks in one month.

You can create your own week of employee recognition.

But do something to recognize your employees! They set your brand apart as your ultimate competitive edge. And the more you recognize their achievements, the more achievements you'll see and they'll enjoy, along with your customers and and shareholders, partners and vendors.

Invest in Their Health... Week 22 of 52-Week Employee Recognition Plan

I announced in May, 2010, the 52 - Week Employee Recognition Plan. This is the 22nd week. The lesson this week is:

Invest in their health.

Why wouldn’t you invest in your number one asset?

Why wouldn’t you invest in its upkeep, its maintenance, its repair, its need to reboot, the proper fuel, the adequate security, and operate at a pace consistently below red-line? You do that with your favorite car or your laptop, desktop.

If your business has a car, you buy insurance for it. You take it in for regular maintenance and repairs. You add the proper fuel, the best fuel. You keep the tires inflated. You protect it with alarms and park it inside your garage. You keep its RPMs below that red-line.

If your business has a computer, you buy support packages. You install the updates for operating systems and applications. You install the proper security. You train your other asset how to use this tool. You conduct diagnostic checks and security checks. You run scan disc and defragmenter...(You do these things, right?)

But for some reason...too many companies look at their most important asset, their employees, as a disposable, dispensable asset whose maintenance they choose to ignore, whose repairs they choose to forego and whose redlines are exceeded...all day, every day.

And then when that asset is burnt out and unproductive...well, these same businesses then blame the asset whose care and support they chose to forego.

It’s no wonder that ROA, return on assets, have fallen by over 75% for public companies since the mid-60’s. ( Link at Edge Perspectives. )

And maybe that's why only 11-24% of employees proactively help their organization towards its goals. *

Companies who ignore the health of their number one asset often see that their product quality declines, more customers are less happy, more employees are less motivated, fewer sales conversions are seen, their sales conversion rates decline,, more customer churn, more employee turnover...higher recruiting and training costs. And too often the choice is let’s hire a new marketing director or ad agency. Hurry up, too!

But what have they got to sell? A burned out shell of a company, one created by that same company ignoring the health of its number one asset. That's just like the burned out shell of your hard drive or the burned out engine of your car when you choose to forego their upkeep.

Now. There’s more to our health at work than the terms, accurately stated or not, of the current healthcare legislation.

• There’s the health that comes from training and motivation and building the right culture.
• There’s aligning incentives and purpose and tasks.
• There’s the emotionally healthy and simple act of saying thank you and encouraging that simple act to be a daily if not hourly habit.
• There’s recognizing the families of your employees and the sometimes unplanned needs of those families.

All of these are omitted from any health insurance or healthcare legislation. They do require the investment of your most precious resource: time. Time to listen. Time to care. Time to learn. Time to wait. Time to fail. Time to change.

But that investment is an investment in your number one asset: your people. Those people are your company, their company.

And that investment can turn that declining ROA into a resurging ROA. And that turns those assets again into people. The ones who create your, all of you’s, success.

**********

You can start with any week of the 52 - Week Employee Recognition Plan and make that your first week.

You can take one of those weeks and turn it into a month or commit to an accelerated pace and complete 6 of the weeks in one month.

You can create your own week of employee recognition. Share that journey here. Share it in your blog or Twitter or Facebook.

But, do something to recognize your employees! They set your brand apart as your ultimate competitive edge. And the more you recognize their achievements, the more achievements you'll see and they'll enjoy, along with your customers and and shareholders, partners and vendors.

* Brad Federman, author of Employee Engagement in his interview with Success Factors.

Healthcare Reform Benefit: Unlocking Job-Lock

 One, of the many, strangleholds on our economy from our current healthcare system, has been job-lock. Job-lock describes the inability of of an employee to freely leave a job because doing so will result in the loss of employee benefits.

Employer provided health insurance has grown to become the greatest, most coveted employee benefit as its monthly premium amounts continue to soar annually by 7-9% and as healthcare costs consume 16% of our wallets today and projected to reach 20+% in our near future.

Job-lock locks talented, enterprising, passionate, visionary employees in their current jobs. No one is locked in a job where they:

• are recognized for their accomplishments.
• have a path for career and personal growth.
• have the resources and mandate and support to pursue an idea or work with others already doing so. No one is locked in a job where their company continually invests in their education and training.

Think job-lock is a phantom issue?

Eric Brody on his blog, Healthy Conversations shared some recent research on employee engagement:

In a recent article on MarketingProfs, Gallup research of 300,000 businesses indicated that 75-80% of employees are achieving much less and feeling far less enthusiastic about their work than they could be.

How many employees would leave their job if their family’s health was not put at risk?

How many employees would leave their job if their family’s health was not put at risk AND they were able to find or create an opportunity where they were able to achieve more and generate more enthusiasm for their efforts?

How many companies have seen their growth stifled because they were unable to attract the talent they needed?

How many ideas remain dormant in the minds of employees locked in their jobs with companies uninterested.

How many jobs and opportunities have not been created as a result?

We’ll find out. We will all find out.

Healthcare Reform: Is it worth it for small business?

Sometime this weekend, I lost track, our House of Representatives, approved a landmark health care reform bill Saturday night by a 220-215 vote.

Many provisions in this bill are landmark. The one we’re talking about today is the provision that mandates all employees, with any and every business, receive health insurance benefits.

• What does that add to the costs of doing business?
• Are these costs, investments in a company’s number one asset: their employees, worth it?

Let’s look.

According to the Bureau of Labor Statistics, employee healthcare benefits comprised 10.9% of employee compensation costs per hour. This percentage is compiled as an aggregated percentage from all employers, regardless if they offer healthcare benefits or not.

The bill passed this weekend would mandate employers either provide coverage or pay a tax of 8% of these same employee compensation costs.

Maybe, my math is off. But 8% of employee labor costs sounds less expensive than 10.9% of labor costs.

Now, those companies who do not offer health insurance benefits will now face an increase in employee compensation costs. They will be required to either offer healthcare benefits themselves (for on average a 10.9% increase in employee compensation costs) or pay 8% of their employee compensation costs to a government run pool to provide insurance.

What percentage of a company’s revenues is comprised of the combined wages and benefits paid to their employees? It depends on the industry, according to BizStats. Let’s benchmark employee compensation costs (wages and benefits) at 20% of a company’ revenues.

Healthcare benefits increase total employee compensation costs (wages and benefits) by 10.9%.

So, what percentage of total revenues would these possible mandated benefits equal?

Let’s look:

Mandated costs: 8% (mandated health insurance pool contribution) of employee compensation costs

Employee compensation costs as percentage of revenues: 20% (average employee compensation costs as percentage of total revenues)

Mandated healthcare costs as percentage of revenues: = 1.6% of total revenues.( .08 x .20 = .016)

For 1.6% of total revenues for those employers who now do not provide healthcare benefits for their employees, we will receive:

Job-lock elimination. Job-lock is that phenomena where talented employees remain at large companies, underutilitized and unmotivated, because healthcare benefits are not available at small businesses.

Now small business can compete on a more level playing-field against large companies for the number one asset it needs to grow: human asset.

50% of personal bankruptcies eliminated. Over 50% of personal bankruptcies are attributable to catastrophic healthcare costs. The majority of these costs arise from the lack of health insurance. By providing health insurance to all employees we eliminate the source of 50% or more of personal bankruptcies and the costs passed on to business and their customers.

Lower health insurance premiums. As much as 10% of our current health insurance premiums are due to the healthcare costs incurred from those not insured.

Lower healthcare costs. Costs for standard hospital treatments for the uninsured are often as much as three times higher as compared to the cost of the same treatments for those with health insurance. Why? Because the uninsured have a three times greater rate of non-payment. It is reasonable to assume, though I doubt it will ever be discussed in polite company, that the standard costs for hospital treatments even for those with insurance reflect the debt incurred by the hospital from non-payment.

Greater productivity. Fewer days lost from employee illness. Now, with health insurance they can receive the care they need, when they need it and before it blossoms into a major healthcare crisis.

Imagine their greater focus when they’re not worrying about their child’s healthcare needs because those healthcare needs are affordable?

Added revenues. Remember those personal bankruptcy costs? You know those are the costs passed on to your business from the debts to you left unpaid in your customers’ personal bankruptcy. 50% of those costs would disappear. That would be reflected on your P&L statements as either increased revenues and cash-flows.

Employees. Remember that cool startup or small business? That’s the one you met with 5-6 times. They had a great culture. You believe in their purpose. They have so few meetings you could accomplish more and have more time for your family. Well, now they would have the healthcare benefits you can afford. Maybe, there would be some out-of-pocket expense for you. But the return on that would be a meaningful career again, a company where you love the people, and more time for your family. Think you’ll be more productive? Yeah, so do I.

Granted, there are nuances. Some are favorable, some are not. If a company's total employee compensation expense is lower than 20% of total revenue then the costs from mandated health insurance will be less than 1.6%.

Granted, the benefits of some of these health insurance plans may not equal the benefits of the gold-plated plans of years past. But, those benefits are not affordable to the majority of those who can enjoy private or employee-sponsored health insurance. And for those previously without health insurance, any health insurance is a step in the right direction.

But the biggest benefit I can see is that first one: elimination of job-lock. Health insurance not tied to your employer frees each of us to pursue the opportunities where we can contribute the most. And it frees smaller companies to compete for the talent they need to grow their business.

That is critical. Why? Small business is the driver for job creation. We have a jobless recovery right now. Job-lock plays a large role in the inability of small business to create the jobs we need to grow our economy out of this recession. Eliminate it (and make credit available to small business) and we have a job-generating small business segment, again.

So, for 1.6% of total revenues...on average for small business I see positive ROI from a variety of sources. Here's a few more.

And for no increase or even a savings for businesses now able to offer health insurance, I see I see mandated health insurance as a cost-saver.

That's a pretty good days work for Congress.

Granted, it is not a perfect bill. The NFIB or National Federation of Independent Business, has some very good points about how to improve this bill. But, we didn't create our healthcare system in a day or even in 10 months. And like any journey out of swamp, it begins with the first step and the same amount of time is required to get out.

Healthcare Reform: Do we receive the best value?

Ok. Today we still measure value in dollars. What will we have to pay in 2010 to receive the same value from our health insurance premiums?

According to this article in BusinessWeek, to receive the same quality of care in 2010..

• Businesses will pay 7% more
• Their employees will pay 10% more.

By businesses I mean those business which offer health insurance to their employees.

Obviously, their employees means those employees whose health insurance is offered as an employee benefit.

For businesses, this 7% increase is on top of the 149% increase in those costs since 2000.

Did they receive 149% more value...?

Perhaps, not. A recent poll published by Forbes ranks our country as the 11th healthiest in the world. Forbes, hardly a bastion of socialist pandering, ranked Iceland, Sweden and Finland, Germany, Switzerland, Australia, Denmark, Canada and Austria as healthier than us. You’ll note that each of these countries has a...wait for it...nationalized healthcare program.

Personally, the ideology of our healthcare system is irrelevant to me. Despite the noise of its proponents and their tactics, ideology is irrelevant. The data is important. Based on the data, which system delivers the greatest value?

Clearly, the data* shows our current system fails to deliver comparable value. This failure to deliver value only increases as you realize that our healthcare system absorbs 16% (and rising) of our GDP compared to 11.3% for Switzerland, 11% for France (France!), and 10% for Germany.

So, who gets the greatest value for our current healthcare system and its strangulation of our economy? Not us, the customers.

* Kaiser Family Foundation report in PDF.

Healthcare Reform: What about the children?

I believe the children are our future
Teach them well
And let them lead the way
Show them all the beauty
They possess inside

Whitney Houston wrote and sang this in The Greatest Love of All.

The lyrics came to mind as I read this statistic:

Uninsured children are 60% more likely to die in the hospital than insured children regardless of medical condition, according to a large-scale study by researchers at Johns Hopkins University. Modern Healthcare (registration and annoying Dell popups req'd.)

Regardless of medical condition. That phrase caught my attention. All things being equal (same gender, age, condition, stage of diagnosis), the child with no health insurance coverage has a 60% greater risk of dying IN the hospital than their counterpart whose parents can afford health insurance.

Maybe that statistic rings...abstract. Maybe it does not connect. Here's where that statistic starts to apply: Lack of health insurance may have contributed to nearly 17,000 deaths among hospitalized children nationwide in the past 20 years...

17,000...in 20 years...That's 850 children per year, nationwide. 17 children per year, per state. 17 children per year, per state, for over 20 years died because their parents could not afford health insurance.

17,000 sets of dreams and skills, talents and strengths, lost.

17,000 families...devastated with the loss of a child.

17,000 parents being forced to bury their child.

And all because...what? Profit? Stock prices? Shareholder concerns? Quarterly results? CEO bonus plans? Companies too small to afford health insurance for their employees, too small to pay the wages necessary to provide health insurance for their employees and their families?

Sadly, the conversation on healthcare reform centers around costs. The costs are measured in...dollars.

What if we changed that term to lives?

What if we measured the costs of our current system, and any reforms, by the lives it saved? Or did not.

What if we discussed healthcare reform in terms of the lives saved, and the families, the dreams, the contributions with those saved lives...to our communities?

Would that make a difference? 

* Photo credit: istockphoto, pixdeluxe

Small Business Already Taxed for Healthcare (or its lack)

And their employees get nothing.

Opponents of healthcare reform, coincidentally those with health insurance, often cite its impact on small business. In particular, healthcare reform opponents cite the provision that small businesses, all businesses, be mandated to provide health insurance for their employees. They costs will be draconian, it's claimed.

Putting aside the inconsistent logic that investing in the health, care and maintenance, of your number one asset is unproductive...let’s look at the current draconian taxes already forced on small business by our current healthcare system.

Bankruptcy costs. 50% of personal bankruptcies are caused by catastrophic healthcare costs. Catastrophic means...their recipient cannot afford them. Their catastrophe arrives from many sources:

1. No health insurance
2. Inadequate health insurance
3. Rejected health insurance claims
4. Delayed healthcare. Like delayed justice, delayed healthcare is no healthcare. A chronic health issue ignored over time becomes a catastrophic healthcare cost. No one chooses to ignore their healthcare. We ignore our healthcare because we cannot afford to pay attention to our healthcare or that of our children.

This number, 50%, only continues to rise as the costs of healthcare grows faster than wages and inflation.

Why does this matter? Debt waived in a personal bankruptcy only disappears from the balance sheet of the bankrupt. It’s passed on to their creditors, who then pass it on to their consumers in the form of higher costs. So, first the bankruptcy debt is absorbed by the business. Then business, in turn, passes on those costs to we, the consumer, in the form of higher prices.

How much is all of this? Let’s look at the math:

* Average amount of debt by those filing for personal bankruptcy was 1.5 times their annual income in 1997. Bankrupcty Action
* Average personal income in 2006 was $36,000. Link
* Number of filings in 2009. 1.251 million non-business bankruptcies were recorded in 2009 (june 2008 to june 2009) US Administrative Court Filings
* Total Cost of Bankruptcies Caused from Catastrophic Healthcare Costs? $33,777,000,000.

(1.5 x 36,000 x 1.251 million = (drum roll, please) $67,554,000,000 and then 50% of this = $33,777,000,000.)

For $33,777,000,000, small business and its employees receive:

* No health insurance, no or inadequate healthcare for its employees.

Job-lock Job-lock is the term used to describe employees locked in their current job. They are locked in their current job for the healthcare benefits the bigger company offers and the small business cannot afford to offer.

What’s this cost to a small business? Quantifying this cost to small business and our economy is difficult. But, did you notice the news that this economic recovery is a job-less recovery. And did you notice that small business remains the top source for layoffs?

Without the talent needed to provide leadership, ideas, skills and strengths, to find solutions, to attract more talent of the same caliber increases the likelihood that both scenarios remain. Why? Small business is unable to provide the healthcare benefit needed to lure the talent necessary to drive their business and create jobs.

Lost productivity. This will come in several forms:

• More sick days
• More employees sick
• More time off to take care of families
• More distractions in the workforce. As more of your employees must spend their resources to deal with the lack of affordable healthcare...you lose their productivity from their lack of focus, from their time spent on the phone with family members and doctors, etc.

Lost employees. See job-lock. This is the flip-side. Your talented employees will leave to find the healthcare benefits you cannot afford.

Like most of our healthcare system, the true costs are hidden or disconnected from their impact, their provider and the recipient.

Small business is already taxed with the costs of providing for our current healthcare system. The difference is there are no benefits received by small business and its employees for these taxes, these costs.

Lucky for her! She can afford her healthcare

Rep. Sue Myrick of North Carolina issued the latest warning against a Democratic-backed health care overhaul as she recalled her fight with breast cancer. She said in the GOP's weekly radio and Internet address that her diagnosis "took six doctors, three mammograms and one ultrasound before they finally they found my cancer. GOP Lawmaker Warns Against Healthcare Changes, USAToday.

Lucky for her! Her employer offered her the time from her work to meet with those six doctors, [ and undergo] three mammograms and one ultrasound before they finally they found [her] cancer.

Lucky for her! She could find six doctors, who would conduct three mammograms and one ultrasound before they finally they found [her] cancer.

Lucky for her! She was employed by a company, US Congress, who offered an affordable healthcare coverage and insurance.

Lucky for her! She didn't have to then choose to either forgo her treatments or choose bankruptcy.

Lucky for her! She didn't have to file for personal bankruptcy from these medical expenses needed to save her life. 50+% of all personal bankruptcies are filed as a result of catastrophic healthcare expenses that...Rep. Myrick, R-NC, did not have to pay. Her health insurance company paid.

Lucky for her! As a member a member of Congress for 14 years, now serving her 8th term her health insurance and healthcare were provided at our expense: taxpayer money.

Lucky for her. She enjoyed a government healthcare plan, the healthcare plan enjoyed by members of Congress.

Mandated Investment in Your Most Important Asset?

When did our business community reach the point where we need to be told to invest in the assets of our business?

When did we need a legal mandate, essentially a parent, to force the good business practice of investing in the upkeep, the enhancements, of a corporate asset?

Have we reached the extreme end of this pendulum swing where assets are churned, as customer accounts are?

There’s no mandate required to change the oil in the cars of their fleets. Businesses are thought smart when they buy extended warranties or online support to maintain the upkeep and care of their equipment. Companies regularly consider it a smart decision to purchase insurance on their office assets (computers, desks, furniture). There’s no mandate required to invest in the current technology to remain competitive. There’s no need for any regulatory body to issue laws requiring businesses to protect their intellectual property.

But when it comes to investing in their number one asset, well, all those rules of the obvious kind are just thrown out the window.

That number one asset for a company is the human asset. That’s the asset that differentiates a brand. That’s the asset that delivers the brand. That’s the asset that makes all other assets valuable. Take the same non-human asset of a company and bring in a different group of human assets and you’ll see a completely different level of efficiency, of customer loyalty, of market share gain (or loss) or word-of-mouth and customer evangelism.

And yet, the idea of investing in this asset in the same way you invest in the upkeep of a front-end loader is considered...what...socialist...or handled with the response of ‘no one’s going to tell me how to run my company’. Well, no one would have to tell you how to run your company if you treated your human assets with the same care as you treated your inanimate assets.

Yes. I’m talking about investing in the healthcare of your employees.

Tell me, please,:

•  how you expect to grow a business with unhealthy employees?
• which adds greater sustainable value to your company, a health employee or an ad agency?
• what better way to recruit top talent than by word of mouth initiated by your employees?
• what better way to generate high levels of engagement and loyalty and commitment, inspiring your employees to become volunteers with that same level of passion and commitment that volunteers bring to a purpose...than to invest in the care for their health and that of their family.

Do you know how many hours an average employee spends on personal healthcare issues while at work?

Buddy, that’s downtime for your business. Pretending it doesn’t exist by not investing in a solution with them is the same as pounding your head on the wall and pretending it doesn’t hurt.

There’s a name for that kind of behavior. It’s called denial. Usually, angry denial. And it’s seen in adults who constantly seek to blame others (the employees, the federal government, the competition...somebody) and use ideological terms to mask the truly absurd proposition that you can ignore an asset’s upkeep and still expect it’s top performance.

It’s a company’s responsibility to its shareholders as well as stakeholders to maximize the value of their assets. And that requires constant investments in those assets that generate the highest return. ROA.

Why do so many companies then choose to ignore their most important, most valuable asset?

Talk, instead, turns to why should they be forced to do make the right business decision. The terms fall into the realm of ideology and dogma. Those are always so useful.

And you’re right. No one should be forced to invest in their most important asset. No one should need to force you to do that. ( You know. The logic is like that with smokers and laws prohibiting smoking. It's my right...they claim. Uh-huh. No one should need to tell you to not or to stop smoking. It's kinda obvious. )

Sure, it’s expensive to invest in your employees' training and health. But like all good leaders and managers you make choices. Which investment in which asset generates the highest? Which doesn’t? Stop the latter. Expand the former.

Do you really think your investment in...any other asset generates the rate of return as an investment in the health of your employees? Show me.

If you’re thinking of the healthcare expenses for the union employees with the former Big Three automakers, think again. Back in the day, when they made models people wanted, their corporate leader bragged that their workers were the most productive in the world.

Then they continued to make big engine trucks and Suvs while the market repeatedly told them they wanted. Employees were still the most productive. But they were productive making the cars no one wanted. It wasn't their healthcare costs. It was the products they were told to make.

Yes, it’s the responsibility for each of us to maintain our health. We are not a valuable asset to anyone, company or community or family, as we fail to invest in our health. Denial in us is as ugly and absurd as it is in corporate leaders. And as unproductive.

It’s kinda like children and vegetables. Children don’t like to eat vegetables.

Sure, it’s expensive. Vegetables and fruit are more expensive than soda and fast food. That is until you tally up the lost wages from chronic health problems caused by obesity or the inability to learn with children unable to focus after a rush of sugar and starch.

On the other hand, what are the options? Don’t eat vegetables and eventually become unhealthy, unproductive, unhappy, unnecessary?

Don’t invest in your employees and eventually see your brand become unhealthy, uncompetitive, unhappy and irrelevant?

Children complain about eating their vegetables because we haven’t educated them to the value of a healthy diet. We're the adults for our children and in our companies. We shouldn't need a parent at our work to tell us to do the right thing when there's so much logic and data to support doing it.

This issue of mandated health insurance for all companies is a false flag. The issue is why we need someone, a parent in the form of the federal government, to mandate we do what’s best for our business. We, the most competitive nation in the world, have forgot how to compete in the global marketplace. It starts with a healthy well-trained workforce. It stops there, too.

Be creative. God gave all of us a brain. That's a faith-based assumption. But I'm sure of it. Though data in our business leaders leads me to doubt my faith on this point.

Find a way to take care of your employees’ health. Health insurance is but one element. That's an expense that gets higher as you ignore the health of yourself and your employees.

Don’t first refuse to invest in your most important asset, your employees, and then complain at not having a healthy company. Or pout that someone makes you do that. Did your mom ever let you pout? No, otherwise, you'd never have grown up. So buck up and do the right thing. Invest in the care and training and motivation of your most important asset: your human asset, those who make the other assets and your brand, their brand, a great brand.

Healthcare Reform Debate: Value vs Values

I'm enjoying The Leader's Guide to Storytelling: Mastering the Art and Discipline of Business Narrative. A wonderful book written by a wonderful person. It's one of those rare business books that continue to improve as you read.

And recently I came across this passage. It's lengthy. But, it's important to consider in light of our healthcare reform debate.

Douglas Smith, in On Value and Values, suggests that...society has lost sight of the importance of 'values' and instead pursued 'value': "Value arises in conversations about economics, finance, shopping, investment, business, and markets. People worry about getting value for money or shareholder value or market value. The use value to describe business or economic prospects. Value connotes a pointed estimation of current or anticipated worth never too distant from monetary equivalence. There is no value that is not a dollar value.

Smith notes that the meaning of the plural values is something very different from the singular value. "Values are estimations not of worth but of worthwhileness. Unlike value, talk of values ignores money; it opines on timeless appraisals instead of transient ones. There is a deep backward- and forward-looking quality to values. If value is what makes us wealthy, values we assume and regularly assert, are what make us human.

Now, our culture has become obsessed with the single overriding value of winning.

As the screaming and shouting gets louder in the name of a healthcare reform debate, the ability to look backward or forward even superficially to stands taken but a few months ago become impossible. What's lost in these dreadful escalations of rhetoric (I'm being generous) is our ability to converse from a common appraisal of our shared values as a nation, as a people, as families and neighbors, co-workers and fellow citizens. Our culture's obsession over winning at any cost manifests itself as a collective and growing memory-loss of what we share in common with each other, those values that make us...human.

Data Worsens with Personal Bankruptcies, Healthcare and Health Insurance

* 50% Illness and medical bills caused half of the 1,458,000 personal bankruptcies in 2001, according to a study published by the journal Health Affairs.

* 2,000,000  2 million of our friends, family members, colleagues, neighbors...are affected by these personal bankruptcies caused by healthcare expenses.

* 56% of those filing bankruptcy for healthcare costs owned a home.

* 30% of those filing bankruptcy for healthcare costs had their utilities cut off.

* 61% went without needed medical care.

* $13,000 The amount of uncovered medical bills at the start of an illness by those with health insurance.

* $35,000+ The average medical debts for those with cancer.

The statistics above were reported in 2005 from a study conducted by jointly by Harvard's Medical School and Law School and published in Health Affairs. The article Medical Bills Leading Cause of Bankruptcy, Study Finds was published in Consumer Affairs in February, 2005. 

And this data inspired the leaders of  the best healthcare system in the world to improve since then, right?

Wrong.

Medical problems caused 62% of all personal bankruptcies filed in the U.S. in 2007, according to a study by Harvard researchers. And in a finding that surprised even the researchers, 78% of those filers had medical insurance at the start of their illness, including 60.3% who had private coverage, not Medicare or Medicaid.- BusinessWeek, June 2009

Wrong, again.

A new study published in the American Journal of Medicine has found that bankruptcies due to medical debt rose 50 percent from 2001 to 2007.- Health Related Bankruptcies Up 50%

I want to see the costs of these personal bankruptcies to business.  The costs to business would be in lost productivity and lost revenues. And compare them then to the costs of health insurance for their currently uninsured employees.

I would love to see the costs of these personal bankruptcies compared to the costs of social programs with medicare, medicaid, Schip, healthcare clinics, that compensate for the lack of affordable and complete health insurance.

 I'll bet my senator Chuck Grassley and Nancy Pelosi, both, a year's supply of one daily latte at Starbucks that universal, single-payer, healthcare that covers all healthcare expenses will prove ultimately more affordable.

Note: I choose Starbucks for he convenience of their gift-card So, Senator Grassley or Speaker Pelosi, if you can present data that shows the costs to our economy and our federal budget is less from the current system where 62+% of all personal bankruptcies arise from the uncovered costs of medical care (even when 78% of those filing for personal bankruptcy as a result of uncovered medical expenses had health insurance) I'll buy each of you one latte each day for 365 days. ( That's a small latte.)

And you can drink that latte and continue with our current healthcare system.

But if you can't (and you won't), then you have two options:

1. Buy me and every American the same.
2. Do the right thing. Honor your oath to us. Work together to devise a healthcare system that delivers the same level of care you receive as a member of Congress...without risk of personal bankruptcy.

Free PDF: Healthcare Reform: It's our debate, too

Download Healthcare_ebook_FA5

Have you noticed, we the consumers, are not invited to the healthcare reform debate? Those debating changes to our healthcare system and the same ones who created it. They also are the same ones with vested interests in the current system.

We can reform our healthcare system. We have to participate in its debate. We have to offer our ideas. Our ideas to reform our healthcare system. Otherwise, it remains...their healthcare system.

This is a first-step. It's only a first-step.  It's not the only one. Take this step here. Or find a place to take a step, your step. And make this healthcare reform debate, our debate, too.

Wal-mart and the SEIU Now Support Employer Health Insurance Mandate

A crisis can create strange bedfellows. Among the strangest bedfellows to-date in the healthcare reform discussion are Wal-Mart and SEIU, Service Employees International Union and their interest in solving our healthcare crisis.

They first announced their partnership in 2007 in a coalition they titled Better Healthcare Together. According to this Medical News Today article dated Feb. 12, 2007... The purpose of the coalition -- called Better Health Care Together -- is to end the nation's reliance on employer-backed health insurance and develop a system for providing universal low-cost coverage within five years.

So, when they say Better Healthcare Together...what they mean is...we're all in this together as long as someone other than we, the employer, and we, the union, pays for it.

This IS the same Wal-mart known for paying its employees so poorly that many were forced to seek healthcare for their families from free and public resources. Right? Well. Yes.

And three years ago, Wal-mart fought the efforts of states like Maryland who sought to require large global brands to offer health insurance to their employees. (  Ah...but they were young, then.  )

And this is the same Wal-mart who has more employees than any other business in the world, right? So an employer-sponsored mandate would be, could be, expensive for them, right?

Right.

And this is the SEIU, Service Employees International Union, with more than 1 million members whose interests are protected with the help of their member dues paid to the SEIU. Right?

Right.

Jump forward to last week. Now,  these two young, healthcare-for-all-as-long-as-everyone-else-pays-for-it lovers...decided that, um, you know, about that employer-backed health insurance thing....um, we've rethought that and we now support an employer health insurance mandate. ( Oh, crazy love....)

 CAP, Wal-Mart and SEIU Join Forces in Support of Employer-Mandate.

The Center for American Progress, the Service Employees International Union, and Wal-Mart joined forces today to release a letter (PDF) endorsing the dual ideas of an employer mandate to provide health insurance and “triggers” to automatically reduce costs if health care spending gets too high...

( Question: Is today's healthcare spending not high enough? )

I couldn't understand why Wal-Mart would endorse this potentially huge expense until I read some of the comments:
Maybe Wal-Mart thinks it will be in a better position than their smaller competitors to comply with an employer mandate, thus providing it with a competitive advantage.

With 2 million employees...Wal-Mart would be able to create its own health insurance company and save the current exorbitant adminstative costs of current health insurance providers passed on through premiums to their customers.

Coincidentally, this initiative in support of mandated employer-sponsored health insurance comes a week before President Obama said this:

Here's the problem, is that the way our health care system evolved in the United States, it evolved based on employers providing health insurance to their employees through private insurers.  And so that's still the way that the vast majority of you get your insurance.  And for us to transition completely from an employer-based system of private insurance to a single-payer system could be hugely disruptive.  And my attitude has been that we should be able to find a way to create a uniquely American solution to this problem that controls costs but preserves the innovation that is introduced in part with a free market system.

Notes:

Disruptive. Yes, it would be disruptive. But, the dysfunction of not only our healthcare industry, in particular our health insurance industry, is far more disruptive.

Innovations in a free-market system. Clearly, if our health insurance industry operated in a free-market system, we would have innovations arising that:

• would help drive down current health insurance costs, 
• improve levels of service
• make obvious the mockery of the 'threat' of competition from the federal government,
• result in indictments for the health insurance industry when they offer to collude together to lower their costs.  That means they're colluding together now to keep their costs high and competition from innovators low.

SUMMARY:

Ultimately, we'll pay. We, the voters. Or we, the consumers. Or, we the employees. We'll pay.

Right now, we already are.

We pay in higher health insurance costs passed on to those who can afford it, in higher healthcare costs to compensate providers for the costs of those unable to pay, in lower productivity, in lower competitive resources to compete globally.
We pay in constant worry and fear of a healthcare crisis.
We pay for the bankruptcies spawned by healthcare crisis of those with inadequate health insurance or no health insurance.
We pay in lost innovations when talented employees remain in unproductive jobs with companies who can afford to pay their health insurance costs.

Can the rest of us listen to each other, to find our own common ground. If not, we're left to take solutions dictated to us from either Wal-Mart, Unions, or Congress...and not the other way around.  This other way around, voters and/or consumer dictating their desires, is how both a democracy and a free-market would work.

Links:

Kaiser Health News. Wal-Mart backs employer-sponsored health insurance mandate.

Kaiser Health News. Transcript of President Obama's recent town hall meeting.

Oxdown Gazette (Firedog Lake blog) President Obama takes a question about single-payer universal healthcare.

Medical News Today.

Matt Yglesias at Think Progress

Investing in the #1 outcome: healthier employees

Workforce Management offers wealth of useful tips and articles to help you with...workforce management. Here's their most recent useful offering Paying for Healthier Employees, not Just Health Care.

The article goes on to list some changing business models in the employer-sponsored healthcare market that are favorable to employers, employees, their families and even healthcare providers. The new dynamic is paying for outcomes.

Digression: Don't you laugh when you read that the healthcare industry consider paying for outcomes a new business model? It's a dark laughter. But, only our healthcare industry could judge paying for outcomes as an innovative idea. I can't think of another industry that doesn't understand and embrace the idea that their customers pay them for...a positive outcome from the use of their products or services.

Still, better late than never.

And as expected this change did not arise from within the healthcare industry. It arose from...their customers. Businesses who see investing in their employees' health as a top priority.

Pioneered by employers, these contracts are helping to refocus the culture of health care so that instead of paying for a service, employers pay to improve a person’s health.While overall costs may not go down, these kinds of guarantees mean employers will be spending their health care dollars more effectively. Rather than paying for health care services, employers will be paying vendors only if they can show they’ve improved the health of employees.

That last sentence says it all: 

Rather than paying for health care services, employers will be paying vendors only if they can show they’ve improved the health of employees.

The article profiles two examples of outcome dependent programs that deal with heart attacks and asthma attacks. There are penalties to the healthcare provider if what they provided did not delivered the desired outcome. In these cases, the desired outcome was the avoidance of either, a heart attack or an asthma attack that resulted in an emergency room visit.

There is hope. 

Hat tip to Susan Poirier, CEO of Ace Concierge, for the link.

Your Choice: Employee’s Healthcare or Advertising

Which investment in either will yield the highest ROI, the most sustainable brand with the most cash-flow positive business model, for a brand.

All things being equal?

Too many companies, big or small or startup, face these choices. You may face them now at your company. Lucky are you if you don’t.

Which one? Which investment here, employee’s healthcare or advertising, will generate the highest ROI for your brand, your company?

I’ll post my thoughts next week. But, first I wanted to hear yours.

Healthcare costs choke small business

I’m confused. Help me understand.

Supporters of our current healthcare system tout its free-market basis.  That, that claim, in itself makes our system better than the others. Better means more efficient, more effective. We deliver better care at lower costs. Thats what a superior business model accomplishes in a free-market system, right?

Yet, the threat of competition from a 2nd option offered by our very inefficient, very bureaucratic, federal government terrifies the major brands and industries who comprise our healthcare system. I’m from the federal government and I’m here to help is a terrifying competitive threat to their current business model.

Small businesses are the engine of job growth in our economy. The major source of layoffs have come from major brands whose products and services are no longer desired. Small companies arise from innovative solutions being brought to market that meet the current needs of consumers. Thus, jobs are created in these small businesses.

Small businesses are the least able to afford health insurance as a company benefit for their employees. The health insurance industry has a pricing model that eliminates small business as a customer for the group plans offered by health insurance companies.

Small businesses as a result find it more difficult to attract the talent needed to grow their business. Small businesses then can’t grow and create more jobs to replace those eliminated at the large unresponsive national, global, brands.

Healthcare costs then choke the very system, the free-market, capitalist, system whose principles the healthcare providers claim to embody. At least according to it supporters and their ideological zealotry.

So, when CNN reports that healthcare costs choke small business then what it really says is healthcare costs choke our economy.

Is that right? Is that what I understand?

Here's why affordable healthcare is an economics issue

WASHINGTON (Reuters) - Countless workers in the United States are trapped in jobs they would like to leave because they cannot get health insurance elsewhere, calcifying innovation and mobility in the world's largest economy. Reuters.

This effect is also called job-lock. Talented employees are in-effect held captive at large corporate employers. Their talents, dreams, conversations, leadership, ideas, innovations, purpose and passion, locked-away in a job that engages only a small percent of their talent, skills and strengths.

The result is what we see today, an inability to allow free-market principles to be applied in the most important marketplace. The market place for ideas and the human talent to bring them to market with new, dynamic, startups.

Fix this with affordable health care independent of your employer and the stimulus funding becomes unnecessary, the recession happens but with less devastation and the new companies and the jobs they create quickly replace the old dinosaur industries whose ideas and models have become...antiquated, uninteresting, unproductive.

Health Insurance Industry: Purpose-Mission-Vision

I’ve indulged yet again in picking fruit from the low hanging limbs. I ranted again about the health insurance industry. 

But, that rant did serve a purpose. It got me to thinking about them, their problem, their challenge.

What if I were in their shoes, right now?
What if I faced:

•  an unhappy customer base (I’d created),
• a dysfunctional infrastructure system which I dominated (whose dysfunction I played a central role creating and benefited greatly from..)
• a Congress who was now up in our business, wanting to be an equal partner?

 What would I do? What would I do to refocus our efforts?

My first step here is to visit with Haley Rushing at the Purpose Institute. I listened to her at UFT, User Friendly Thinking, Radio hosted by Paul Chaney on BlogTalk Radio. Then I watched her performance at SWOMFest last year.

For her, purpose for a company comes from answers to questions like:

• what’s our goal?
• what’s the sum of all of our business functional parts, that’s more than just making money?
• Would anyone miss us if we’re gone? Why?
• What is it we do or could do better than anyone else?

And she'd start first with employees and management. They're the ones whose answers determine a brand experience, the purpose communicated in a way that's meaningful to their customers.

Then she'd go to the customers and ask them some of these same questions.

Well, I'm a customer.

And after listening to her...here’s my effort at redesigning the Purpose-Mission-Vision of the health insurance industry: 

Purpose: H-squared. Bringing Health to the individual, then to the Nation.Create a healthy nation from creating healthy individuals.

Mission:

The 7% plan.

• Reduce our operating expenses by 7%.
• Increase membership #s by 7% per year. 
• Grow revenues by 7%.

Use IT resources to streamline payment handling:

• Receiving payments from members, customers (me),
• Sending payments to doctors, hospitals, clinics (healthcare providers)

Use Net Promoter Score 

Gather actionable data from customers (members, doctors and hospitals) describing their experiences in their own words.

Use NPS to measure progress.

Use NPS to engage in a broader discussion with your customers to find solutions for :

• how to cut costs
• how to add services
• how to add revenues
  • existing customers
  • new customers
• build loyalty with your customers

Talk about a potentially great story. One of the industries with the lowest customer satisfaction scores using any metric....you turn it around to be one with the highest Net Promoter Scores measuring customer loyalty, passion and willingness to promote a brand. And in so doing, improve productivity in America, unleash more consumer spending on products, ideas, that enhance our economy. THAT's a story worth telling.

Work with small business. Design plans to bring their employees under the umbrella of insured healthcare. That's a huge market potential for reaching this Purpose.

Social media. Of course. Use it. You now have a story to share and one your customers will want to share. Make it easy for them. You'll note I listed this option last. A social media program ALWAYS starts with creating a story worth sharing, a story that's sustaining, that's adding meaning to people's lives and then, only then, do you throw social media resources at it.

Vision: Every US resident able to afford healthcare with a free-market based system. Enable a healthy nation to build a healthy economy.

My results here are incomplete. They're not intended to be complete. I share this to:

• further the conversation about finding healthcare solutions.
• further this conversation in a constructive manner.
• open our eyes to a what-if scenario. What if the health insurance industry looked at their role in this light?
• use a concrete example with an industry that needs an urgent brand, strategy, business-model overhaul, for them and most importantly for us.
• showcase Haley Rushing's perspective on branding. If you have a chance to see her, do. She's clear, approachable, articulate, engaging, enthusiastic and what she does works. 

I realize I've missed some nuances of Haley's perspective and lots of details on the health insurance industry. Provide them here or somewhere. We need solutions to the latter and education on the former.

THE Solution for Affordable Small Business Healthcare

BAM!

The simplicity of the solution is so obvious:

Big Cos, if you want my business, solve my number one problem: affordable health care programs for my employees and my clients' employees.

You know. Like the ones you offer to your employees. Like the ones we can't afford for ours.

Not because our employees' health is any different...but because the health insurance companies structure each group plan as its own profit-center. So, claims are judged against the stream of revenues from members' premiums.

That health insurance companies favor their big brethren with this huge competitive advantage doesn't go unnoticed except for its role in creating job-lock. Job-lock is where talented employees remain locked(-down), underutilized and uninspired, at their current jobs solely for the healthcare benefits provided them and their family. Their talents in creating value and adding jobs goes wasted there.

Whereas, at a growing company, their talents and passions would be better utilized in building a company...and creating the jobs needed to finish building towards that vision.

NOTE: This is maybe the best benefit of a social media tool like twitter. The conversation. The ideas shared. And the ability to connect with people like LaurieMcCabe who share them freely.

1.6 Million Jobs Wiped Out with Mandated Healthcare?

The National Federation of Independent Business reported the results of a study of the impact of mandated healthcare on our economy, GDP and employment levels.

The study conducted business simulations to measure the effects of a hypothetical national mandate requiring employers to offer private health insurance to all employees starting in 2009, and to finance a minimum of 50 percent of the cost.

Simulation results

• Of the more than 1.6 million jobs lost between 2009 and 2013, small businesses would account for more than 1 million, 66 percent, of all jobs lost.
• U.S. real GDP would contract by approximately $200 billion between 2009 and 2013.
• Small businesses would lose roughly $113 billion in real output and account for 56 percent of all real output lost.

Huh. Interesting. I'm going to have to look closer at these results. I'm not an economist ( but I did see this recession coming...).

Nothing should be done to negatively impact small business and their ability to create jobs. Small business is the driver of job creation in our economy. Roughly, 60% of new jobs created during a healthy, growing economy arise from small business and startups. That number balloons to nearly 100% in a recession.

However, I'm not sure the study included this data:

JOBLOCK. One of the biggest obstacles to small business growth is their inability to offer affordable healthcare benefits for their employees.

And, the loss of of their existing healthcare benefits for themselves, and their families, is one of the biggest impediments to talented employees choosing to join a small growing company where they can make a contribution.

This is referred to as joblock. Large corporations lock their talented employees into their current jobs, where their talents go underutilized in creating added value for the company or its stakeholders (employees, customers, vendors, partners). The company invests less and less in their training and motivation, and as a result the company stagnates. And job lock is a key reason why talented employees remain, stagnating. 

And as we see now, this business model soon dies with the resulting need to...layoff that talented employee and millions of their colleagues across the nation. And now the employee, and millions of their colleagues, not only has no health insurance for themselves and their family...they have no income either.

However, if small companies were able to offer a similar level of healthcare benefits for their employees and families would it spur talented employees, stagnating at large brands, to leave to join innovative startups and small businesses where their contribution would be greater. The result would be growth for them, growth for their company and the resulting job creation.

LOWER PERCENTAGE OF GDP

I'm not sure if the study factored in the impact on GDP growth if healthcare costs, particularly health insurance, makes up a lower percentage of our household budgets and our national GDP. If that's the case, then that results in more disposable income to drive our consumer-based economy. If more employees and their families had access to affordable healthcare then these employees could invest in preventative care. Preventative care is widely recognized as a cost-effective alternative to treating a developed disease or preventing the development of chronic conditions.

Right now, roughly $90 per month is added to health insurance premiums of families in Indiana to pay for the healthcare needs of those without health insurance. What if every family had an extra $90 per month to spend? Not much. But for...1 million families...that's $90 million... per month available in disposable income. $1.8 billion per year. For one state. Approximately $90 billion per year nationwide.

A HEALTHY NATION IS A PRODUCTIVE NATION.

Or did the study factor in a healthier nation is a more productive nation? Healthcare delayed is healthcare denied. Eventually, that means the employee and their families are distracted 100% from their work to instead take care of their health or that of their family members. What's the loss to our economy now and by 2012 when uninsured families have delayed their healthcare for 3-4 years....?

DECREASE IN PERSONAL BANKRUPTCIES.

Or did the study report the impact on our economy from nearly 50% of personal bankruptcies arise from healthcare crisis. The costs of those debts wiped out are passed on to all consumers in the form of hidden costs.

What if we wiped out the source of 50% of all personal bankruptcies?

How would that effect our GDP?

How would that effect corporate cash-flows and their ability to invest in creating more jobs if the source of 50% of personal bankruptcies was eliminated?

INNOVATIVE SOLUTIONS

But there are cost-effective alternatives that can raise the level of care and lower the costs to small business. I blogged about 1 of them last week. A company called Qliance can lower employee healthcare costs for companies by 42% and double or triple the level of care for their employees.

I realize NFIB advocates for small business. And the study at NFIB is a great, great start. And this blog post doesn't begin to compare numbers of costs or return for providing healthcare for all employees, regardless of the size of the company where they work.

And I realize the costs of affordable healthcare with affordable health insurance or its lack ripples through our economy. And, so would the results.

We want to make sure our research not only highlights the problems, but encompasses all the problems' sources. That will allow us to look for solutions in ways and areas not tied to our existing and failing healthcare system.

Tip of the hat to Jeffrey Summers on twitter for NFIB link.