Blog Articles And Comments

The Department of Labor tells us they are overwhelmed, understaffed and shifting additional burden to employers for employment law compliance. This can be a great deal for the average employer to undertake.  HRS has taken some time to prepare a quick “how to” blueprint for employers.

P3, also called “Plan/Prevent/Protect” or “P Cubed,” will require every entity covered by the FLSA, OSHA, OFCCP, and MSHA to make written plans ("Plan"), create processes ("Prevent"), and test the processes with designated compliance employees ("Protect").

The following guidelines create a simplified and sustainable P3 protocol:

1. Stay On Top of Changing Laws.

Review not only government postings, but also secure a 3rd party compliance expert as needed and for annual overview.  Our “overwhelmed” government states outright there is no government responsibility to educate employers.  Enforcement is their responsibility, however, and fundraising is high.  Case precedent law is just as impactful here as statutory law.  While it is necessary to be a member of the Bar to litigate or serve as “officer of the court,” it is not necessary to be a member of the Bar to be a legal compliance expert.  Full-time research commitment is essential for such expertise. 

2. Avoid Copycat or Adaptation of Other Employers’ Handbooks.

Beyond the immediate intellectual property law threats, other employers are not recognized as experts.  “Because Company X Did It” is not a reasonable defense. There are some terribly non-compliant practices circulating out there like “old wives’ tales.” Even policies that actually work for one company may not work for yours.

3. Build Legal Arguments from Day One.

Maintain records to prove either experts consulted on or approved your policies… or if self-constructed… save expert resources and statutory evidence as future “reasonable care” affirmative defense.  Use scenario planning to create and document activities which defend the company against complaint. “Willful violations” pose the greatest threat.  Negligence and lack of attention can be considered “willful” acts.

4. Protect Chain of Information.

Knowing what to keep and for how long as well as what not to keep are essential. Knowing who can have access and how to use this information without breaching privacy laws or risking discriminatory complaint are equally essential. 

5. Follow Policy Outcomes.

With the overuse of “cookie cutter” policies, many companies are unaware that better policy options exist.  Regardless of genesis for your policy, track outcomes to ensure it is working for you and not creating adverse impact or unlawful side effects.  Designate specific individuals with reasonable ongoing access, and empower them with job description authority to monitor policy success.

HRS offers extraordinary legal compliance expertise, P3 design services and further information on any topic herein. Consider an HR certification audit as proactive P3 compliance. ROI is exponential.

Private businesses and employers in 12 states to most recently include Wisconsin are faced with the decision to allow concealed weapons carry on company premises. The argument against banning weapons lies largely in the statistics and in the liability. The argument for banning weapons lies largely in perception of safety and in the ability to attract, retain and engage a productive workforce comprised of people unaccustomed to concealed weapons carry and its perceived threats.

Legal counsel and insurance underwriters are largely recommending employer silence on this issue. Silence allows lawful carry without interference. The US Library of Congress reports crime reduction in every state enacting Concealed Carry. Violent crimes are reduced 5-22%. The most popularly referenced FBI report utilizes a 7% reduction statistic.

As a global firm, we have had the opportunity to work with many states across the nation prior to Wisconsin’s recent Concealed Carry enactment. With a second hub in AZ and service to the Scottsdale Chamber’s Public Policy Advisory Council, we are no strangers to public weapons carry and private business rights to “Opt Out.”

Wisconsin employers are inundating us with questions, and we are pleased to provide an extraordinary knowledge base here. At the time of this report, the state of Wisconsin is not protecting employers from liability if choosing “weapon free zones.”  Specifically, if an individual is harmed because he or she was not allowed to carry weapon per lawful right, the company can be held liable. Additionally, it is argued that the posting of “no weapons” signs specifically attracts crime similar to a resident posting a sign “not monitored by security system.”

The argument for banning weapons lies largely in the perception of safety and records of specific incidents. While statistically it is argued that crime is reduced by arming law abiding citizens, the fact remains that with concealed carry acts, individuals who shouldn’t be licensed still manage to get licensed. It is also evident that individuals use poor judgment in what constitutes “self defense,” improperly trained individuals gain access to weapons and accidents happen. What stings in minds are images of Columbine, Virginia Tech, “going postal” and a wealth of related tragedies. For many these images outweigh statistical probabilities and facts. Most are not aware of this report… among 25,000 2009 murders, less than 1% were committed by concealed carry permit holders. 
 
Businesses which allow concealed carry on their property are immune from liability arising from that decision. Employers who choose to allow concealed carry without interference will adapt by removing policies and handbook language which prohibit the carry of weapons on premises.  However, we recommend substituting this language with the requirement that weapons must be lawful and licensed.

Employers who choose to “opt out” will create a “weapon free zone.” Employers may choose to prohibit concealed carry during work activities, and if they do so, then language must be modified and signs must be posted.   The sign must:

• Be at least 5 inches by 7 inches.
• State that concealed or open firearms are prohibited in the building or on the premises.
• Specify the area to which the prohibition applies.
• Be placed in a prominent place near all of the entrances to the part of the building to which the restriction applies or near all probable access points to the grounds or land to which the restriction applies, as applicable, where any individual entering the building, grounds, or land can be reasonably expected to see the sign. 
• Businesses should consider the universal “no” symbol of a circle around a picture of a firearm with a slash across the middle of the circle, indicating that firearms are prohibited.

 
An employer may not prohibit an employee, as a condition of employment, from carrying a concealed weapon in the employee’s own motor vehicle, even if the employee uses his or her vehicle in the course of employment or if the motor vehicle is on company grounds. Some employers are creating a policy that vehicles containing weapons on company premises must remain locked at all times.

HRS is active in helping craft and/or review employee handbook policies on this matter.  For those who wish to “opt out,” the sample “Weapons Ban” policy to follow is one of the alternatives available.  Customization may be expected. 

Weapons Ban Policy Sample

The company complies fully with all applicable federal, state and local laws to include the Concealed Carry Act. Weapons and firearms of any type are strictly prohibited within company premises at all times.  Company premise includes property owned, leased or controlled by the company.  Company premises also include anywhere that company business is conducted, such as customer locations, vendor/associate locations, trade shows, restaurants or any venue visited for the purpose of business. Weapons include, but are not limited to, guns, knives or swords with blades over four inches in length, explosives, and any chemical whose purpose is to cause harm to another person.
 
Regardless of whether an employee possesses a concealed weapons permit or is allowed by law to possess a weapon, weapons are prohibited on any company property or in any location in which the employee represents the company for business purposes, including those listed above.

Possession of a weapon can only be specifically authorized by a company officer to allow security personnel or a trained employee to have a weapon on company property when this possession is determined necessary to secure the safety and security of company employees. Only a company officer may authorize the carrying of or use of a weapon within company premises. Any violation of this policy or federal, state or local laws which relate to weapons shall also result in immediate discipline up to and including termination.

Templates exist for best practices job descriptions.  Some templates hit the mark and others fall short.  Our article outlines the minimum goals to be attained by job description creation as well as some helpful guidelines to writing a custom description.  Rarely can an organization pull a job description "off the shelf" from another organization and apply it without essential modification.  Consider a job description model only a starting point and invest the effort into customizing the instrument to your organization and your unique job.  The exercise of doing so offers value in itself. 

For starters, let us explore the goals.  A strong job description will...

• Serve as an effective tool for employee selection and orientation to specific position duties and evaluation criteria.
• Establish a training checklist for new hires or incumbent job changes.
• Provide a point-by-point quality of work itemization for performance appraisals and ongoing performance management.
• Document position goals and performance standards.
• Protect the firm from legal risks through written documentation of position requirements.  Establish ADA, FLSA and EEOC compliance.
• Benchmark the position for accurate compensation scale review.
• Facilitate a merit-based compensation system by clearly identifying distinguishing characteristics between positions and position levels.
• Communicate recruitment parameters to safeguard the hiring process.
• Effectively distribute workload among team members to ensure organizational “right sizing.”
• Manage legal risks in employment law by comprehensively documenting the position requirements and performance requirements.
• Allow team members to measure their own performances between formal performance appraisals.
• Establish individual accountability.
• Internally market the position to each relevant team member through controlled terminology and quick communication of the “keys to success” in the position.
• Enhance training and thereby minimize relevant turnover.
• Validate the need for pre-employment testing/screening toward legal risk management.
• Protect team members not selected for promotion from failure to understand selection decisions.  Protect the company from challenged decisions.
• Assist supervisors with the performance appraisal system by providing written reminders of the goals and expectations actually communicated to the team members.

Job Analysis should involve both incumbent employees and their supervisors.  Not only should the tasks and position goals be documented, but in crafting and weighting such considerations, the keys to success and risks of failure should also be considered.  The consideration and the documentation of facts are two different things.  The final product will be edited and filtered for content and purpose. As an example, we document what an employee is responsible to do to avert problems, but we do not necessarily document the potential problems themselves.

Typical categories of information include Job Title, Immediate Supervisor, FLSA Status, Mission/Summary, Essential Tasks & Responsibilities, Supervisory Responsibility, Job Requirements, Working Conditions, Physical Demands, Skills & Learning Goals, and Disclaimer of Management Ability to Modify.  Some descriptions may include Department, Pay Grade, Work Hours, Location/Site Travel and more.

When crafting language, measurable benchmarks must be present to ensure the standards are meaningful and reliable.  Legally compliant language is essential to ensure compliance and perception of compliance at every stage of employment.  Desirable behaviors should be documented in detailed description.  While some label behaviors as"soft skills," successful leadership recognizes that behaviors drive results often more than skills do.  Behaviors need to be measured both on the job and at pre-employment assessment.  The HRS Assessment Center supports just that! Owning a characteristic is not as important at appropriately deploying that characteristic when it counts.  In order to pay a bill, one needs not only to have the money but also to write the check.

Job analysis questionnaires, sample job descriptions, outsource assistance and more information are available from HRS.  We wish you great success with your project!

Fueled by ADA, FMLA and countless ever-changing statutory concerns, employer confusion has sparked over-generosity.  Employers are giving against their will and caving in beyond necessity.  While competitive offerings remain critical to attracting, engaging and retaining the right talent, benefits that reach the greatest number of top performers are most valuable.  Disability benefits may or may not be integral to that mix, specific to the overall company offerings and keys to success. Disability leave, disability law and disability insurance are each distinctively different topics.  Accordingly, we have taken time to debunk the myths and blueprint the actual requirements.

ADA Leave: Recent legal precedents validate that employers need not provide “indefinite leave” nor any disability leave that produces “undue hardship.” According to circumstance, four weeks beyond FMLA entitlements has been a typical benchmark for ADA leave.

Employee Paid Disability Premiums: Where the company does not pay premiums or administer benefits, such disability insurance plans may be exempt from company benefit rules.  While it is unlawful to penalize employees for the allowable use of company benefits, benefits not provided by the company may be carved out.  Written distinction is mandated through a well-crafted policy.

Advance Notice:  Wage, hour and employment laws are quite clear that while an employer may be granted certain latitude in practice, advance notice to employees is critical to legal compliance.  Burden rests upon the employer to provide clear advanced notification of policies.  Again, a well-crafted proactive policy satisfies this requirement.

Benefits During Leave:  The company needs not pay benefits during leave not legally mandated.  In fact, the same is true during certain legally mandated leave.  Employers may craft policies that stipulate leave to be employment separation.  Such leave can then have its own consistently applied definition, eligibility for rehire and seniority recaptured, if so desired, upon rehire. Employees are eligible for COBRA as of the employment separation date, which becomes the qualifying event.

As with most employee handbook policies, one size does not fit all here and legal compliance can be complex.  HRS is available to weigh situations on their own merit and customize policies to unique company practices.

As global talent assessment experts, HRS has spent many years researching success of video technology use in screening.  We’ve reviewed dozens of platforms and learned from thousands of employers.  Recently, with the continued emergence of videoconferencing use in business, video skills gain importance.  However, screening platforms are still showing flaws.

The first major flaw lies in the difference between skills just being on camera as opposed to actually “addressing” the camera.  These two skills have little or no correlation between them.  Addressing a known audience can be far more comfortable than addressing an unknown (camera) and vice versa.  Even the company’s sales reps appear “frozen” and ill at ease in certain platform demos.   Videoconferencing typically allows the visibility of and interaction with an audience, a different dynamic altogether. As a regular speaker, I find it infinitely easier to “come alive” with dynamics when I have an engaged and participative audience.  A flat, unresponsive audience is a challenge, and often a burden, to an educator.  Entertainers sometimes enjoy that challenge, yet entertainers and educators are two different characters.  Consider the actual video skills requirements of the job, and align the screening dynamic with the job’s parameters.

The second major flaw lies in the platform’s validation.  Some platforms align with the proven concept that the best interviewers often are those who have the most practice. Sales and substance are two different concepts, and for many, these are sadly mutually exclusive.  We researched several platforms which have specifically positioned themselves to major market employers whose keys to success lie in turnover versus employee retention. Not all organizations are talent based. In fact, many large organizations rely upon “plug and play” capabilities which create sustainability without reliance upon specific talent.  The important takeaway here is to find a platform which aligns with your corporate goals for talent lifecycle. You may adopt more than one platform if you do not find an integrated solution.
 
The third major flaw is legal compliance.  While the federal and state governments are mandating appropriate timing to potentially discriminatory data collection, inappropriately deployed video screening can heighten risks of noncompliance.  Structure a program consistent, compliant and true to the job description for best protection. These are the same risks discussed in our teachings on social media use in screening.

The fourth major flaw lies in BFOQ test of reason.  Unless a bona fide occupational qualification (BFOQ) is prominent, the screening technique is at risk.  If video skills are not necessary to the job description, do not consider video skills in the screening.  How people present in person, in writing, via telephone and via camera are all unique characteristics independent of one another.

HRS has pioneered telework principles and use of global technology for decades.  We understand the benefits and the risks. Many technology options are available, appropriate to individual job requirements.  Video may or may not be the solution, and please adopt the platform which truly represents your best interests.  We use video technology often… but selectively according to the actual job requirements and career path lifecycle.  Detailed research is available from HRS.

This year’s most popular goals of employers large and small are to manage new legal risks, reorganize staff for best efficiency/future growth, and manage human capital for improved cost savings.   The following checklist provides framework to suggested 2011 initiatives.
 
 

1. Identify and control emerging legal risks.

More than 20 areas of statutory and case law have changed in the last year alone.  Government audits can newly be random rather than triggered solely by complaint as before.  Fines are a vehicle for government fundraising.  Employers must not only get compliant as cost control but must also gain reasonable care certification from 3rd party expert analyst. New ISO practices are emerging for HR.  Discreet compliance reviews are available to provide essential investigation plus affirmative defense certification. Avoid using non-profits in this role as they are not lawfully eligible to advocate on your individual behalf and can only advocate for their memberships on the whole.
 

2. Reassess HR needs.

With the wealth of HR/OD resources available, the best way to safeguard your HR initiative is to ensure no idle time and to ensure you have secured the appropriate change management resources.  This is not a time for old school thinking and rote maintenance behavior.  This is time for invention and transformation. Have full time resources for full time needs maintenance.  Draw upon external experts to suggest and design change.
 

3. Enjoy the ROI, cost savings and future planning benefits of employee assessments.

Deploy testing that predicts employee performance and learning needs throughout the life cycle: pre-employment, advancement, change, trainability and exit, at a minimum. Personality profiles do not get that done.  In baskets, role plays and job simulations provide meaningful data.  Expect at least a 100:1 return on your investment.  Reject instruments that fall short.
 

4. Create and enforce a lifelong learning culture for leaders.

Leaders who burn out or who miss opportunities to transform others are toxic to your environment.  Leaders should be seen learning.  Trainers should be seen learning to train.  Leading and training are not “common sense.” Commitment to external education sources is critical, but speaker seminars are the least effect learning venue.  Consider learning workshops in your environment at which real-time case studies can be explored and resolved to better apply learning and safeguard time away from work.
 

5. Stay in touch with employees to monitor engagement, troubleshoot, facilitate and be proactive.

Proactive solutions are typically 5-10% the cost of reactive solutions.  Accept that what is past may or may not be prologue.
 

External resources can provide outstanding facilitation to these action items, and please think of HRS during your proposal process.  3rd party objectivity, specialist research, multi-employer relevant case studies and flex talent bring value added your internal time simply is not licensed to bring, no matter how competent and no matter how dedicated.  The collaboration between internal and external talent is a powerful force.

Some attorneys will advise employers to avoid using social media as a recruitment and screening tool.  The caution is wise; however, avoidance may be impractical, and the proper use of social media can most definitely pay off.  In many cases, we consider it actually necessary. While risks of unlawful use exist and need be avoided, bona fide occupational qualifications can be investigated through proper methodology.  The following 3 rules are set forth to simplify legal compliance.

1) Timing is everything.  The EEOC is often more concerned about the timing and outcomes of collecting data than the collection of data itself.  That is, we know certain visual characteristics when we interview or videoconference a candidate, yet premature collection and use of this data is considered unlawful “profiling.” The investigation of social media after interview is typically safer than prior to interview.  A company that shows reasonable care and great diversity in demographics and advancement provides substantially stronger affirmative defense than a company with insufficient diversity and/or without reasonable care compliance. Protected characteristics are found not only in the Civil Rights Act of 1964 but also in the legal changes and state regulations emerging ongoing.
 
2) Bona Fide Occupational Qualifications (BFOQs) are still considered a lawful job requirement subject to reasonable investigation. How a candidate presents his/herself to the general public and company stakeholders is a legitimate public relations and credibility concern.   While off duty behavior may or may not be appropriate to monitor and discover as a BFOQ, how a candidate chooses to be known on the Internet as searchable by customers, co-workers, competitors, associates, vendors, investors and other stakeholders, is certainly a BFOQ.  Such a presence affects on duty performance, especially when easily detected by search engine or links to professional or company presence.  A great job description and strong company policies will validate social media investigations.
 
3) Outsource investigation and/or control consistency and chain of information.  HRS policy establishment, training and candidate investigation services are currently booming.  While we are biased that no competitor meets our standards, please know resources abound for outsourcing implementation or procedural design as risk management. If choosing to insource the effort, control documentation and custody of information. Appropriate policies and disclosures should be considered.  One size does not fit all here.  Social media usage and monitoring policies should match the company’s unique practices.  And, although the candidate may choose the “world wide web” to air private and personal information, the employer must remember to not further the information distribution except on a “need to know” basis. Use of search engines to collect data is recommended.  The method of collecting data should align with reasonable access to information by company stakeholders.

The appropriate use of social media in hiring provides cost-effective recruitment, often with cost savings or targeted candidate access impractical to ignore.  However, the very nature of recruitment via social media could grant us access to candidate social media profiles too soon. To use only social media for recruitment, in certain cases, may in itself be considered discriminatory.  Audience demographics should be considered to both control costs and to also ensure abidance with Affirmative Action Plans where they exist.

It is difficult to investigate certain social media sites, especially those of a personal rather than professional focus, without receiving information regarding age, race, nationality, military, family status, sexual orientation, religion, or some combination of the many, many lawfully protected characteristics.  Pictures, comments, links, interests and profile page data cannot be reasonably avoided. To better manage risks, we suggest directing the candidate to the company’s own application system rather than linking the recruitment response with the candidate’s social media profile.  Such a step allows the company to broadcast the recruitment via social media but to collect responses through traditional methods discouraging profiling. 

Upon reaching the correct stage and method of data collection, be certain to avoid risk of error and falsehood. Identities can be confused, and inaccurate information may be collected.  Be certain you have the correct individual, and be certain the information is true. Background check permission forms should collect necessary data to validate identity. HRS recommends and designs a sequential plan of using social media investigations lawfully, consistently, with proper timing and privacy controls toward the appropriate evaluation of BFOQs.  As an added safeguard, it is popularly recommended to involve an outside firm or an individual not participating in the employment decisions. That individual or firm should then be in position to report only on job requirements and BFOQs, thereby inherently controlling the distribution and use of data.

1.Stay Informed via Reputable Experts

There is no acceptable plea of ignorance.  Laws are constantly changing and it is the employer’s responsibility to stay on top of it.  Government sites are improving, but state and federal governments often do not accept responsibility for creating clear communications via websites.  The courts look to reasonable care and actual workplace outcomes; however, complaints can be costly. Secure a source of compliance updates reasonably considered compliance “experts.”

2. Choose the Right Expert Source

Subrogate liability: find an expert willing to “take the fall” and back you. Compliance experts need not be legal counsel as long as they remain committed to advanced legal studies and ongoing compliance research.  HRS has proven it possible to attain 100% success in avoiding legal argument when compliance is deployed at the proactive stage. Reasonable care and due diligence are key. If you determine to use legal counsel as your “experts” and they have pulled you into the fire only to bill you going in and coming out, find new legal counsel or find an alternative remedy.  Insurance brokerages, payroll partners, TPAs and other HR related vendors offer valuable templates and perks for their customers.  Most, however, do not profess themselves as “experts” and non-compliant information potentially coming from them is on your plate, not theirs.  Several of these firms are proven to circulate bad information because it’s just not their problem. If you grab a tax advice flyer at the grocery store, you shall be challenged in holding the store accountable for bad information.  Several HR industry vendors hire HRS and other accredited experts to provide deeper quality risk management for clients. 

3. Reject Cookie Cutter Advice

Compliance is more about judgment than templates.  Non-profits can be a great source of templates and education; however, by the nature of being non-profits, they are ineligible to advocate for any individual client and can only serve the “membership as a whole.” Although we’ve caught one or two professing themselves in the “management consulting” field, please know this is categorically impossible. Take their information as one component of your research and adapt it to your company’s unique variables.  Call upon experts who can bring widespread case studies where you prefer assistance. There are some valuable non-profits, they can be highly beneficial; however, they cannot be a “one stop shop” for your compliance needs.  

4. Document Policies and Incidents

Do not let deniability work against you.   The courts look for evidence and reasonable care in forms of currently compliant employee handbooks, related documentation and proof of receipt.  For top risk management, an employer needs to prove the employee knew what was expected, received no confusing/contradictory messages, was capable of meeting expectations, knew the consequences of failure and chose to fail.  Consistency of enforcement without discrimination is critical.  Incident reports, valid job descriptions and clear compliant performance appraisals are each contributory toolsets.   Legal postings must be up to date and accessible to employees.  (Flat annual fee poster services can be a great partner here.) Maintenance and access to employee files must be controlled on a “need to know” basis according to HIPAA, EEOC, DOL, GINA and countless other emerging and ever-changing standards.  Consider a voluntary compliance review for risk management and to build “affirmative defense” through reasonable care.  Non-profits are ineligible by status to protect individual members/customers, so please do not deploy a non-profit organization in this capacity.

5. Train, Train, Train

Enforce a culture of lifelong learning and properly train employees not only in operations procedures but also in legal compliance to include anti-harassment, risk management, liability aversion, documentation and diversity.  While the employer is not ultimately expected to control each and every workplace action, the employer is held accountable to “reasonable care.”  Proper training averts risks, and the act of training builds “affirmative defense.”  Training by 3rd party experts brings additional reasonable care and promotes exceptional questions and learning. Remember most people are not classroom learners and bear learning threshold of 2.5 hours typicalmaximum.  Consider kinesthetic learning bullets. (Hint and shameless plug: contact HRS!)

6. Stay Current and Prepare for Change

The employer who has been non-compliant and has “never had a problem” is probably due.  Granted those employers are probably not taking the time to read this, invulnerability is a myth. Everyone is vulnerable.  Don’t waive it off. The government is fundraising.  Many people would rather fundraise than work.  Some lawyers are fundraising.  Insurance companies, like any businesses, will protect their interests.  It is your responsibility to protect your own interests as an employer.  Stay up to date with regular compliance reviews for practices and policies. The right 3rd party expert partnership is excellent “reasonable care.” Secure updates and review for compliance regularly. 

Please contact HRS for more information regarding answer desk, compliance review, handbook services, kinesthetic learning bullets to include anti-harassment, referrals to HR partners who rely upon actual experts and other risk management reasonable care programs.

If you want to understand why anything happens in health care simply follow the dollars.

After having spent 35 years in the health care cost management field I am convinced that this is a true statement. The dollars influence and in some cases dictate hospital expansion, physician carrier choices, additional technology, administrative systems, insurance company plan designs, employer benefits and any other aspect of the health care field. This being the case, influencing the dollars will drive solutions to the industries problems.

As evidence of this, look at the expansion of PPO type plans over the past 20 years. Offering employees a benefit incentive to use one doctor or hospital over another has resulted in the largest change in buying habits ever recorded, with over 90% of today’s health care being provided through PPO type plans. Even HMO’s have re-packaged their services into PPO type plans.
There are three changes that can be made to the existing system that will reduce costs, significantly limit cost increases, improve quality, improve access, streamline administration and expand insurance coverage. All three changes are made in the private sector and require no government intervention or additional taxes.  

1. Price Transparency:

Today we do not know the true cost of even the most routine procedure (normal deliveries). As a result of multiple PPO, HMO and government contracts the price has been distorted. In Milwaukee 38 procedures represent 65% of the dollars spent at the hospital. The price range of each procedure among Milwaukee hospitals is at least 100%, with 300% and 400% variances common. Each hospital should be required to disclose the average private sector revenue for the top 20 procedures. Because this is an average confidential contract pricing is not disclosed.  

2. Change the PPO and HMO contracts:

In the mid 1990’s most hospitals were reimbursed a set dollar amount per day of hospital stay. As a result the cost increases for benefit plans in 1995 and 1996 was virtually “0” according to the Mercer study on health care costs. In the latter 1990’s competitive pressures and improved hospital negotiating skills resulted in a move to a percentage off billed charges. The control of the cost of health care was turned over to the providers. From the late 1990’s to about 2006 cost increases were in the low to mid teens each year. A return to fixed pricing is essential to controlling costs. Both hospitals and physicians should be reimbursed according to a fee schedule.

3. Change Benefit Plan Designs:

Price transparency and a change to schedules under contracts allow the designers of benefit plans to create plans that embrace the schedules. The cost of this service ranges from $1000 to $4,000. The benefit plan will pay $2,500. These are the providers who will accept this price or less.

4. Create Global Services:

Fixed pricing allows the formation of Global Services. Under these services all of the parts of a procedure are contained in a single contracted price. For example a Global surgery would include the surgeon’s fee, assistant surgeon (if necessary), anesthesia, radiologist, facility, drugs, tests and any other items required to provide that service. This is the way that health care is provided when benefits are not involved. Most cosmetic surgeries are presented to the patient set fees are patient (who is going to pay the bill) as a single fee with all the necessary parts included.
 
These four changes would result in an immediate cost reduction (fixed prices are used and providers have an incentive to control costs since it will increase their profits), improve quality (the main differentiation factor is now quality of care and patient satisfaction), improve access (if providers know they will be reimbursed they are more likely to offer services in areas they might otherwise ignore), streamline administration (more efficient administration increases profits) and expand insurance coverage (better priced insurance products can be afforded by more companies and individuals).
 
These changes can be implemented by the end of this year with no government intervention or expense. If consumers demand better benefit plans they will be delivered.
 
On the flip side the current proposal of a government sponsored “public plan” will increase Medicare taxes by 20% to 30% within two years.
 
The “public plan” is based on fees that Medicare has negotiated with hospitals, physicians and other health care providers. These rates are often 60% below billed charges and according to a recent study 20% to 30% below provider costs. The only reason that the provider community has been able to tolerate these low reimbursements is because they can increase their costs to the private sector. A study by the Lewin organization estimates that if the “public option” were offered 85% of the private sector would move to this option within two years because of the lower cost to companies and individuals. This would effectively kill private sector helath benefit plans.
 
If there is no private sector there is no one to whom costs can be shifted. Medicare would have to increase reimbursement to at least cost or hospitals and doctors would go out of business. This would require a 20% to 30% increase in Medicare reimbursements and a similar increase in Medicare taxes. It would also result in limitations on services available and probably result in hospitals and doctors opting out of the “public” plan with their services being available to only those who could afford to bay the bill.
  
We have the ability to control health care costs in a fashion that benefits patients, providers and payers. The question is do we have the resolve to implement the changes.

 

This article was contributed by Richard L. Blomquist, Esteemed Member of the HRS Advisory Board
Mr. Blomquist's Bio and Contact Info 

Sending wholehearted gratitude to those and their families who paid the ultimate price defending their country against socialism, the false propaganda in this country threatening blind allegiance and subserviance to socialist principles needs also to be defended against.  Some proponents of the universal health care movement are now using socialism labels… and this is an unnecessary extreme to create the much needed change.  Nations choose their political systems carefully and defend them tenaciously.  The US has fought tenaciously as well and shouldn’t easily abandon longstanding beliefs.

Those who think they understand socialism need to visit a socialist nation and spend time truly analyzing its affects.  Socialist principles can be altruistic and often attractive in theory.  Like many political systems, the rollout of socialism yields outcomes completely contradictory to its perceived intention.   In the US we are entitled choice, and in that, let’s please remember that for which our founding fathers and millions of US military have shed blood.  Hitler and Mussolini also are also connected with socialism.  Think carefully.

In the US please consider rejecting all programs cloaked with the word “socialism” and “socialized” unless you really believe pure socialism is the answer... and you believe the US needs to reject its longstanding principles and overturn that for which many have given their lives.   There are many things to attempt here in the US short of socialism before overturning our guiding principles in such an extreme.  Many believe through research that true socialism simply eliminates the middle class… making the rich richer and the poor poorer.   

Whether you are for or against more government intervention in our BIG health care problem, socialism is not the next step in progression… and please don’t let much needed hope for betterment allow such a tricky movement to sneak past the great people of this country.